The Hanover Insurance Group, Inc. (THG) Business Profile

What it does

The Hanover Insurance Group is a holding company whose principal business is property and casualty insurance. Its insurance subsidiaries cover businesses and individuals against losses such as property damage, automobile accidents and liability claims. Hanover Insurance and Citizens Insurance Company of America are its principal property and casualty subsidiaries. Jack Roche was its president and chief executive officer as of the third quarter of 2026; Dick Lavey was CEO-elect.

For businesses, Hanover sells policies covering property, general liability, commercial vehicles and employee injuries. Its commercial customers include small and mid-sized businesses, with some products tailored to industries such as technology, human services and education. It also sells specialty insurance for risks including professional liability, goods in transit, construction and higher-hazard liability.

For individuals, Hanover offers automobile and homeowners insurance, along with other coverages such as personal umbrella insurance. Its personal-lines strategy emphasizes accounts that combine auto and homeowners policies, sometimes with additional coverage.

Hanover sells primarily through independent agents and brokers in the United States. These intermediaries help customers select coverage and place policies with insurers. Hanover also uses specialist intermediaries for some specialty business. The company underwrites policies, handles claims and uses reinsurance to transfer a portion of its insurance risk to other insurers.

How it makes money

Hanover receives premiums for taking on insurance risks and earns investment income on its portfolio. Its underwriting results depend on premiums relative to claims and the expenses of selling and administering policies. It sets prices using models that draw on exposure and claims experience, and it considers factors such as local market conditions and regulatory requirements. Existing policyholders can renew their coverage, giving Hanover an opportunity to retain premiums and adjust renewal pricing.

Core Commercial serves small and mid-sized businesses. Its products include commercial multiple peril policies, which can combine business property and liability protection, as well as commercial auto and workers’ compensation. Small commercial and middle-market policies are generally sold as accounts that can include several coverages.

Specialty focuses mainly on small to mid-sized businesses with more specialized needs. Its products include professional and management liability, marine insurance, surety and coverage for risks outside the appetite of standard commercial insurance. Some specialty policies complement a customer’s Core Commercial coverage.

Personal Lines provides automobile, homeowners and other coverage to individuals. Hanover seeks to write both auto and homeowners insurance for an account, where applicable. Its Other segment primarily contains holding-company earnings and expenses and certain run-off insurance businesses.

In 2025, Hanover generated approximately $6.3 billion in net premiums written; in the third quarter of 2026, net written premium growth was 3.1%. Net premiums written reflect the business retained after reinsurance, rather than simply all premiums on policies Hanover issues.

Investment income is another earnings source. Third-quarter 2026 net investment income was $131.9 million. Hanover’s insurance subsidiaries remain responsible for paying policyholder claims even when they have transferred some risk to reinsurers.

Customers and how it sells

Hanover serves individuals, small and mid-sized businesses, and organizations with specialized insurance needs. Personal customers buy protection for homes, vehicles and other possessions or liabilities. Business customers can purchase coverage for premises, operations, vehicles and employees, as well as specialty protection for particular professional or industry risks.

Independent agents account for substantially all Core Commercial and Personal Lines sales and most Specialty sales. Some specialty business is also sold through managing general agents or wholesale distributors with expertise in the relevant industries or products. Hanover selects agencies using criteria that include profitability, financial stability, growth potential and business strategy.

The company is licensed to sell property and casualty insurance in all fifty U.S. states, the District of Columbia and Puerto Rico. It actively markets Core Commercial and Specialty policies in 44 states and the District of Columbia, and Personal Lines policies in 19 states. Its field structure is designed around local markets and agency relationships.

Michigan and Massachusetts are Hanover’s largest historical core states for Personal Lines. The company is working to diversify that geographic mix, while its commercial portfolio spans a broader set of markets. Its local and national agent advisory councils provide feedback on operations, products, services and marketing.

Suppliers and costs

Hanover’s largest expenditures are claim payments and related loss adjustment expenses: the costs of investigating, managing and settling claims. It uses claims adjusters, appraisers, medical specialists and attorneys, supported by technology and a catastrophe response team. As of December 31, 2025, it had approximately 4,900 employees, all located in the United States.

The company pays independent agents primarily through base commissions and bonus plans tied to premiums written, growth and profitability. In the third quarter of 2026, its expense ratio was 30.9%, above its original plan. Hanover attributed this primarily to higher variable compensation for Personal Lines agents and employee incentive costs.

Reinsurers are another part of the cost structure. Hanover purchases coverage for individual risks and catastrophes to limit its exposure to large losses. The availability and price of reinsurance depend on market conditions, and the company may be unable to pass increased costs to policyholders immediately or at all.

Hanover also incurs holding-company expenses and interest expense on corporate debt. Its Other segment includes expenses associated with retirement benefits related to employees and agents of former life insurance subsidiaries.

Competitive position

Hanover competes with national, international, regional and local insurers. They sell through independent agencies, brokers, captive agents and direct channels, including the internet. Hanover competes on product, price, service, local relationships, ratings and claims handling. Its competitors also include mutual insurers, reciprocals and exchanges. No individual competing company is named in the available business descriptions.

In Personal Lines, independent agents face competition from direct insurance writers and the use of comparative rating and pricing tools. Hanover focuses on agents that offer advice and help customers combine policies. In commercial insurance, it serves small and mid-sized accounts and offers specialty products through retail agents and selected specialists.

Our reading: Agency relationships and local offices are a potential source of advantage because they give Hanover access to customers and local market information, but agents can also place business with other insurers. Our reading: The range of commercial and specialty products can support relationships by giving agents coverage options for the same customer, although competition on price and service remains material. Our reading: Hanover’s underwriting and claims capabilities may help it retain business and control costs, but their strength depends on pricing risks and settling claims effectively.

Hanover reported competitive conditions in certain property lines in the third quarter of 2026. Its Hanover Specialty Industrial business was particularly exposed to competition in the larger-property market.

Growth opportunities

Hanover’s growth strategy includes expanding agency relationships, developing products and diversifying its geographic mix. In Personal Lines, it is seeking new agency appointments and deeper relationships in diversification states. The company is also shifting its book toward bundled, higher-value accounts and away from some concentrated exposures.

In the third quarter of 2026, Personal Lines grew 1.7%. Hanover attributed slower growth partly to earlier actions to manage concentrated exposures and to competition. Its Prestige product had double-digit growth in both the third quarter and year to date. The company expects its geographic diversification efforts to reduce concentration and dependence on Michigan and Massachusetts over time.

In Core Commercial, Hanover is pursuing distribution expansion, product development and service improvements for small businesses. Its TAP Sales platform supports agents with quoting and issuing policies. The company is also targeting industry segments in middle-market insurance. Core Commercial net written premiums grew 4.6% in the third quarter of 2026.

Hanover continues to invest in Specialty products and uses both retail agents and selected specialists to reach customers. During the third quarter of 2026, it launched an AI-enabled commercial-lines data exchange that connects with agency data environments and automates parts of the quoting process. It also launched Adjuster Workbench, which brings claims data and decision support into one workflow. Hanover expects the claims tools to improve customer experience and operating performance over time.

Structural risks

• Catastrophes and weather: Hanover expects catastrophe losses as part of its business. Severe weather and other events are volatile and difficult to predict, and commercial property and homeowners coverages have historically produced most of its catastrophe-related claims.
• Claims costs and reserves: Actual claims may exceed reserves, which rely on estimates of future settlements and expenses. Repair costs, medical costs, litigation trends, jury awards and social inflation can increase claims costs after policies have been priced.
• Reinsurance: Coverage may prove inadequate after one significant catastrophe or several large events. Reinsurance availability and pricing can change, and reinsurer failure to honor obligations could cause losses for Hanover.
• Regulation: State rules affect rates, policy terms, underwriting and the ability to cancel policies or withdraw from markets. Restrictions can limit Hanover’s ability to reduce exposure to unprofitable or catastrophe-prone business.
• Competition and distribution: Competitive pressure can affect prices and profitability. Hanover’s results also depend on its relationships with independent agencies, which account for substantially all Core Commercial and Personal Lines sales.
• Investments and liquidity: Market fluctuations and economic conditions can affect the investment portfolio and its returns. As a holding company, Hanover relies on insurance subsidiaries for cash flow and may not receive subsidiary dividends when needed.

Bottom line

Our reading

Our reading: Hanover combines recurring insurance relationships with investment income, relying on independent agents to reach both personal and business customers. Its mix of commercial, specialty and personal coverage provides several sources of premiums, while agency access and underwriting execution are important to maintaining them. Catastrophe losses, claims inflation and regulatory limits on pricing or withdrawing from markets remain central exposures.