Worcester, Mass.-based Hanover Insurance Group Inc. reported first-quarter net income dropped 8 percent, but the firm's chief executive said he remains optimistic about growth for the rest of the year.

The company reported net income dropped $5 million to $59 million, which translated into a 10 cent reduction in earnings per share to $1.12 compared to the same period last year. The results beat analyst's estimates by 9 cents.

Earnings were affected by a reported loss on investments of $5 million and a drop in property-casualty pretax income of $3 million to $98 million.

The company's combined ratio grew 1.2 points to 95 during the period.

During an analyst's conference call today, company executives said catastrophe losses in the personal lines area related to weather events caused the loss. Personal lines pretax net impact of catastrophes stood at $11 million.

Net premium written in the quarter rose 3 percent, or $17 million, to $629 million.

During the conference call Frederick H. Eppinger, chief executive officer of Hanover, said he is bullish about the future prospects for the company over the rest of this year and expected to see modest growth.

He said there would be more consolidation among insurers, principally among the larger companies, and that would mean opportunities for Hanover to step in where agents have lost markets because of the consolidations. He also indicated that Hanover would look for its own acquisition opportunities.

"We have built this company to take advantage of disruption," said Mr. Eppinger. "One of the best days of my life was when St. Paul and Travelers merged. We were able to acquire a lot of great talent, and this [Safeco-Liberty Mutual merger] creates an enormous opportunity for us."

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