The Hanover Insurance Group reported strong third-quarter 2026 operating results, with operating income of $183.1 million, or $5.15 per diluted share. Net income was $172.6 million, or $4.86 per share. The insurer also reported continued premium growth, higher investment income and lower catastrophe-excluded claims costs, while catastrophe losses weighed on its overall combined ratio.
Management said it remains focused on profitable growth, disciplined underwriting and investment in technology and artificial intelligence. The company also continued returning capital to shareholders through stock repurchases.
Key details
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Earnings: Net income was $172.6 million, compared with $178.7 million in the third quarter of 2025. Diluted earnings per share were $4.86, down from $4.90. Operating income was $183.1 million, versus $185.6 million a year earlier, while operating earnings per share rose to $5.15 from $5.09. Hanover described the per-share operating result as a third-quarter record.
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Underwriting performance: The combined ratio was 92.3%. A ratio below 100% indicates underwriting profit before investment income. Excluding catastrophe losses, the ratio was 85.5%. Catastrophe losses totaled $109.7 million, adding 6.8 percentage points to the combined ratio.
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Claims trends: The loss and loss-adjustment expense ratio was 61.4%, 1.6 percentage points higher than a year earlier, largely because of higher catastrophe losses. By contrast, the current accident-year loss ratio excluding catastrophes was 55.7%, an improvement of 1.9 points from the prior-year quarter. Hanover also cited favorable reserve development but did not provide an amount in the material supplied.
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Premium growth and pricing: Net premiums written increased 3.1% from the year-earlier quarter. Reported renewal price increases were 8.7% in Personal Lines, 7.4% in Core Commercial and 4.3% in Specialty. The company separately reported rate increases of 4.9%, 6.1% and 1.9%, respectively, in those businesses.
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Investment income: Net investment income rose 12.7% year over year to $131.9 million. The chief financial officer attributed the increase to higher earned yields, strong cash flows and increased partnership income.
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Returns and book value: Third-quarter net return on equity was 19.4% and operating return on equity was 18.7%. For the first nine months of 2026, those measures were 20.6% and 19.6%, respectively. Book value per share was $99.69, down 5.4% from June 30. Excluding after-tax unrealized depreciation on fixed-maturity investments, book value per share increased 2.7%.
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Capital returns: Hanover repurchased about $86 million of its stock during the quarter and $263 million year to date through October 26.
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Business priorities: Management pointed to its Specialty business, Personal Lines franchise and relationships with leading agents in Core Commercial as sources of growth. It said it remains selective where market conditions warrant and continues to invest in technology, AI and other capabilities.
Plain-English implications
Catastrophe losses lifted the reported claims ratio, but the substantially lower catastrophe-excluded combined ratio and improved current-year ex-catastrophe loss ratio indicate stronger underlying underwriting results for the quarter. The earnings figures also show a distinction between reported and operating performance: net income per share edged down year over year, while operating earnings per share increased. Book value declined from the end of June, although the measure excluding unrealized investment losses rose.