The Hanover Insurance Group Posts Strong Q3 2025 Earnings with 75% Net Income Growth

The Hanover Insurance Group, a property and casualty insurance provider, reported a 75% year-on-year increase in net income, reaching $178.7 million in the third quarter of 2025.

This improvement is attributed to a strengthened combined ratio of 91.1%, supported by a lower loss and loss adjustment expense (LAE) ratio of 59.8%, reflecting reduced catastrophe-related losses during the quarter. Net premiums written (NPW) grew 5% year-over-year to $1.8 billion in Q3 and 4% to $4.8 billion for the nine months ended September 2025, indicating steady top-line growth across business segments.

Breaking down NPW performance, the Core Commercial segment grew by 3.5%, Specialty by 8.3%, and Personal Lines by 3.6% in Q3. Renewal price increases were notable, with Core Commercial up 9.9%, Personal Lines up 10.5%, and Specialty up 8.3%, reflecting the company’s focus on rate adequacy amidst market conditions. Rate increases for the quarter were recorded at 8.7% for Core Commercial, 6.8% for Personal Lines, and 5.8% for Specialty.

The company’s combined ratio improvement was driven by a decreased catastrophe ratio, falling to 3% from 7.2% in Q3 and 5.4% for the nine-month period compared to 8% in the prior year, although the expense ratio rose slightly to 31.3%. Catastrophe losses totaled $46.2 million in the quarter, divided among Core Commercial ($17.8 million), Specialty ($6 million), and Personal Lines ($22.4 million). Additionally, The Hanover benefited from favorable prior year reserve developments, adding positive impact to underwriting results across all segments.

Investment income also contributed to earnings growth, increasing 27.5% year-over-year to $117 million in Q3, driven by higher earned yields and increased cash flows. For the nine months, net investment income rose to $328.6 million from $271.9 million a year earlier. Overall, The Hanover’s net income increased 80% year-over-year for the first nine months of 2025, reaching $464 million.

These financial results underscore The Hanover's operational efficiency and effective risk management in the property and casualty insurance sector. The insurer's ability to increase premium rates while managing catastrophe exposures and improving underwriting profitability will be key metrics for industry observers. Continued vigilance on loss trends and expense management amid evolving market conditions will likely influence future profitability trends.