Hanover's Premiums, Profits Grow
The Hanover Insurance Group saw its net income grow in the first quarter of 2013, from $49.7 million, or $1.09 per share, to $66.2 million, or $1.46 per share, the Worcester-based property and casualty insurer announced.
Frederick H. Eppinger, The Hanover's CEO, called the results strong, providing "positive momentum" on all of the company's strategic priorities for 2013.
Net premiums for the period were up 6 percent, to $1.1 billion, mostly driven by premiums retained at Chaucer Holdings, a specialist insurer that The Hanover acquired in 2011.
The company repurchased 904,000 common shares for $42.7 million through April 26. As of that date, it had about $72 million remaining under its $500-million stock repurchase program.
The company also issued $175 million in subordinated debt, which CEO David B. Greenfield said was part of the company's effort to optimize the efficiency of its capital.
"Over the last several months, we have opportunistically retired certain debt related to prior acquisitions and projects," Greenfield said. "With this current issuance, we have taken advantage of favorable market conditions to further strengthen and improve our financial flexibility, while improving shareholder returns through share repurchases."
The Hanover's commercial lines segment had a pre-tax operating income of $33 million, compared to $33.9 million last year with net written premiums worth $483 million, up from $468.9 million. Catastrophe losses were $7.4 million, compared with $11.1 million in 2012.
Meanwhile, the company's personal lines operating income before taxes rose to $30.5 million from $27.5 million last year. Net written premiums were down to $341.6 million from $347.4 million. Catastrophe losses were roughly half what they were during the same period last year, coming in at $11.7 million, compared with $23 million in 2012.
"We achieved pricing increases of 9 percent in both core commercial and personal lines during the quarter, and we are seeing even greater increases in our specialty businesses," Eppinger said. "We also continued to execute on targeted and deliberate profit improvement and exposure management actions. Chaucer made another strong contribution to our earnings, benefitting from lower-than-expected losses, and once again demonstrating its strong underwriting expertise."
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