{"id":3946,"date":"2023-05-04T01:33:06","date_gmt":"2023-05-04T05:33:06","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/hanover-insurance-group-rising-costs-pressuring-combined-ratio-nysethg\/"},"modified":"2023-05-04T01:33:07","modified_gmt":"2023-05-04T05:33:07","slug":"hanover-insurance-group-rising-costs-pressuring-combined-ratio-nysethg","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=3946","title":{"rendered":"Hanover Insurance Group: Rising Costs Pressuring Combined Ratio (NYSE:THG)"},"content":{"rendered":"
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Investment Thesis: I do not take a bullish view on Hanover Insurance Group (NYSE:THG<\/span>) at this time.<\/p>\n

In a previous article back in February, I made the argument that The Hanover Insurance Group could see little growth in the short to medium term, owing to a rising combined ratio across the Personal Lines segment due to inflationary pressures – in spite of resilient performance across the Core Commercial segment.<\/span><\/p>\n

Since my last article, THG stock is down by just over 16%:<\/p>\n

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ycharts.com<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

The purpose of this article is to assess whether Hanover Insurance Group has the potential to rebound from here – taking recent financial performance into consideration.<\/p>\n

Performance<\/h2>\n

When looking at Q1 2023 financial results, we can see that the combined ratio (the sum of expenses and losses over the earned premium) for both Core Commercial and Personal Lines has increased from that of last year – while that of Specialty decreased slightly (all ratios excluding the impact of catastrophic losses):<\/span><\/p>\n

<\/span><\/p>\n\n\n\n\n\n
<\/td>\nMarch 2022<\/strong><\/td>\nMarch 2023<\/strong><\/td>\n<\/tr>\n
Core Commercial<\/td>\n88.9<\/td>\n92.1<\/td>\n<\/tr>\n
Specialty<\/td>\n85<\/td>\n83<\/td>\n<\/tr>\n
Personal Lines<\/td>\n93.5<\/td>\n96.2<\/td>\n<\/tr>\n<\/table>\n

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