Hanover net income down 42%

The Hanover Insurance Group reported net income of $45.2 million for the first quarter of 2017.

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The Hanover Insurance Group, Inc. reported its first quarter profits fell 42 percent as its catastrophe ratio increased to 7.1 percent of earned premiums.

Net income for the first quarter was $45.2 million, or $1.05 per diluted share, compared to $78.2 million or $1.80 per diluted share in the first quarter of 2016. Total revenues, however, were up nearly three percent to $1.3 billion from 1.2 billion before. Catastrophe losses, or the number of insurance claims from major disasters, accounted for $84.1 million before taxes, up from $31.2 million last year.

That increase mostly came from domestic catastrophe events in the Midwest, according to the earnings report issued late Wednesday. The catastrophe losses were higher than expected, according to a statement from President and CEO Joseph Zubretsky, who joined the company last year. Zubretsky said was pleased with the company’s performance alongside the higher-than-expected catastrophe losses.

On a more positive note, net premiums written increased to $1.19 billion, up from $1.14 billion in last year’s first quarter. The increase was driven by growth in domestic business, according to the Hanover. The company’s combined ratio without catastrophes held steady at 92.4 percent.

Commercial lines operating income was down 12 percent to $37.4 million, personal lines operating income fell 79 percent to $9.9 million, and operating income for chaucer was $24.9 million, compared to $33.7 million the year before.