Thursday, The Hanover Insurance Group Inc. (THG), an insurance holding company, posted second quarter earnings, compared to a loss last year, largely helped by gains from debt restructuring and net realized investments gains.
Net income for the quarter was $64.4 million or $1.25 per share compared to a net loss of $10.2 million or $0.20 per share in the same period last year.
Net income for the most recent quarter included an after-tax gain of $22.3 million or $0.43 per share, from the company's debt restructuring. Net loss for the prior year period included an estimated after-tax loss of $66.1 million, or $1.27 per share, related to the then-pending sale of the company's run-off life insurance subsidiary, partially offset by a gain of $11.1 million, or $0.21 per share, related to the sale of its finance subsidiary.
Total segment income after tax declined to $44 million or $0.86 per share from $55 million or $1.07 per share in the prior year period. On average, six analysts polled by Thomson Reuters expected the company to report earnings of $1.03 per share for the quarter.
Total Property and Casualty pre-tax segment income declined to $76.3 million from $94.2 million in the same period last year. Results for the quarter included pre-tax catastrophe losses of $27.4 million, compared to $38.1 million pre-tax in the prior-year quarter.
Personal Lines segment income declined to $25.6 million from $38.6 million in the year-ago quarter. The company attributed the year-over-year decline primarily to higher non-catastrophe weather-related property losses, lower net investment income and increased pension costs.
Commercial Lines income declined to $50.9 million from $52.7 million in the same period last year. The year-over-year decline in earnings is primarily the result of higher expenses and less favorable current accident year results, partially offset by more favorable prior year loss and LAE reserve development and lower catastrophe losses
Net realized investment gains were $19.1 million compared with a loss of $7.6 million in the year-ago period.
Net premiums written were $663.1 million, up 3.5% from the same period of the previous year.Combined ratio increased to 96.4% from 94.8% in the prior year period. The company held $4.9 billion in cash and investment assets at June 30, 2009.
THG rose $0.09 or 0.23% and closed Thursday's regular trading at $39.92.
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