Highlights

  • Hanover shows 37.85% one-year basic EPS growth, a P/E of 11.38 and PEG of 0.13.
  • Second quarter net income was $191.6 million against $157.1 million a year earlier.
  • The combined ratio was 91.2% in the second quarter, against 92.5% a year earlier.
  • Hanover authorized a $700 million repurchase program; about $667 million remained at June 30, 2026.

Hanover Insurance Group (NYSE:THG) reported second quarter 2026 net income of $191.6 million, and the undervalued growth stock figures read 37.85% one-year growth in basic earnings per share, a trailing twelve-month P/E of 11.38 and an expected-basis PEG of 0.13, with shares trading at USD 234.87 on October 28, 2026, down 0.41%. On the company's side, the property and casualty insurer redeemed $375.0 million of 4.50% senior debentures in January, authorized a new stock repurchase program of up to $700 million on May 13, and added catastrophe bond coverage effective July 1.

Based in Worcester, Massachusetts, and incorporated in Delaware, Hanover Insurance Group is the holding company whose principal property and casualty subsidiaries are The Hanover Insurance Company and Citizens Insurance Company of America. Its strategy focuses on the independent agency channel. It reports four segments: Core Commercial (small commercial and middle market), Specialty, Personal Lines (personal automobile, homeowners and other coverages) and Other.

Growth: Second Quarter Earnings, Premiums and Segment Results

Net income was $191.6 million in the second quarter against $157.1 million, and $378.4 million for the first six months against $285.3 million. Second quarter basic earnings per share were $5.48 against $4.37, and diluted earnings per share were $5.38 against $4.30. For the six months, basic earnings per share were $10.79 against $7.94, and diluted earnings per share were $10.58 against $7.80. The company said the quarterly increase was primarily due to higher after-tax operating income of $30.5 million.

Total revenues were $1,726.2 million against $1,654.4 million, with premiums of $1,597.6 million against $1,545.3 million and net investment income of $119.6 million against $105.5 million. Net premiums written were $1,656.8 million against $1,583.8 million.

Operating income before interest expense and income taxes, a non-GAAP measure, was $251.9 million against $209.9 million, which the company tied primarily to lower catastrophe losses, higher net investment income and improvements in current accident year underwriting results, led by Personal Lines. Personal Lines was $104.9 million against $57.4 million, and Core Commercial was $77.5 million against $83.9 million.

Valuation: P/E of 11.38, PEG of 0.13 and Cash Flow

The P/E ratio of 11.38 is measured on trailing twelve-month earnings, and the PEG ratio of 0.13 on expected growth. The total combined ratio was 91.2% against 92.5%. Net cash provided by operating activities was $331.1 million for the six months against $245.5 million, and total shareholders' equity was $3,672.5 million at June 30, 2026 against $3,571.5 million at December 31, 2025.

Capital and Balance Sheet: Repurchases, Dividends and Debt

Share repurchases totaled $142.9 million in the first six months, covering approximately 0.8 million shares, of which 0.2 million were under the new program. The Board authorized the program of up to $700 million on May 13, 2026, terminating the previous one, and approximately $667 million remained available at June 30. The company paid two quarterly dividends of $0.95 per share, totaling $66.6 million.

Total debt was $844.0 million against $1,218.3 million at December 31, 2025, reflecting the January 15 redemption of $375.0 million of 4.50% senior debentures. Remaining debt included $500.0 million of senior debentures maturing in 2035, $300.0 million maturing in 2030 and $50.1 million of subordinated debentures maturing February 3, 2027. The holding company held approximately $377.9 million of fixed maturities and cash and had no borrowings under its $150.0 million revolving credit facility.

Disclosed Risks and Outlook: Catastrophe Losses, Core Commercial and Reinsurance

Pre-tax catastrophe losses were $190.7 million for the first six months against $203.1 million, primarily from severe convective storms across multiple states, and included $61.7 million of favorable prior year catastrophe reserve development. Core Commercial underwriting profit was $23.2 million in the second quarter against $37.2 million, and Core Commercial and Specialty operating income were lower than a year earlier. The company noted that competitive conditions in Core Commercial and Specialty require disciplined underwriting. Net asbestos and environmental reserves were $11.2 million. The company said legal proceedings are not expected to have a material effect on its financial position, although they could have a material effect on results of operations for a particular quarterly or annual period.

The filing does not give numerical earnings guidance. The company stated that it will continue to seek rate increases that meet or exceed underlying loss cost trends and to pursue profitable growth through independent agents. Effective July 1, 2026, its property per risk treaty expanded to cover up to $125 million with a $3 million retention, its core property catastrophe treaty provides coverage up to $2.05 billion less a $200 million retention, and a new catastrophe bond agreement provides coverage of up to $150.0 million through June 30, 2029.