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- **Record Q3 Performance**: 21% ROE, 91.1% combined ratio, and 27.5% NII growth highlight operational excellence.
- **Segment Growth**: Personal (3.6%), Core Commercial (3.5%), and Specialty (8.3%) all exceed loss trends with disciplined pricing.
- **AI-Driven Efficiency**: 2-minute quote turnaround and 83.2% Specialty retention fuel competitive advantage.
- **Investment Strength**: $117M NII, 95% investment-grade portfolio, and $210M repurchase capacity support long-term growth.

**【CEO Summary Section】**
- Delivered exceptional Q3 performance with 21% operating return on equity (ROE), driven by strong net investment income and ex-catastrophe (ex-CAT) results.
- Personal Lines achieved 3.6% premium growth, Core Commercial 3.5%, and Specialty 8.3% renewal pricing, all above loss trends.
- Emphasized disciplined underwriting, AI-driven efficiency (e.g., 2-minute workers' comp quotes), and strategic investments in specialty lines for long-term growth.

**【CFO Financial Commentary】**
- Operating earnings per share (EPS) of $5.09, combined ratio of 91.1%, and 27.5% year-over-year (YoY) net investment income (NII) growth to $117 million.
- Catastrophe losses 3.8 points below expectations, expense ratio 31.3% (slightly above target due to variable compensation), and $55 million in share repurchases.
- Investment portfolio duration of 4.4 years, 95% investment-grade fixed maturity holdings, and $210 million remaining repurchase capacity.

**【Q&A Key Highlights】**
- **Large Account Property Pricing**: Management expects stabilization in upper middle market, focusing on small to mid-sized accounts with superior underwriting.
- **Core Commercial Margins**: 2.4-point loss ratio increase due to one-off workers' comp claims, but 9.9% price increases provide confidence in 2026 margin expansion.
- **Expense Ratio Goals**: Long-term 20 basis points (bps) annual improvement target remains, with short-term offsets from lower catastrophe losses.
- **Technology Impact**: AI tools reduce agent processing time, driving 83.2% Specialty retention and 323,000 shares repurchased in Q3.

The Hanover Insurance Group, Inc. (THG) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

THG

THG fundamentals

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