Property and casualty insurer Hanover Insurance Group, Inc. reported a record net profit of $198.5 million in the fourth quarter of 2025, an increase of 18.2% from $167.9 million in the same period a year earlier.
Operating income for the quarter was $210.1 million, an increase of 8% from $194.6 million in the fourth quarter of 2024.
The company generated net premiums of $1.49 billion, an increase of 3% from $1.45 billion. Net premium income totaled US$1.56 billion, an increase of 3% from US$1.51 billion.
Hannover reported that core commercial insurance renewal prices increased by 9.4%, personal insurance increased by 9.2%, and professional insurance increased by 6.4%, with core commercial insurance increasing by 7.7%, personal insurance increasing by 6.3%, and professional insurance increasing by 4.2%.
As the expense ratio dropped from 32.3% to 31.8%, the combined ratio increased from 89.2% to 89%.
Current accident annual losses and loss-adjusted expense (LAE) ratios also declined slightly in 4Q25, at 56.8% compared to 56.9% last year. Catastrophic losses of $27 million were incurred during the quarter, equivalent to 1.7 percentage points of the combined ratio.
Net investment income increased 24.9% to $125.8 million.
For the full year of 2025, Hanover Hotel’s net profit was US$662.5 million, a significant increase of 55.5% from US$426 million in the previous year.
Operating income reached $696.2 million, an increase of 43.3% from $485.9 million for the full year of 2024.
Net written premiums increased by 3.9%, from US$6.1 billion to US$6.32 billion, and net written premiums increased by 4.2%, from US$5.91 billion to US$6.16 billion.
For the full year, Hannover Hotel’s combined ratio improved from 94.8% to 91.6%, while the LAE ratio was 60.5%, 3.0 percentage points lower than the previous year. The current annual accident loss and LAE ratio (excluding catastrophes) is 57.1%, 1.1 percentage points lower than the previous year, with catastrophe losses of $276.3 million, or 4.5 percentage points of the combined ratio.
Net investment income will increase 22% in 2025 to $454.4 million.
“We delivered excellent results in 2025 with a strong fourth quarter, capping off a record year driven by disciplined execution across the company,” said John C. Roche, Hanover’s president and chief executive officer. “We delivered an annual operating return on equity of 20.1%, the highest in our history, and achieved 23.1% in the fourth quarter while achieving 63 Billion net written premiums, up approximately 4% year-over-year. We are very well positioned across all lines of business, and in personal lines, our market position is driven by our strength as an account writer, which is approximately 89%. of customers with multiple policies, driving strong retention rates. In our core commercial business, we continue to be strong in specialty areas, and while competition is more evident in the larger real estate market, our broad product portfolio and focus on smaller customers across the majority of our portfolios has enabled us to accelerate growth. Overall, our diverse and specialized product portfolio and disciplined approach to managing profitability at the individual account level allows us to identify and capitalize on the most compelling opportunities in an ever-changing and dynamic market environment.”
“We are very pleased with our results for the quarter and year,” said Jeffrey M. Farber, executive vice president and chief financial officer of Hanover. “In the quarter, we built on the progress we made throughout the year, delivering a sub-90 combined ratio and record operating profit per share of $5.79. For the full year, we delivered a record operating profit of $19.09 per share and improved our underwriting results by more than three points, bringing our combined ratio to 91.6%. We also achieved good prior-year development across all three business segments and maintained strong discipline on our reserving approach. Our net investment income improved in 2019 Increased nearly 25% year over year. Supported by our asset base growth, higher reinvestment yields, improving partner income, and our portfolio repositioning efforts, our quarterly dividend increased 5.6% to $0.95 per share in the fourth quarter, marking our 21st consecutive share repurchase of $130 million during the year, reflecting another strong year as we enter 2026. We will have a strong balance sheet, significant financial flexibility and an investment portfolio designed to enhance future returns.”
