The operating income for Hanover Insurance in Q1 2020 was $86.8m compared to $80.7m reported in the corresponding quarter in 2019
The Hanover Insurance Group announced a net loss of $40m, or $1.04 per basic share, in the first quarter of 2020 (Q1 2020), compared to net income of $122.4m, or $2.97 per diluted share, reported in the same quarter in the previous year.
The US insurance group’s operating income for Q1 2020 was $86.8m, or $2.23 per diluted share, compared to $80.7m, or $1.96 per diluted share, reported in the corresponding quarter in 2019.
The company said that the difference between the net loss and operating income in the quarter was mainly because of an after-tax decrease in the fair value of equity securities of $107.6m along with $22.5m in after-tax impairment losses. The two factors were the result of the drastic downturn in the financial markets in March and have been excluded from operating income, said the insurer.
Hanover Insurance’s net premiums written for Q1 2020 were $1.13bn compared to $1.09bn in the same quarter in the prior year.
Its commercial lines, the operating income before taxes was down from $80.2m in Q1 2019 to $54.6m. Net premiums written by the business moved up 4.5% at $707.6m in the first quarter of 2020 compared to the same period the year before.
In personal lines, the operating income before taxes moved up from $26.8m in the first quarter of 2019 to $64.9m in Q1 2020. Net premiums written for the reported quarter were up by 2.1% at $429.3m compared to the prior-year quarter.
Hanover Insurance CEO comments on the Q1 2020 results
Hanover Insurance president and CEO John Roche said: “From a financial perspective, our company remains very strong, as demonstrated by our strong results in the quarter. Our insurance book of business is built on thoughtful and conservative underwriting practices, a diversified, carefully constructed product portfolio and broad-based profitability.
“We believe these elements, combined with our solid balance sheet and ample liquidity, will allow us to successfully manage through the impacts of COVID-19, while continuing to deliver superior industry results.
“I have confidence the industry will respond and perform where contractual business interruption insurance exists, but that the sanctity of the contract will prevail in policies where coverage is excluded.”