To expand its commercial capabilities

The Hanover Insurance Group has entered into a renewal rights agreement with OneBeacon Insurance Group to advance its expansion efforts in western states.

As per the agreement, The Hanover expects to acquire access to as much as $400m in OneBeacon small and middle market commercial business at renewal, including industry programs and middle market niches. At the same time, the transaction will expand The Hanover’s segment, niche and industry program business, adding nearly 20 well established programs to its already strong portfolio. The agreement is effective for renewals beginning January 1, 2010.

Frederick Eppinger, CEO of The Hanover Insurance Group, said: This transaction greatly strengthens our company and further demonstrates our commitment to be the best partner for winning independent agents. In particular, it will significantly accelerate our product segmentation and development in the small and middle market business, create more opportunities with select winning agents, add a significant number of talented professionals to our team, and build on the momentum we have established over the past several years.

The company said that it would acquire additional scale in its core commercial lines, along with distinctive product and service capabilities. In small commercial, the company plans to augment its own product offerings with OneBeacon capabilities, rolling out product enhancements across over a dozen programs, including apartments, contractors, manufacturers, restaurants, retail, human services, technology and others.

In the middle market, the company will offer new coverages in several segments, including brewers, cultural institutions, food industries, media, printers, retail, and professional services. It also plans to make enhancements in several others, including real estate, wholesalers, metal workers and plastics.