Revenue, operating income up for The Hanover

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By Rick Saia

The Hanover Insurance Group reported a 5.4-percent jump in first-quarter revenue and a 15-percent increase in operating income in spite of tougher winter weather that can lead to higher insurance claims from property damage.

The Worcester-based property and casualty insurer on Tuesday reported revenue of $1.24 billion for the quarter, which ended March 31. That’s up from $1.18 billion in the same quarter last year. Meanwhile, the company reported net income of $54.6 million ($1.05 per share), down from $66.2 million.

The net income beat the expectations of analysts polled by Yahoo Finance by nine cents per share.

The Hanover reported an 8.9-percent increase in the value of net premiums written, to $1.2 billion, driven by growth in its Chaucer and commercial lines units.

President and CEO Frederick H. Eppinger said the company is “on track to deliver improved underlying profitability” for 2014. “Despite the impact of extreme winter weather conditions early in the quarter, including prolonged sub-freezing temperatures and heavy snowfall in some areas, our underlying margins grew in line with expectations.”

The company also credited “strong” price increases during the quarter in its commercial and personal lines (8 percent and 7 percent, respectively), as well as net investment income of $67 million, which was down only slightly from the first quarter of last year.

On the cost side, The Hanover paid out $40.2 million in catastrophic losses, more than five times the $7.4 million from the same quarter in 2013. The company said this year’s loses stemmed from prolonged low temperatures and heavy snowfalls over a wide geographic area in January and February, resulting in collapsed roofs, freezes and other severe losses related to wintry conditions.