Worcester, Mass.-based insurer The Hanover Group Inc. reported its net income rose 17 percent for the second quarter, based on premium growth and favorable loss development.
The company reported net income increased $9 million in the quarter to $60 million, or $1.14 a share, on property-casualty net premium written business of $1.24 billion–an increase of $43 million, or 4 percent over the same period last year.
The p-c combined ratio for the period improved 0.7 points to 94.2.
Hanover did not report first-half earnings. However, combining the reported first-quarter and second-quarter results, the company's income for the first six months of 2007 stands at $123 million, an increase of 35 percent, or $32 million compared with last year.
During the second quarter, the company's life business grew close to $2 million from a loss of $1 million last year to $800,000. Net investment income grew modestly by $1.1 million to $80 million in the quarter.
During an analyst's conference call, company executives said much of the growth came from its specialty areas and ability to provide unique products that allow independent agents to enhance coverages, and in turn improve retentions.
"Our strategy is to take advantage of this kind of [soft] market," said Frederick H. Eppinger, chief executive officer.
He said small regional insurers are not in a position to offer the products and services Hanover can. He indicated the company would sweep up much of the business the competition would not be able to price appropriately.
As for the earning results, he said, "What we are trying to build here is boring earnings growth."
Hanover is ranked 52nd in the top 100 National Underwriter/Fitch Ratings P&C Rankings 2006 (see NU, July 23/30, page 21).
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