AM Best Affirms Credit Ratings of The Hanover Insurance Group, Inc. and Its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of the property/casualty subsidiaries of The Hanover Insurance Group, Inc. (THG) [NYSE: THG], which are collectively referred to as The Hanover or the group. Additionally, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and all Long-Term Issue Credit Ratings (Long-Term IR) of THG, which is the parent holding company. The outlook of these Credit Ratings (ratings) is stable. All above named companies are headquartered in Worcester, MA. (See below for a detailed listing of the companies and ratings.)

The ratings reflect The Hanover’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The assessment of the group’s balance sheet strength is based on its risk-adjusted capitalization that is also at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The assessment of the group’s balance sheet strength also reflects its stable loss reserve position, comprehensive reinsurance program and the benefits from the additional financial flexibility available through its ultimate parent, THG. Additionally, the ratings of The Hanover reflect the group’s significant improvement in underwriting profitability over the past five years. In addition, the ratings reflect the group’s sound business profile and diversified product offerings, especially within its commercial and specialty lines of business. The group’s business profile assessment reflects its strong market position, as it ranks among the top 25 U.S. property/casualty organizations and holds a leading position in many of its targeted market niches, along with its experienced management team. The group’s product range includes personal lines, core commercial offerings and specialty coverages, with business expansion supported by strong relationships with its independent agency partners. The Hanover has implemented an appropriately designed and embedded ERM program to address the organization’s risks. A formal framework is in place, and the continual evaluation and monitoring of key risks and tolerances is well-established.