Hanover income down 87 percent
Grant Welker
The Hanover Insurance Group's Worcester campus. Due to third-quarter hurricanes, the company is reporting income declines of 87 percent.
Hanover Insurance Group saw income plummet in the third quarter due at least in part to hurricanes Harvey, Irma and Maria.
The earnings report for the Worcester-based insurer, released Thursday, showed a net income decrease of 87 percent, from $88.4 million in last year’s third quarter to $11.1 million this year, or a diluted share decline from $2.06 to $0.26.
Operating income fell even further at 94 percent, from $78.6 million to $4.7 million, or a diluted share decline from $1.83 to $0.11.
The company reported current-year catastrophe losses of $202.4 million before taxes -- or 16.5 percent of earned premiums -- due to hurricanes Harvey, Irma, Maria and earthquakes in Mexico.
Domestic catastrophe losses alone were $77.5 million, and losses from the company’s international specialty group Chaucer were $117.4 million.
Despite significant catastrophe losses, the company’s overall performance was strong and it still turned a profit, said President & CEO Joseph Zubretsky.
“Overall, we’re pleased with the results,” he said in conference call Thursday morning.
Chief Financial Officer Jeffrey Farber said the quarter will go down as one of the most devastating catastrophic event quarters.
“We’re pleased with the underlying performance of the business and we feel very good about our prospects moving forward,” he said.
The earnings report was the last for Zubretsky, who is leaving the company at the end of the week for an executive position at a California healthcare firm.
On Thursday, Zubretsky called the opportunity “personally compelling” while expressing his confidence in Hanover’s future.
Jack Roche, the president of the company’s personal and commercial lines Agency Market division, will take over as the president and CEO.
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