The Hanover Posts Record Q2 Net Income of $192M; CEO to Retire

The Hanover Insurance Group posted net income of $191.6 million in the second quarter of 2026, up from $157 million a year earlier. The combined ratio improved to 91.2% from 92.5% in the same period of 2025. Operating income rose to $189.2 million from $158.7 million, yielding $5.38 per diluted share for net income and $5.31 for operating income. Both figures are second-quarter records, the company said.

John Roche, who has served as chief executive officer since 2017, plans to retire at the end of 2026. He will hand the role to Richard Lavey, the current president and chief operating officer. The transition was announced earlier this month. "Dick Lavey has been one of the key architects of our strategy and the transformation of our company," Roche said in the earnings release. "We will continue to work closely together through the remainder of the year to ensure a seamless transition."

Net premiums written rose 4.6% to $1.66 billion, with growth accelerating across all three operating segments compared with the first quarter. Core Commercial net premiums written increased 7.2% to $574.8 million. Specialty premiums rose 4.4% to $384.4 million. Personal Lines premiums grew 2.6% to $697.6 million.

Underwriting profitability improved. The loss and loss adjustment expense ratio fell to 60.2%, down 1.7 points from the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, improved by 0.3 points to 55.8%. Catastrophe losses totaled $91.8 million, or 5.7% of the combined ratio, down from 7.0% a year earlier.

Personal Lines catastrophe losses dropped to $55.4 million from $70.2 million in the second quarter of 2025. Specialty catastrophe losses fell to $10 million from $14.6 million. Core Commercial catastrophe losses were $26.4 million, little changed from $26.2 million a year earlier.

Prior-year reserve development, excluding catastrophes, was favorable by $10.1 million in Personal Lines, up from $2.6 million. Specialty recorded favorable development of $10.8 million, down from $12.5 million. Core Commercial saw favorable development of $0.6 million, compared with $3.0 million in the prior-year quarter.

Net investment income rose 13.4% to $119.6 million. The pre-tax earned yield on the investment portfolio reached 4.28%, up from 4.11% a year earlier. The yield on fixed maturities rose to 4.45% from 4.24%. The company held $11.2 billion in cash and invested assets as of June 30, with about 93% in fixed maturities and cash. Roughly 95% of fixed maturities were rated investment grade.

Net realized and unrealized investment gains recognized in earnings were $2.8 million, compared with losses of $2.5 million in the prior-year quarter.

"We posted operating return on equity of approximately 20% and operating earnings of $5.31 per share, both second quarter records, as well as accelerated top-line premium growth," Roche said. "We are effectively navigating evolving market conditions, and achieving healthy pricing, while building growth momentum in the most attractive areas of our portfolio."

Chief Financial Officer Jeffrey Farber said the company was "pleased with our excellent performance, including outstanding underwriting profitability as demonstrated by our combined ratio of 91.2%, and 85.5% excluding catastrophes." He added that continued favorable development reinforced confidence in the reserve position, and that the business continued to build capital, enabling increased share repurchases. "Following a really strong start to the year, we enter the second half of 2026 with confidence, supported by our varied earnings streams, resilient balance sheet and disciplined focus on capital allocation," Farber said.