The Hanover Insurance Group, Inc. Q3 FY2025 earnings call

• Jack Roche highlighted strong Q3 results, performance across segments, strategy focus on innovation and independent agency network. Discussed initiatives in Specialty like new operating model in professional and executive lines and AI-powered tool in E&S. - Jeff Farber talked about combined ratio, expense ratio, prior year reserve development, investment portfolio with strong net investment income, and equity/capital position with book value increase and share repurchases.

Personal Lines: Delivered improved profitability, steady growth in low single digits, new business with ~93% bundled customers. Q3 ex-CAT combined ratio 85.8%, renewal prices up, growth in target states. Core Commercial: Small commercial gaining momentum with near double-digit pricing, workers' compensation TAP Sales rollout successful; middle market growth impacted by large account nonrenewals but underlying retention healthy, differentiated risk solutions. Specialty: Top line momentum accelerated, net written premiums growing, E&S with double-digit growth, new operating model in professional and executive lines, AI-powered tool in E&S for efficiency.

• Expect premium growth to continue accelerating. - Fourth quarter CAT load expected at 5.2%. - Plan to give loss ratio and combined ratio guidance in late January/early February.

• Forward-looking statements include risks such as economic conditions, potential recessions, tariffs, and severe weather/catastrophes that could materially affect results.

Q: Thoughts on large account property and middle market pricing?

A: Jack Roche said they're conservative in upper middle market, differentiate in low to midsized accounts; Dick Lavey said they take each account individually and remain disciplined.

Q: Zooming out on strategic direction?

A: Jack Roche mentioned being optimistic about diversified portfolio, momentum in small commercial and Specialty, and potential of middle market.

Q: Home insurance frequency levels and Core Commercial loss ratio?

A: Jeffrey Farber said frequency benefit in home and auto is substantial but hard to predict, and Core Commercial loss ratio target is still optimistic despite recent factors.

Q: Expense ratio goals?

A: Jeffrey Farber said committed to 20 basis points per annum improvement, with scenarios affecting it but overall committed.

Q: Core and contingent commission rates and technology impact?

A: Jack Roche said they work strategically with agents to avoid tug of war for nickels; Richard Lavey and Bryan Salvatore discussed technology being part of a collection of services sustaining growth.