Hanover Insurance income rises 13%

Sam Bonacci The Hanover Insurance Group is headquartered in Worcester.

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By Sam Bonacci

Income for the Hanover Insurance Group in Worcester jumped more than $10 million in the third quarter of the year, the company announced Thursday.

Operating income for the organization was up to $78.6 million, or $1.83 per diluted share, for the third quarter of 2016, compared to $72.2 million, or $1.61 per diluted share, in the prior-year quarter.

The increase in income followed a 4.3-percent increase in net premiums for the quarter to $1.3 billion that was driven by a growth in domestic business, according to The Hanover.

Operating income before taxes on personal lines was $41.7 million in the quarter, compared to $37.2 million in the third quarter of 2015. Net investment income remained relatively stable at $67.8 million for the third quarter of 2016, compared to $68.3 million for quarter three in 2015.

"We achieved a combined ratio of 94.2 percent in the quarter and a stable stream of net investment income, despite the ongoing low interest rate environment," said Eugene Bullis, interim chief financial officer at The Hanover, in a press relase. "The strength of our capital position provides a solid foundation on which to grow our business."

But everything wasn’t on the up for the company, which saw a $4.9-million decline in operating income for commercial lines to $42.5 million. Catastrophe losses were $17.7 million, compared to $13.8 million in the third quarter of 2015. Third quarter results also reflected a prior-year loss reserve development of $19.3 million, compared to $11.8 million in the third quarter of 2015. The unfavorable development in the third quarter was driven by other commercial lines that were primarily related to terminated AIX specialty insurance, as well as liability coverages in the commercial multi-peril line.