THG

The Hanover Insurance Group is a well-run property & casualty insurer (commercial, specialty, and personal lines) that has executed a clear underwriting turnaround. FY2025 net income jumped 55.5% to $663M and diluted EPS rose 55.2% to $18.16 on a 5.7% revenue increase to $6.59B, lifting ROE to a strong 18.5%. The trajectory is striking against recent history: net income was just $116M (FY2022) and $35.3M (FY2023) when elevated catastrophe and personal-lines losses crushed results, then recovered to $426M (FY2024) and now $663M. That rebound reflects rate increases earning through, tighter underwriting, and a more benign loss environment.

The capital and cash picture is healthy. Operating cash flow grew 46.1% to $1.18B, equity rose 25.7% to $3.57B (helped by investment-mark recovery and retained earnings), and cash jumped to $1.12B. Leverage is normal for an insurer at 3.74x liabilities/equity, with modest debt ($843M long-term plus $375M short-term). Management is returning more capital — buybacks rose to $129M (from a low base) and dividends grew 5.2% to $131M, on a share count down 2.2% to 35.1M.