Hanover Insurance Group reports $172.6M net income

Cover page 2 changes

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For the quarterly period ended June September 30, 2026

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The number of shares outstanding of the registrant s common stock was 34,820,221 34,373,387 as o f July October 27, 2026.

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Financial statements 126 changes

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Credit-related impairments

Recoveries (impairments) on investments:

Losses on Intent to sell securities

Total recoveries (impairments) on investments

Total net realized and unrealized investment gains losses

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CONSOLIDATED STATEMENTS OF COM PREHENSIVE INCOME (LOSS) (UNAUDITED)

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Comprehensive income (loss)

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Fixed maturities, at fair value (amortized cost of $ 10,320.6 10,471.8 and $ 9,685.7 )

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Treasury stock at cost ( 25.6 26.0 and 25.1 million shares)

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Net appreciation (depreciation) on available-for-sale securities ( 18.7 ( 87.6 ( 203.9 ( 236.0 ( 203.9 ( 236.0

Net appreciation (depreciation) on available-for-sale securities ( 301.6 ( 389.2 ( 505.5 ( 147.6 ( 505.5 ( 147.6

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Net realized and unrealized investment (gains) losses

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Deferred income tax expense (benefit)

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Change in premiums receivable, net of reinsurance premiums payable ( 88.9 133.8 ( 81.7 126.8

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Proceeds from disposals of equity securities and other investments ( 1,792.1 2,447.2 ( 1,818.9 2,807.2

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Proceeds from issuance of debt, net

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Net cash (used in) provided by financing activities

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In the opinion of the Company s management, the accompanying interim consolidated financial statements reflect all adjustments, consisting of normal recurring items, necessary for a fair presentation of the financial position and results of operations. The results of operations for the six nine months ended June September 30, 2026 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the Company s 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission ( SEC ) on February 20, 2026.

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The Company enters into various agreements that may require its fixed maturities to be held as collateral by others. At June September 30, 2026 and December 31, 2025 , fixed maturities with fair values of $ 341.4 316.5 million and $ 339.2 million, respectively, were held as collateral for the Federal Home Loan Bank ( FHLB ) collateralized borrowing program. Additionally, the Company deposits funds with various state governmental authorities and trustees. For a discussion of the Company s deposits with these state governmental authorities and trustees, see Note 2 Investments in the Notes to Consolidated Financial Statements in the Company s 2025 Annual Report on Form 10-K.

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The following tables provide information about the Company s available-for-sale fixed maturity securities that were in an unrealized loss position at June September 30, 2026 and December 31, 2025, including the length of time the securities have been in an unrealized loss position:

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Six Months Ended June 30,

For the three months ended June 30, 2026 , the Company recognized impairment losses of $ 2.3 million, consisting of $ 1.3 million on mortgage loans and $ 1.0 million on fixed maturities. For the six months ended June 30, 2026 , the Company recognized impairment losses of $ 4.3 million, consisting of $ 2.8 million on mortgage loans and $ 1.5 million on fixed maturities. For both the three and six months ended June 30, 2025, the Company recognized net impairments of $ 2.9 million, consisting primarily of $ 2.6 million and $ 2.7 million on mortgage loans, respectively.

Three Months Ended June September 30,

Nine Months Ended September 30,

For the three months ended September 30, 2026, net recoveries were de minimis. For the nine months ended September 30, 2026 , the Company recognized impairment losses of $ 4.1 million, consisting of $ 3.3 million on fixed maturities and $ 0.8 million on mortgage loans. For the three months ended September 30, 2025, impairments were de minimis. For the nine months ended September 30, 2025 , the Company recognized net impairment losses of $ 3.0 million, primarily related to mortgage loans.

At June September 30, 2026 and December 31, 2025, the allowance for credit losses on mortgage loans was $ 9.0 7.0 million and $ 8.1 million, respectively. At June September 30, 2026 and December 31, 2025, the allowance for credit losses on available-for-sale debt securities was not material. de minimis.

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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Six Months Ended June 30,

recognized in income:

On securities still held

Pre-tax net realized and unrealized gains (losses) on equity securities recognized in income included the following:

Three Months Ended June September 30,

Nine Months Ended September 30,

Net realized and unrealized gains (losses) on equity securities recognized in income:

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On securities still held

Total net realized and unrealized gains (losses) on equity securities recognized in income

securities recognized in income

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The Company has processes designed to ensure that the values received from its third-party pricing services are accurately recorded, that the data inputs and valuation approaches and techniques utilized are appropriate and consistently applied, and that the assumptions are reasonable and consistent with the objective of determining fair value. The Company reviews the pricing services policies describing its methodology, processes, practices and inputs, including various financial models, used to value securities. For assets carried at fair value, the Company performs a review of the fair value hierarchy classifications and of prices received from its pricing services on a quarterly basis. Also, the Company reviews the portfolio pricing, including a process for which securities with changes in prices that exceed a defined threshold are verified to independent sources, if available. If upon review, the Company is not satisfied with the validity of a given price, a pricing challenge would be submitted to the applicable pricing service along with supporting documentation for its review. The Company does not adjust quotes or prices obtained from the pricing services unless the pricing service agrees with the Company s challenge. During the first six nine months of 2026 and 2025, the Company did not adjust any prices received from its pricing services.

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Limited partnerships measured at fair value using the NAV based on an ownership interest in partners capital have not been included in the hierarchy tables. At June September 30, 2026 and December 31, 2025 , the fair values of these investments were $ 61.2 61.6 million and $ 64.1 million, respectively, and were less than 1 % of total investment assets.

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Balance April 1, 2026

Three Months Ended June September 30, 2026

Balance July 1, 2026

Total losses Included in net realized and unrealized

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Balance June 30, 2026

Balance April 1, 2025

Included in other comprehensive income (loss) - changes

in net unrealized gains (losses) on investment securities

Balance September 30, 2026

Changes in net unrealized gains (losses) for the period

included in other comprehensive income (loss) for

assets held at the end of the period

Three Months Ended June September 30, 2025

Balance July 1, 2025

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Balance June 30, 2025

Balance September 30, 2025

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Six Months Ended June 30, 2026

Nine Months Ended September 30, 2026

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Total gains Included in net realized and unrealized

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Balance June 30, 2026

Six Months Ended June 30, 2025

Included in other comprehensive income (loss) - changes

in net unrealized gains (losses) on investment securities

Balance September 30, 2026

Changes in net unrealized gains (losses) for the period

included in other comprehensive income (loss) for

assets held at the end of the period

Nine Months Ended September 30, 2025

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Balance June 30, 2025

Balance September 30, 2025

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There were no securities transferred between Level 2 and Level 3 during the three and six nine months ended June September 30, 2026 and 2025 . The Company held no Level 3 liabilities for the six nine months ended June September 30, 2026 and 2025.

The following table provides quantitative information about the significant unobservable inputs used by the Company in the fair value measurements of Level 3 assets. Valuation of $ 11.3 4.6 million for equity securities based on dealer quotes for which there was lack of transparency as to inputs used to develop the valuation have been excluded.

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At June September 30, 2026, the Company was in compliance with the covenants associated with its debt indentures and credit arrangements.

Income tax expense for the six nine months ended June September 30, 2026 and 2025 has been computed using estimated annual effective tax rates. These rates are revised, if necessary, at the end of each successive interim period to reflect current estimates of the annual effective tax rates.

The tax provision was comprised of U.S. federal and state income tax expense of $ 103.5 151.5 m illion and $ 73.8 122.3 million for the six nine months ended June September 30, 2026 and 2025, respectively.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions, The Company and its subsidiaries are subject to U.S. federal and state income tax examinations for years after 2020.

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Three Months Ended June September 30,

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Six Months Ended June 30,

Nine Months Ended September 30,

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and 46 more changes in the filing

MD&A 17 changes

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During the six nine months ended June September 30, 2026, our net income was $378.4 $551.0 million, compared to $285.3 $464.0 million for the six nine months ended June September 30, 2025, an improvement of $93.1 $87.0 million. This favorable change was primarily due to higher after-tax operating income.

Operating income before interest expense and income taxes (a non-GAAP financial measure; see also Results of Operations Consolidated Non-GAAP Financial Measures ) was $502.1 $746.5 million for the six nine months ended June September 30, 2026, compared to $396.3 $644.0 million for the six nine months ended June September 30, 2025, an improvement of $105.8 $102.5 million. This increase was primarily due to improvements in lower current accident year losses, principally in Personal Lines, higher net investment income and earned premium growth, and lower partially offset by higher catastrophe losses.

Pre-tax catastrophe losses were $190.7 $300.4 million for the six nine months ended June September 30, 2026, compared to $203.1 $249.3 million during the same period of 2025, a decrease an increase of $12.4 $51.1 million. The catastrophe losses in the first six nine months of 2026 were primarily due to severe convective storms across multiple states. Included in pre-tax catastrophe losses were $61.7 $73.7 million and $18.0 million for the six nine months ended June September 30, 2026 and 2025, respectively, of favorable prior year catastrophe reserve development. The favorable development in the first six nine months of 2026 largely related to 2025 catastrophe events. Net favorable development on prior years non-catastrophe loss reserves was $46.5 $64.8 million for the six nine months ended June September 30, 2026, compared to $38.2 $50.3 million for the six nine months ended June September 30, 2025, an increase of $8.3 $14.5 million.

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Net premiums written increased 5.7% 5.3% in the first six nine months of 2026, compared to the same period in 2025, primarily due to renewal price increases and, to a lesser extent, an increase in new business volume. Operating income before interest expense and income taxes increased in the first six nine months of 2026, compared to the same period in 2025, primarily due to higher net investment income and improvements in current accident year underwriting results, and lower partially offset by higher catastrophe losses. The competitive nature of the Core Commercial market requires us to be highly disciplined in our underwriting process to ensure that we write business at acceptable margins, and we continue to seek rate increases across many lines of business, as appropriate.

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Net premiums written increased 3.4% 3.3% in the first six nine months of 2026, compared to the same period in 2025, primarily due to an increase in new business volume the impact of renewal price increases and, to a lesser extent, renewal price increases. new business volume. Operating income before interest expense and income taxes increased in the first six nine months of 2026 compared to the same period in 2025, primarily due to lower catastrophe losses and higher net investment income and improvements in current accident year underwriting results. The competitive nature of the Specialty market requires us to be highly disciplined in our underwriting process to ensure that we write business at acceptable margins, and we continue to seek rate increases across many lines of business, as appropriate.

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Net premiums written increased 2.7% 2.3% in the first six nine months of 2026, compared to the same period in 2025, primarily due to higher new business and, to a lesser extent, the impact of renewal price increases. Operating income before interest expense and income taxes increased in the first six nine months of 2026, compared to the same period in 2025, primarily due to improvement improvements in current accident year underwriting results, and higher favorable development on prior year reserves and higher net investment income, partially offset by an increase in catastrophe losses.

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Primary business operations include insurance products and services currently provided through four reporting segments: Core Commercial, Specialty, Personal Lines and Other. Core Commercial includes commercial multiple peril, commercial automobile, workers compensation, and other commercial lines coverages provided to small and mid-sized businesses. Specialty includes four divisions of business: Marine and Industrial Property, Professional and Executive Lines, E&S and Alternative Markets, and Surety and Other. E&S and Alternative Markets includes coverages such as excess and surplus lines, program business (providing commercial insurance to markets with specialized coverage or risk management need related to groups of similar businesses) and specialty general liability coverage. Personal Lines includes personal automobile, homeowners and other personal coverages, such as umbrella. The Other segment includes earnings on holding company assets; holding company, public company governance and other expenses, including certain costs associated with retirement benefits related to employees and agents of the Company s former life insurance subsidiaries; and our run-off direct asbestos and environmental business, run-off voluntary assumed property and casualty pools, and run-off product liability business.

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Consolidated net income for the three months ended June September 30, 2026 was $191.6 $172.6 million, compared to $157.1 $178.7 million for the three months ended June September 30, 2025, an increase a decrease of $34.5 $6.1 million. This increase decrease was primarily due to higher after-tax operating income net realized and unrealized investment losses of $30.5 $5.1 million. Operating income before interest expense and income taxes was $251.9 $244.4 million for the three months ended June September 30, 2026, compared to $209.9 $247.7 million for the three months ended June September 30, 2025, an increase a decrease of $42.0 $3.3 million. This increase decrease was primarily due to lower higher catastrophe losses, higher net investment income and partially offset by improvements in current accident year underwriting results, driven by Personal Lines, and higher net investment income.

Consolidated net income for the six nine months ended June September 30, 2026 was $378.4 $551.0 million, compared to $285.3 $464.0 million for the six nine months ended June September 30, 2025, an increase of $93.1 $87.0 million. This increase was primarily due to higher after-tax operating income of $77.2 $74.7 million and, to a lesser extent, an improvement in net realized and unrealized investment gains and losses from losses of $20.3 million in 2025 to gains of $0.5 $15.7 million. in 2026. Operating income before interest expense and income taxes was $502.1 $746.5 million for the six nine months ended June September 30, 2026, compared to $396.3 $644.0 million for the six nine months ended June September 30, 2025, an increase of $105.8 $102.5 million. This increase was primarily due to improvements in lower current accident year losses, principally in Personal Lines, higher net investment income and earned premium growth, and lower partially offset by higher catastrophe losses.

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Net realized and unrealized investment gains losses

Income tax benefit (expense) on non-operating items

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Three Months Ended June September 30, 2026 Compared to Three Months Ended June September 30, 2025

Operating income before interest expense and income taxes was $251.9 $244.4 million for the three months ended June September 30, 2026, compared to $209.9 $247.7 million for the three months ended June September 30, 2025, an improvement a decrease of $42.0 $3.3 million. This increase decrease was primarily due to lower higher catastrophe losses, higher net investment income and partially offset by improvements in current accident year underwriting results, driven by principally in Personal Lines, and higher net investment income.

Net premiums written increased $73.0 $53.6 million for the three months ended June September 30, 2026, compared to the three months ended June September 30, 2025. The increase in net premiums written was due to an increase in new business volume and the impact of renewal price increases and, to a lesser extent, an increase in new business volume.

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Three Months Ended June September 30, 2026

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Three Months Ended June September 30, 2025

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Three Months Ended June September 30,

Plan of distribution 65 changes

Core Commercial underwriting profit for the six months ended June 30, 2026 was $41.0 million, compared to $17.2 million for the six months ended June 30, 2025, an increase of $23.8 million. Catastrophe losses for the six months ended June 30, 2026 were $56.8 million, compared to $68.7 million for the six months ended June 30, 2025, a decrease of $11.9 million.

Our Other segment had operating profit of $3.3 million for the six months ended June 30, 2026, compared to operating loss of $1.8 million for the six months ended June 30, 2025, a favorable change of $5.1 million, due to lower expenses and higher net investment income.

Core Commercial net premiums written were $1,205.2 $1,854.1 million for the six nine months ended June September 30, 2026, compared to $1,140.6 $1,760.9 million for the six nine months ended June September 30, 2025. The $64.6 $93.2 million increase in net premiums written was primarily driven by the impact of renewal price increases and to a lesser extent, an increase in new business volume.

Personal Lines Core Commercial underwriting profit for the six nine months ended June September 30, 2026 was $121.7 $36.7 million, compared to $86.9 $31.4 million for the six nine months ended June September 30, 2025, an increase of $34.8 $5.3 million. Catastrophe losses for the six nine months ended June September 30, 2026 were $114.3 $102.1 million, compared to $105.1 $86.5 million for the six nine months ended June September 30, 2025, an increase of $9.2 $15.6 million.

Core Commercial current accident year underwriting profit, excluding catastrophes, was $95.6 $133.6 million for the six nine months ended June September 30, 2026, compared to $81.6 $112.4 million for the six nine months ended June September 30, 2025. This $14.0 $21.2 million increase was primarily driven by earned premium growth and lower current accident year losses, partially offset by the impact of higher reinsurance reinstatement premiums. Within current accident year losses, lower large property losses in our commercial multiple peril line and, to a lesser extent, lower losses in our commercial automobile line were partially offset by higher losses in our workers compensation line of business.

Personal Lines Specialty net premiums written were $1,260.2 $1,142.7 million for the six nine months ended June September 30, 2026, compared to $1,227.5 $1,105.7 million for the six nine months ended June September 30, 2025. The $32.7 $37.0 million increase in net premiums written was primarily due to higher new business and, to a lesser extent, the impact of renewal price increases and higher new business volume.

Specialty underwriting profit for the six nine months ended June September 30, 2026 was $98.3 $156.9 million, compared to $89.0 $141.8 million for the six nine months ended June September 30, 2025, an increase of $9.3 $15.1 million. Catastrophe losses for the six nine months ended June September 30, 2026 were $19.6 $32.0 million, compared to $29.3 $35.3 million for the six nine months ended June September 30, 2025, a decrease of $9.7 $3.3 million.

Specialty current accident year underwriting profit, excluding catastrophes, was $92.9 $149.1 million for the six nine months ended June September 30, 2026, compared to $89.9 $138.7 million for the six nine months ended June September 30, 2025. This $3.0 $10.4 million increase was primarily driven by higher earned premium growth partially offset by higher and improvements in current accident year losses. Within current accident year losses, higher lower losses in our Marine E&S and Industrial Property Alternative Markets division were partially offset by lower higher losses in our E&S Marine and Alternative Markets division. Industrial Property and Professional and Executive Lines divisions.

Specialty Personal Lines net premiums written were $751.1 $2,012.2 million for the six nine months ended June September 30, 2026, compared to $726.5 $1,966.9 million for the six nine months ended June September 30, 2025. The $24.6 $45.3 million increase in net premiums written was primarily due to an increase in higher new business volume and, to a lesser extent, the impact of renewal price increases.

Personal Lines underwriting profit for the nine months ended September 30, 2026 was $186.7 million, compared to $153.2 million for the nine months ended September 30, 2025, an increase of $33.5 million. Catastrophe losses for the nine months ended September 30, 2026 were $166.3 million, compared to $127.5 million for the nine months ended September 30, 2025, an increase of $38.8 million. Net favorable development on prior years loss reserves for the nine months ended September 30, 2026 was $20.0 million, compared to $6.3 million for the nine months ended September 30, 2025, an increase of $13.7 million.

Personal Lines current accident year underwriting profit, excluding catastrophes, was $216.7 $333.0 million for the six nine months ended June September 30, 2026, compared to $186.6 $274.4 million for the six nine months ended June September 30, 2025. This $30.1 $58.6 million increase was primarily due to lower current accident year losses in our homeowners and other personal lines and, to a lesser extent, our personal automobile line, partially offset by higher performance-based agency compensation expenses.

Our Other segment had operating profit of $0.5 million for the nine months ended September 30, 2026, compared to $1.5 million for the nine months ended September 30, 2025, a decrease of $1.0 million.

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Loss and LAE reserves in our Other core commercial lines include monoline general liability, commercial umbrella, and monoline property. Marine E&S and Industrial Property Alternative Markets division includes marine excess and specialty industrial surplus lines, program business, and commercial property specialty general liability coverages. Professional and Executive Lines division includes management liability, fidelity and crime, professional liability and other property and liability lines for healthcare firms. E&S Marine and Alternative Markets Industrial Property division includes excess and surplus lines, program business, marine and specialty general liability industrial and commercial property coverages. Surety and Other includes contract and commercial surety coverages. Loss and LAE reserves in our Total Other segment relate to run-off direct asbestos and environmental, run-off voluntary assumed property and casualty reinsurance pools, and run-off product liability business.

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Six Months Ended June 30,

Nine Months Ended September 30,

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It is not possible to know whether the factors that affected loss reserves in the first six nine months of 2026 will also occur in future periods. We encourage you to read our 2025 Annual Report on Form 10-K for more information about our reserving process and the judgments, uncertainties and risks associated therewith.

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For the six nine months ended June September 30, 2026, favorable catastrophe loss development was $61.7 $73.7 million, primarily due to lower than expected losses related to several convective storms across multiple states from accident year 2025, and to a lesser extent, accident year 2024, impacting our commercial multiple peril line in Core Commercial and our homeowners line in Personal Lines. In 2025, favorable catastrophe development was $18.0 million, primarily due to lower than expected losses related to events from accident year 2023, and to a lesser extent, accident year 2024, including several convective storms across multiple states and Winter Storm Elliot.

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For the six nine months ended June September 30, 2026, net favorable loss and LAE development, excluding catastrophes, was $46.5 $64.8 million. Specialty favorable loss and LAE development of $25.0 $39.8 million was primarily due to lower than expected losses in our E&S and Alternative Markets, Marine & Industrial Property, and Surety and Other Specialty Lines divisions. Personal Lines favorable loss and LAE development of $19.3 $20.0 million was primarily due to lower than expected losses in our homeowners property coverages.

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For the six nine months ended June September 30, 2025, net favorable loss and LAE development, excluding catastrophes, was $38.2 $50.3 million. Specialty favorable loss and LAE development of $28.4 $38.4 million was primarily due to lower than expected losses in our Professional and Executive Lines, and Marine & Industrial Property, and E&S and Alternative Markets divisions. Within Personal Lines lower than expected losses favorable loss and LAE development of $5.4 $6.3 million were driven primarily by homeowners coverages. Core Commercial favorable loss and LAE development of $4.3 $5.5 million was primarily due to favorable development lower than expected losses in the workers compensation and commercial multiple peril lines, partially offset by unfavorable development higher than expected losses in the commercial automobile line.

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As of June September 30, 2026, we had $11.2 $10.1 million of net asbestos and environmental reserves, comprised of $9.5 $8.5 million of direct reserves and $1.7 $1.6 million of assumed reinsurance pool reserves. This compares to net reserves of $10.5 million at December 31, 2025, comprised of $8.3 million of direct reserves and $2.2 million of assumed reinsurance pool reserves. These assumed reinsurance pool reserves relate to pools in which we have terminated our participation, however, we continue to be subject to claims related to years in which we were a participant. Results of operations from these pools are included in our Other segment.

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Reinsurance recoverables were $2,078.9 $2,170.9 million and $2,011.1 million at June September 30, 2026 and December 31, 2025, respectively, of which $83.0 $58.2 million and $62.6 million, respectively, represent billable recoverables. A reinsurance recoverable is billable after an eligible reinsured claim is paid by an insurer. Billable reinsurance recoverables related to the Michigan Catastrophic Claims Association (the MCCA ) were $33.9 $29.8 million and $30.5 million at June September 30, 2026 and December 31, 2025, respectively, and billable non-MCCA reinsurance recoverables totaled $49.1 $28.4 million and $32.1 million at June September 30, 2026 and December 31, 2025, respectively. Billed balances outstanding greater than 90 days at June September 30, 2026 and December 31, 2025 were not material.

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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The increase in net investment income for both the three and six nine months ended June September 30, 2026 was primarily due to the continued investment of operational cashflows and, to a lesser extent, the impact of reinvesting at higher interest rates in the fixed maturity portfolio and higher partnership income. Income from partnerships can vary significantly from period to period based on the performance in the underlying portfolios.

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Mortgage and other loans

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Mortgage and other loans

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Total cash and investments decreased $337.3 $327.7 million, or 2.9%, 2.8%, for the six nine months ended June September 30, 2026 as compared to December 31, 2025. The decrease in total cash and investments was primarily due to the funding of financing activities, including our debt retirement, common stock repurchases and the funding of our dividend payments, as well as to net market value depreciation in our fixed maturity portfolio. These decreases were partially offset by the continued investment of cashflows from operations.

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Net Unrealized Gain (Loss)

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Based on ratings by the National Association of Insurance Commissioners ( NAIC ), approximately 95% of our fixed maturity portfolio consisted of investment-grade securities at June September 30, 2026 and December 31, 2025. The quality of our fixed maturity portfolio remains strong based on ratings, capital structure position, support through guarantees, underlying security, issuer diversification and yield curve position. Our U.S. Treasury and government agencies fixed maturities are either directly or indirectly backed by, or benefit from the full faith and credit support of, the U.S. government. Our municipal bonds include revenue bonds and general obligations of state and local issuers. Corporate fixed maturities include publicly traded and privately placed securities in the industrial, financial, and utility sectors. Residential mortgage-backed securities are structured securities that are collateralized by residential real estate loans and are primarily U.S. agency-backed. Our commercial mortgage-backed securities are structured securities that are collateralized by commercial real estate loans and are well-diversified by geography, property type, expected maturity and vintage year. Our other asset-backed securities are structured securities that are primarily collateralized by consumer and corporate borrowings, including collateralized loan obligations.

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For the three months ended June 30, 2026, we recognized impairment losses of $2.3 million, consisting of $1.3 million on mortgage loans and $1.0 million on fixed maturities. For the six months ended June 30, 2026, we recognized impairment losses of $4.3 million, consisting of $2.8 million on mortgage loans and $1.5 million on fixed maturities. For both the three and six months ended June 30, 2025, we recognized net impairments of $2.9 million, consisting primarily of $2.6 million and $2.7 million on mortgage loans, respectively.

Equity securities primarily consist of U.S. income-oriented large capitalization common stocks and a broadly diversified U.S. equity index exchange-traded fund. funds.

Although we expect to invest new funds primarily in investment-grade fixed maturities, we have invested, and expect to continue to invest, a portion of funds in below investment-grade fixed maturities, limited partnerships, common equity securities and other investment assets.

For the three months ended September 30, 2026, net recoveries were de minimis. For the nine months ended September 30, 2026, we recognized impairment losses of $4.1 million, consisting of $3.3 million on fixed maturities and $0.8 million on mortgage loans. For the three months ended September 30, 2025, impairments were de minimis. For the nine months ended September 30, 2025, we recognized net impairment losses of $3.0 million, primarily related to mortgage loans.

At June September 30, 2026 and December 31, 2025, the allowance for credit losses on mortgage loans was $9.0 $7.0 million and $8.1 million, respectively. At June September 30, 2026 and December 31, 2025, the allowance for credit losses on available-for-sale debt securities was not material. de minimis.

The carrying value of fixed maturity securities mortgage loans on non-accrual status at June September 30, 2026 was $2.1 $7.1 million. The carrying value of mortgage loans fixed maturity securities on non-accrual status at June September 30, 2026 was $7.1 $2.5 million. We held no fixed maturities or mortgage loans on non-accrual status at December 31, 2025. The effects on income of non-accruals compared with amounts that would have been recognized in accordance with the original terms of the fixed maturities and mortgage loans were not material de minimis for the periods ended June September 30, 2026 and December 31, 2025. Any defaults in the fixed maturities or mortgage loan portfolios in future periods may negatively affect investment income.

Gross unrealized losses on fixed maturities at June September 30, 2026 were $310.7 $642.8 million, an increase of $43.5 $375.6 million compared to December 31, 2025. This increase was primarily due to higher interest rates. At June September 30, 2026, gross unrealized losses consisted primarily of $89.3 million on residential mortgage-backed securities, $74.2 $216.0 million on corporate fixed maturities, $71.9 $187.5 million on residential mortgage-backed securities, $112.0 million on municipals, and $42.4 $59.3 million on U.S. government securities. See Note 3 Investments in the Notes to Interim Consolidated Financial Statements.

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The following table sets forth gross unrealized losses for fixed maturities by maturity period at June September 30, 2026 and December 31, 2025. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties, or we may have the right to put or sell the obligations back to the issuers.

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The U.S. economy continued to expand at a solid pace during the second third quarter of 2026, reflecting a stable labor market despite continued, elevated inflation. The Federal Reserve maintained increased the Effective Federal Funds target at Rate by 0.25% in September 2026 to a target range of 3.50% to 3.75% to 4.00%. Heightened geopolitical risks continue to impact economic uncertainty, the extent of which is unknown. These risks, among others, may increase the likelihood of volatility in the market value of our investment holdings, including defaults on our fixed income investments particularly with respect to non-investment grade debt securities. Although a rigorous credit analysis of our fixed income investments investment holdings is performed, it is difficult to identify with specificity which issuers, industries, or markets, if any, will be most affected. As a result, the value of our fixed maturity investment portfolio could change in ways we cannot currently anticipate, and we could incur additional realized and unrealized losses in future periods.

Our investment portfolio and shareholders equity can be significantly impacted by changes in market values of our securities. Market volatility could increase and defaults on fixed income securities investments could occur. As a result, we could incur additional realized and unrealized losses in future periods, which could have a material adverse impact on our results of operations and/or financial position.

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Three Months Ended June September 30,

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Net realized and unrealized investment gains losses

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Six Months Ended June 30,

Nine Months Ended September 30,

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Net realized and unrealized investment gains losses

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Net realized and unrealized investment gains losses were $0.5 $14.1 million for the six three months ended June September 30, 2026, compared to net realized and unrealized investment losses of $20.3 $9.0 million for the six three months ended June September 30, 2025. For the six three months ended June September 30, 2026, net realized and unrealized investment gains losses were primarily due to $16.0 million of appreciation in the fair value of our equity securities. These net unrealized investment gains were partially offset by $11.3 $8.3 million of net realized investment losses from sales of fixed maturities and to a lesser extent, $4.3 $6.8 million related to impairment losses. of net depreciation in the fair value of our equity securities. For the six three months ended June September 30, 2025, net realized and unrealized investment losses were primarily due to $23.4 $20.3 million of net realized losses from sales of investments, primarily lower-yield fixed maturities, in consideration of expiring tax gains from 2022, partially offset by changes in the fair value of equity securities.

Net realized and unrealized investment gains losses were $2.8 $13.6 million for the three nine months ended June September 30, 2026, compared to net realized and unrealized investment losses of $2.5 $29.3 million for the three nine months ended June September 30, 2025. For the three nine months ended June September 30, 2026, net realized and unrealized investment gains losses were primarily due to $10.8 million of appreciation in the fair value of our equity securities. These net unrealized investment gains were partially offset by $5.7 $19.6 million of net realized investment losses from sales of fixed maturities and, to a lesser extent, $2.3 $4.1 million related to of impairment losses, primarily on fixed maturities. These net unrealized investment losses were partially offset by $9.2 million of net appreciation in the fair value of our equity securities. For the three nine months ended June September 30, 2025, net realized and unrealized investment losses were primarily due to $4.6 $43.7 million of net realized losses from sales of investments, primarily lower-yield fixed maturities, in consideration of expiring tax gains from 2022, and, to a lesser extent, from impairment losses on investments, partially offset by changes in the fair value of equity securities.

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Three Months Ended June September 30, 2026 Compared to Three Months Ended June September 30, 2025

The provision for income taxes from continuing operations was an expense of $53.2 $48.0 million and $41.9 $48.5 million for the three months ended June September 30, 2026 and 2025, respectively. These amounts resulted in consolidated effective tax rates of 21.7% 21.8% and 21.1% 21.4% on pre-tax income for the three months ended June September 30, 2026 and 2025, respectively. These provisions include net excess tax benefits primarily related to stock-based compensation, of $0.9 $0.8 million and $0.7 $0.3 million for the three months ended June September 30, 2026 and 2025, respectively, primarily related to stock-based compensation and tax planning strategies implemented in prior years. Absent net excess tax benefits, the provision for income taxes would have been an expense of $54.1 $48.8 million or 22.1%, for both the three months ended September 30, 2026 and $42.6 million, or 21.4%, 2025. The effective tax rate would have been 22.2% and 21.5% for the three months ended June September 30, 2026 and 2025, respectively. The increase in the effective tax rate for the three months ended June September 30, 2026 is primarily due to state income taxes.

The income tax provision on operating results was an expense of $52.6 $51.3 million and $42.6 $50.5 million for the three months ended June September 30, 2026 and 2025, respectively. These provisions resulted in effective tax rates on operating income of 21.8% 21.9% and 21.2% 21.4% for the three months ended June September 30, 2026 and 2025, respectively. These provisions reflect the aforementioned net excess tax benefits primarily related to stock-based compensation. Absent this item, net excess tax benefits, the provision for income taxes would have been an expense of $53.5 $51.8 million, or 22.1%, and $43.1 $50.6 million, or 21.4%, for the three months ended June September 30, 2026 and 2025, respectively. The increase in the effective tax rate for the three months ended June September 30, 2026 is primarily due to state income taxes.

Six Nine Months Ended June September 30, 2026 Compared to Six Nine Months Ended June September 30, 2025

The provision for income taxes from continuing operations was an expense of $103.5 $151.5 million and $73.8 $122.3 million for the six nine months ended June September 30, 2026 and 2025, respectively. These amounts resulted in consolidated effective tax rates of 21.5% 21.6% and 20.6% 20.9% on pre-tax income for the six nine months ended June September 30, 2026 and 2025, respectively. These provisions include net excess tax benefits primarily related to stock-based compensation, of $2.9 $3.7 million and $3.1 $3.5 million for the six nine months ended June September 30, 2026 and 2025, respectively, primarily related to stock-based compensation. Absent net excess tax benefits, the provision for income taxes would have been an expense of $106.4 $155.2 million, or 22.1%, and $76.9 $125.8 million, or 21.4%, 21.5%, for the six nine months ended June September 30, 2026 and 2025, respectively. The increase in the effective tax rate for the six nine months ended June September 30, 2026 is primarily due to state income taxes.

The income tax provision on operating results was an expense of $103.5 $154.8 million and $78.7 $129.2 million for the six nine months ended June September 30, 2026 and 2025, respectively. These provisions resulted in effective tax rates on operating income of 21.5% 21.6% and 20.8% 21.0% for the six nine months ended June September 30, 2026 and 2025, respectively. These provisions reflect the aforementioned net excess tax benefits primarily related to stock-based compensation. Absent this item, net excess tax benefits, the provision for income taxes would have been an expense of $106.3 $158.1 million, or 22.1%, and $81.2 $131.9 million, or 21.4%, for the six nine months ended June September 30, 2026 and 2025, respectively. The increase in the effective tax rate for the six nine months ended June September 30, 2026 is primarily due to state income taxes.

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The statutory capital and surplus for our insurance subsidiaries increased $203.0 $362.9 million during the first six nine months of 2026. This increase was primarily due to operating profits, partially offset by the payment of a $180.0 million dividend to its parent company.

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Liquidity is a measure of our ability to generate sufficient cash flows to meet the cash requirements of the business operations. As a holding company, our primary ongoing source of cash is dividends from our insurance subsidiaries. However, dividend payments to us by our insurance subsidiaries are subject to limitations imposed by regulators, such as prior notice periods and the requirement that dividends in excess of a specified percentage of statutory surplus or prior year s statutory earnings receive prior approval (so called extraordinary dividends ). During the first six nine months of 2026, Hanover Insurance provided dividends of $180.0 million to the holding company.

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Net cash provided by operating activities was $331.1 $850.9 million during the first six nine months of 2026, as compared to $245.5 $799.9 million during the first six nine months of 2025. The $85.6 $51.0 million increase in cash provided was primarily due to an increase in premiums received during the first six nine months of 2026 compared to the same period in 2025, partially offset by higher income tax, and loss and LAE payments.

Net cash used in investing activities was $600.0 $761.9 million during the first six nine months of 2026, as compared to $334.4 $642.6 million during the first six nine months of 2025. During the first six nine months of both 2026 and 2025, cash used in investing activities primarily related to net purchases of fixed maturities.

Net cash used in financing activities was $587.7 $705.5 million during the first six nine months of 2026, as compared to $102.8 net cash provided by financing activities of $324.8 million during the first six nine months of 2025. During the first six nine months of 2026, cash used by financing activities primarily resulted from the redemption of $375.0 million aggregate principal amount of 4.50% senior unsecured debentures, $141.9 $228.3 million of payments to repurchase shares of our common stock through the open market and, to a lesser extent, two three quarterly dividend payments to our shareholders. During the first six nine months of 2025, cash used in provided by financing activities primarily resulted from two the issuance of $500.0 million aggregate principal amount of 5.50% senior unsecured debentures. Net proceeds from this debt issuance were partially offset by three quarterly dividend payments to our shareholders and to a lesser extent, from repurchases of our common stock. through the open market.

Dividends to common shareholders are subject to quarterly board approval and declaration. During the first six nine months of 2026, we paid two three quarterly dividends to shareholders, each for $0.95 per share and totaling $66.6 $99.5 million. We believe that our holding company assets are sufficient to provide for future shareholder dividends should the Board of Directors declare them.

At June September 30, 2026, THG, as a holding company, held approximately $377.9 $243.0 million of fixed maturities and cash. We believe our holding company assets will be sufficient to meet our short-term obligations, which we expect to consist primarily of quarterly dividends to our shareholders (as and to the extent declared), redemptions of short-term debt, interest on our senior and subordinated debentures, and certain costs associated with benefits related to employees and agents of our former life insurance subsidiaries and corporate governance expenses. As discussed below, we have, and opportunistically may continue to, repurchase our common stock and debt. We do not expect that it will be necessary to dividend additional funds from our insurance subsidiaries in order to fund short-term holding company obligations; however, we may decide to do so.

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Our insurance subsidiaries maintain a high degree of liquidity within their respective investment portfolios in fixed maturity and short-term investments. Volatility and uncertainty in the financial markets continues continue to affect the value of investments currently held by THG and its subsidiaries, many of which remain in unrealized loss positions. We believe that the quality of the assets we hold will allow us to realize the long-term economic value of our portfolio, including the securities that are currently in an unrealized loss position. We do not anticipate the need to sell these securities to meet our insurance subsidiaries cash requirements since we expect our insurance subsidiaries to generate sufficient operating cash to meet all short-term and long-term cash requirements relating to current operations. However, unforeseen business needs or other items may occur, which could cause us to have to sell those securities in a loss position before their values fully recover, resulting in a recognition of impairment charges in that time period.

On May 13, 2026, the Board of Directors authorized a new stock repurchase program, which provides for aggregate repurchases of our common stock of up to $700 million, and terminated the existing program. Under the repurchase authorization, we may repurchase, from time to time, common stock in amounts, at prices and at such times as we deem appropriate, subject to market conditions and other considerations. Repurchases may be executed using open market purchases, privately negotiated transactions, accelerated repurchase programs, or other transactions. We are not required to purchase any specific number of shares or to make purchases by any certain date under this program. During the first six nine months of 2026, we repurchased approximately 0.8 1.2 million shares of which 0.2 0.6 million shares were under the new program and 0.6 million shares were under the prior program. Share repurchases totaled $142.9 $230.0 million during the first six nine months of 2026. Included in the cost of treasury stock acquired pursuant to common share repurchases is the 1% excise tax imposed on common share repurchase activity, net of common share issuances. As of June September 30, 2026, we had approximately $667 $581 million available for additional repurchases under this $700 million program.

We maintain our membership in the Federal Home Loan Bank ( FHLB ) to provide access to additional liquidity based on our holdings of FHLB stock and pledged collateral. At June September 30, 2026, we had borrowing capacity of $323.1 $298.9 million. There were no outstanding borrowings under this short-term facility at June September 30, 2026; however, we have borrowed and may continue to borrow, from time to time, through this facility to provide short-term liquidity.

On July 21, 2023, we entered into a credit agreement that provides for a five-year unsecured revolving credit facility not to exceed $150.0 million at any one time outstanding, with the option to increase the facility up to $300.0 million (assuming no default and satisfaction of other specified conditions, including the receipt of additional lender commitments). The agreement also includes an uncommitted subfacility of $50.0 million for standby letters of credit. Borrowings, if any, under this agreement are unsecured and incur interest at a rate per annum equal to, at our election, either (i) the greatest of, (a) the prime commercial lending rate of the administrative agent, (b) the NYFRB Rate plus half a percent, or (c) the one month Adjusted Term SOFR Rate plus one percent; each subject to a margin that ranges from 0.125% to 0.625% depending on our debt rating, or (ii) Adjusted SOFR Rate for the applicable interest period, plus a margin that ranges from 1.125% to 1.625% depending on our debt rating. The agreement also contains certain financial covenants such as maintenance of specified levels of consolidated equity and leverage ratios. During the first six nine months of 2026, we had no borrowings under this credit agreement.

At June September 30, 2026, we were in compliance with the covenants of our debt and credit arrangements.

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Market risk 2 changes

Our market risks, the ways we manage them, and sensitivity to changes in interest rates, and equity price risk are summarized in Management s Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2025, included in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in the first six months of 2026 to these risks or our management of them.

Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in the first nine months of 2026 to these risks or our management of them.

Controls and procedures 1 change

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Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting, as required by Rule 13a-15(d) of the Exchange Act, to determine whether any changes occurred during the period covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that there were no such changes during the quarter ended June September 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Risk factors 1 change

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operating difficulties and other unintended consequences from the introduction of new products, operational model transformation and redesign efforts, organizational changes, and related technology changes and applications, including the use of pricing models and AI, as well as new operating models, particularly as business processes become increasingly more digital;

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Unregistered sales of stock 4 changes

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Shares purchased in the second third quarter of 2026 are as follows:

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(2) In May 2026, the Board authorized a new share repurchase program totaling $700 million, terminating the previously authorized repurchase program.

September 1 - 30, 2026

(1) Includes 417 16,038 shares, 30 shares, and 12,887 180 shares withheld to satisfy tax withholding amounts due from employees related to the receipt of stock which resulted from the exercise or vesting of equity awards for the months ended April 30 and May July 31, August 31 and September 30, 2026, respectively.

Other information 2 changes

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On May 21, 2026 , Dennis F. Kerrigan , the Company s Executive Vice President, Chief Legal Officer and Corporate Secretary , adopted a trading plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). His 10b5-1 trading plan provides for the exercise, and subsequent sale, of options to purchase an aggregate of 8,655 shares of the Company s common stock. The options were granted in 2020. The 10b5-1 trading plan expires on May 19, 2027 , or upon an earlier date if and when all the options are exercised and sold. The amount of shares actually sold will depend on the satisfaction of certain conditions as set forth in his 10b5-1 trading plan.

No other officer During the three months ended September 30, 2026, none of the Company s directors or director officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted , modified , or terminated a contract, instruction or written plan for the purchase or sale of the Company s securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or a non-Rule 10b5-1 trading arrangement during (as such terms are defined in Item 408 of Regulation S-K of the second quarter ended June 30, 2026. Securities Act of 1933).

Exhibits 4 changes

The Hanover Insurance Group Retirement Savings Plan, as amended.

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The following materials from The Hanover Insurance Group, Inc. s Quarterly Report on Form 10-Q for the quarter ended June September 30, 2026 formatted in Inline eXtensible Business Reporting Language ( iXBRL ): (i) Consolidated Statements of Income for the three and six nine months ended June September 30, 2026 and 2025; (ii) Consolidated Statements of Comprehensive Income (Loss) for the three and six nine months ended June September 30, 2026 and 2025; (iii) Consolidated Balance Sheets at June September 30, 2026 and December 31, 2025; (iv) Consolidated Statements of Shareholders Equity for the three and six nine months ended June September 30, 2026 and 2025; (v) Consolidated Statements of Cash Flows for the six nine months ended June September 30, 2026 and 2025, and (vi) related notes to these financial statements.

The cover page from The Hanover Insurance Group Inc. s Quarterly Report on Form 10-Q for the quarter ended June September 30, 2026, formatted in iXBRL (embedded within EX 101).

+ Management contract or compensatory plan or arrangement.

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