Page 1

News Release The Hanover Insurance Group® The Hanover Reports Second Quarter Net Income and Operating Income of $ 3.52 and $ 2.85 per Diluted Share , Respectively ; Combined Ratio of 94.4 % ; Combined Ratio , Excluding Catastrophes , of 87.9 % WORCESTER , Mass . , July 27 , 2021 - The Hanover Insurance Group , Inc. ( NYSE : THG ) today reported net income of $ 128.5 million , or $ 3.52 per diluted share , in the second quarter of 2021 , compared to $ 115.2 million , or $ 3.01 per diluted share , in the prior - year quarter . Operating income ( 1 ) was $ 104.0 million , or $ 2.85 per diluted share , for the second quarter of 2021. This compared to operating income of $ 62.7 million , or $ 1.63 per diluted share , in the prior- year quarter . The difference between net and operating income in the second quarter of 2021 was primarily due to an after - tax increase in the fair value of equity securities of $ 20.9 million , or $ 0.57 per diluted share , which is excluded from operating income . Second Quarter Highlights • • • Net premiums written increase of 11.7 % * ; net premiums written ( 2 ) increased 8.6 % * , excluding the impact of premium returns in 2020 , reflecting strong growth in all segments Combined ratio of 94.4 % ; combined ratio , excluding catastrophes ( 3 ) of 87.9 % Catastrophe losses of $ 76.8 million , or 6.5 % of net premiums earned , 40 basis points above expectations , primarily due to several wind , rain and hail events in the Midwest in June Rate increases ( 4 ) of 6.5 % in core commercial lines ( 5 ) and 2.8 % in Personal Lines Current accident year loss and loss adjustment expense ( " LAE ” ) ratio , excluding catastrophes ( 6 ) , of 57.8 % , with some continuing benefit from lower loss frequency in auto Net investment income of $ 75.6 million , up 31.0 % from the prior - year quarter , primarily from higher partnership income Book value per share of $ 88.23 , up 4.8 % from March 31 , 2021 , primarily driven by net income and an increase in net unrealized gains on fixed maturity investments , net of tax , partially offset by share repurchases and ordinary dividends . ( 1 ) See information about this and other non - GAAP measures and definitions used throughout this press release on the final pages of this document . The Hanover Insurance Group , Inc. may also be referred to as " The Hanover " or " the company " interchangeably throughout this press release . * Unless otherwise stated , net premiums written growth and other growth comparisons are to the same period of the prior year