As financial markets tanked, Hanover lost $40M in 1Q

Photo | Grant Welker The Hanover Insurance Group's Worcester headquarters

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The Hanover Insurance Group in Worcester reported a $40-million loss in the first quarter, compared to $122 million in profit in the first quarter 2019, the company announced its quarterly earnings report released Tuesday.

Hanover attributed the loss to fixed income impairment and the stock market tumbling in March, which caused the company's book value to drop. Market indicators like the Dow Jones Industrial Average and the S&P 500 lost about 20% of their value from the start of January to the end of March.

Not accounting for that loss in value, the company had been trending up in the first quarter, as its operating income increased to $86.8 million from the $80.7 million it made in the first quarter 2019.

President and CEO John Roche said in a statement the company remains very strong and is equipped to manage the impacts of the coronavirus pandemic. In April, the company announced it would refund its personal automobile insurance customers 15% of their premiums, due to the decrease in traffic on roads due to coronavirus.

CORRECTIONS: A previous version of this story incorrectly said the Hanover Insurance Group's operating income for the first quarter was $83.8 million, when it should have said the operating income was $86.8 million. Also, the story incorrectly said the company's losses were driven by a loss in value of its fixed income/securities, when the loss was driven by a drop in its book value.