Hanover Insurance (AF4) Q3 2026 Earnings Report
DE:AF4 Q3 2026 EPS Results
- Actual EPS
- EUR 4.61
- Consensus EPS
- EUR 4.13
- Beat/Miss
- Beat by +EUR 0.48
- One Year Ago EPS
- EUR 4.56
DE:AF4 Q3 2026 Revenue Results
- Actual Revenue
- EUR 1.55B
- Expected Revenue
- EUR 1.62B
- Beat/Miss
- Missed by -EUR 68.23M
- YoY Revenue Growth
- +4.23%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/28/2026
- Time
- After Close
- Conference Call
- Wednesday, October 28, 2026
DE:AF4 Upcoming Earnings
Hanover Insurance's next earnings date is estimated for February 3, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
DE:AF4 Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive. Management reported record third-quarter operating EPS, approximately 19% operating ROE, improved ex-catastrophe underwriting results across the major segments, strong Specialty and preferred Personal Lines momentum, rising investment income, active capital returns, and full-year combined ratio performance expected to beat original guidance. The primary challenges were competitive market conditions, moderated Personal Lines growth, a 100.5% quarterly Core Commercial combined ratio, higher-than-planned expenses, workers' compensation frequency trends, catastrophe losses, and interest-rate-driven unrealized losses. The highlights significantly outweighed the lowlights.
Company Guidance
Management expects the full-year combined ratio to “clearly beat” its original guidance, while the expense ratio may not hit its “30.3% guide this year”; the fourth quarter CAT load is 5.2%. Core Commercial’s year-to-date combined ratio is “more like 97%,” with opportunities to bring that “below 97% over time.” In Specialty, management expects growth to hold up and “in a number of cases, improve” as it moves into 2027 to 2028.
- Strong Third-Quarter Earnings and ReturnsThird-quarter operating earnings per share were $5.15, the company's best-ever third-quarter result and meaningfully ahead of original expectations. Operating ROE was approximately 19%, while net written premium growth was 3.1%.
- Improved Overall Underwriting PerformanceThe consolidated combined ratio was 92.3%. Excluding catastrophes, the combined ratio was 85.5%, improving 2.6 points from the prior-year quarter. The current accident year loss ratio excluding catastrophes was 55.7%, improving nearly two points year over year, with improvement in each major segment.
- Specialty Growth Across Multiple BusinessesExcluding Hanover Specialty Industrial and Hanover Programs, Specialty generated 6.7% growth. Surety grew 8.8%, E&S growth accelerated from 6.5% in the second quarter to 11.7% in the third quarter, and Management Liability grew 15.5%. Marine and Hanover Professional Liability also delivered accelerated growth compared with the second quarter.
- Strong Specialty Retention and PricingSpecialty retention improved sequentially to 83.2%, while renewal price change improved slightly to 4.3%. Liability rate continued to accelerate, and management expressed confidence in sustained profitable growth across the segment.
- Specialty Underwriting ProfitabilitySpecialty's current accident year ex-catastrophe combined ratio was 84.6%, improving 1.4 points from the prior-year quarter. Its current accident year loss ratio excluding catastrophes was 47.7%, favorable year over year and versus expectations, helped by favorable property performance.
- Preferred Personal Lines Customer MomentumPersonal Lines growth in the higher-value customer segment with Coverage A limits above $500,000 continued to outpace the broader portfolio. Retention in this segment was 86%, premium increased 4%, renewal pricing was approximately one point higher, new business grew 5%, and submission flow increased 21%. Prestige delivered double-digit growth in both the quarter and year to date.
- Personal Lines Underwriting ResultsPersonal Lines produced an 81.9% current accident year ex-catastrophe combined ratio, improving 3.9 points from the prior-year period. Homeowners' ex-catastrophe current accident year loss ratio was 40.6%, improving 6.6 points, while personal auto's was 67.9%, improving 1.2 points. The results reflected earned pricing, favorable frequency, and lower-than-usual large losses.
- Resilient Personal Lines Renewal PricingPersonal Lines renewal pricing remained strong, with auto pricing up 7.1% and home pricing up 10.9% in the third quarter. Umbrella pricing increases also remained strong.
- Core Commercial Premium and Retention PerformanceCore Commercial net written premiums grew 4.6% with renewal pricing change of 7.4%. Middle Market grew 6.7%, supported by historically robust retention that improved more than 3 points year over year.
- Core Commercial Distribution and Automation ExpansionSmall commercial distribution expansion, broad product offerings, and service enhancement remained strategic priorities. TAP Sales production continued to grow, straight-through processing expanded, and Workers' Compensation TAP Sales was scheduled to complete its rollout in the fourth quarter. Management stated that these capabilities lower transaction cost, speed turnaround, improve the agent experience, and support stronger retention fundamentals.
- Core Commercial Underwriting ImprovementCore Commercial's current accident year ex-catastrophe combined ratio was 93.2%, improving 1.1 points from the prior-year quarter. The current accident year loss ratio excluding catastrophes was 60.5%, a slight improvement from 60.6% in the comparable 2025 quarter.
- Technology and AI Deployment ProgressTechnology throughput continued to improve, enabling faster deployment of capabilities and deeper use of AI across underwriting, claims, and customer service. The company launched Adjuster Workbench, advanced Surety workflow and credit certification capabilities, enhanced E&S submission intake and triage, and launched an AI-enabled commercial data exchange capability.
- Rapid Commercial Data Exchange LaunchThe new AI-enabled commercial data exchange connects directly with agency data environments and automates data extraction, appetite and eligibility review, and rating to accelerate quote turnaround. It was developed from concept to production in three months.
- Favorable Reserve Development and Conservative ReservingThird-quarter favorable ex-catastrophe prior-year reserve development was $18.3 million, including $14.8 million in Specialty, $3 million in Core Commercial, and modest favorability in Personal Lines. Management said the reserve position remains very strong, that IBNR as a percentage of total reserves continues to increase, and that reserves are established above actuarial central estimates.
- Strong Investment Income and Portfolio QualityThird-quarter net investment income increased 12.7% to $131.9 million, benefiting from greater investable cash and elevated reinvestment rates. Approximately 88% of invested assets were in cash and investment-grade fixed income; the fixed maturity portfolio had an average rating of A+, with 95% of holdings investment grade. Fixed maturity earned yield increased to 4.58% from 4.33% a year earlier.
- Capital Generation and Share RepurchasesExcluding unrealized losses, book value per share increased 2.7% sequentially after dividends and share repurchases. The company repurchased approximately 386,000 shares for $86 million in the quarter and more than 1.3 million shares year to date through October 26 at an average price of approximately $197. Approximately $546 million remained under the current repurchase authorization.
- Full-Year Combined Ratio Expected to Beat Original GuidanceThrough three quarters, the combined ratio was running a couple of points better than the trajectory contemplated in the original guidance. Management expects the full-year combined ratio to clearly beat its original guidance, despite higher agent profit-sharing and employee incentive expenses associated with the stronger performance.
- Leadership and Strategic PositioningManagement said the leadership transition was well underway and emphasized the company's diversified portfolio, strong agency relationships, underwriting discipline, and focus on investing and growing where returns are most attractive.
DE:AF4 Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 03, 2027 | 2026 (Q4) | 4.90- | 5.18 | ― | ― |
| Oct 28, 2026 | 2026 (Q3) | 4.134.61 | 4.56 | 1.18% (+0.05) | |
| Jul 28, 2026 | 2026 (Q2) | 3.444.75 | 3.89 | 22.07% (+0.86) | |
| Apr 29, 2026 | 2026 (Q1) | 3.784.70 | 3.47 | 35.66% (+1.24) | |
| Feb 03, 2026 | 2025 (Q4) | 4.505.18 | 4.76 | 8.83% (+0.42) | |
| Oct 29, 2025 | 2025 (Q3) | 3.844.56 | 2.73 | 66.89% (+1.83) | |
| Jul 30, 2025 | 2025 (Q2) | 2.803.89 | 1.68 | 131.38% (+2.21) | |
| Apr 30, 2025 | 2025 (Q1) | 3.093.47 | 2.76 | 25.65% (+0.71) | |
| Feb 04, 2025 | 2024 (Q4) | 3.014.76 | 2.8 | 69.97% (+1.96) | |
| Oct 30, 2024 | 2024 (Q3) | 2.262.73 | 0.17 | 1505.26% (+2.56) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat Missed
