Hanover Reports Projected Second-Quarter Catastrophic Losses

The Hanover Insurance Group Inc. announced catastrophic losses of up to $77 million for domestic business in its second quarter, according to a statement released Wednesday.

The estimated range is between $70 and $77 million, which amounts to between $1 and $1.10 per share after taxes.

Second-quarter losses are due primarily to 11 storm events that occurred within the U.S., with the largest losses incurred from hailstorms on the Midwest in April, as well as widespread hail and windstorm events in the Midwest and Mid-Atlantic regions in May in June, the statement said.

Second quarter results will also likely be impacted by reserve additions in domestic lines, including surety and auto, which are driven by weak economic conditions and an increase in accident losses from 2011, the statement said.

Given these factors, Hanover expects second-quarter segment income to be in the range of 15 cents and 25 cents after tax per share.

Hanover CEO Frederick H. Eppinger said domestic losses were balanced by lower catastrophic losses internationally, however.

“Higher than expected catastrophe losses in our domestic operations were somewhat offset this quarter by lower catastrophes in our international business. Perhaps most importantly, we are satisfied with our accident year results, and we continue to see favorable pricing and retention trends,” Eppinger said.

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