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Safe harbor statement

Forward-looking statements

Certain statements on this website and in the respective documents posted herein may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as, but not limited to, “believes,” “anticipates,” “expects,” “projects,” “forecasts,” “potential,” “should,” “could,” “continue,” “outlook,” “guidance,” and other similar expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. The Company cautions investors that any such forward-looking statements are estimates, beliefs, expectations and/or projections that involve significant judgement, and that historical results, trends and forward-looking statements are not guarantees and are not necessarily indicative of future performance. Actual results could differ materially from those anticipated.

These statements include, but are not limited to, the Company’s statements regarding:

  • The Company’s outlook and its ability to achieve components or the sum of the respective period guidance on its future results of operations including: the combined ratio, excluding or including both prior-year reserve development and/or catastrophe losses; catastrophe losses; net investment income; growth of net premiums written and/or net premiums earned in total or by line of business; expense ratio; operating return on equity; and/or the effective tax rate;
  • Uses of capital for share repurchases, special or ordinary cash dividends, business investments or growth, or otherwise, and outstanding shares in future periods as a result of various share repurchase mechanisms, and overall comfort with capital levels;
  • Variability of catastrophe losses due to risk concentrations, changes in weather patterns including global warming, terrorism or other events, as well as the complexity in estimating losses from large catastrophe events due to delayed reporting of the existence, nature or extent of losses or where “demand surge,” regulatory assessments, litigation, coverage and technical complexities or other factors may significantly impact the ultimate amount of such losses;
  • Current accident year losses and loss selections (“picks”), excluding catastrophes, and prior accident year loss reserve development patterns, particularly in complex “longer tail” liability lines, as well as the inherent variability in property and non-catastrophe weather losses;
  • The confidence or concern that the current level of reserves is adequate and/or sufficient for future claim payments, whether due to losses that have been incurred but not reported, circumstances that delay the reporting of losses, business complexity, adverse judgments or developments with respect to case reserves, the difficulties and uncertainties inherent in projecting future losses from historical data, changes in replacement and medical costs, or other factors;
  • Characterization of some business as being “more profitable” in light of inherent uncertainty of ultimate losses incurred, especially for “longer tail” businesses;
  • Efforts to manage expenses, including the Company’s long-term expense savings targets, while allocating capital to business investment, which is at management’s discretion;
  • Mix improvement, underwriting initiatives, coverage restrictions and pricing segmentation actions, among others, to grow businesses believed to be more profitable or reduce premiums attributable to products believed to be less profitable; balance rate actions and retention; offset long-term and/or short-term loss trends due to increased frequency; increased “social inflation” from a more litigious environment and higher average cost of resolution, increased property replacement costs, and/or social movements;
  • The ability to generate growth in targeted segments through new agency appointments; rate increases (as a result of its market position, agency relationships or otherwise), retention improvements or new business; expansion into new geographies; new product introductions; or otherwise; and
  • Investment returns and the effect of macro-economic interest rate trends and geopolitical circumstances on new money yields and overall investment returns.

Additional Risks and Uncertainties

Investors are further cautioned and should consider the risks and uncertainties in the Company’s business that may affect such estimates and the Company’s future performance that are discussed in the Company’s most recently filed reports on Form 10-K and Form 10-Q, and other documents filed by The Hanover Insurance Group, Inc. with the Securities and Exchange Commission (“SEC”) and that are also available at www.hanover.com under “Investors.” These risks and uncertainties include, but are not limited to:

  • Adverse claims experience, including those driven by large or increased frequency of catastrophe events (including terrorism) and severe weather;
  • The uncertainty in estimating weather-related losses, and the limitations and assumptions used to model other property and casualty losses (particularly with respect to products with longer tails [such as casualty and bodily injury claims] or involving emerging issues related to losses incurred as the result of new lines of business, such as cyber or financial institutions coverage, or reinsurance contracts and reinsurance recoverables), leading to potential adverse development of loss and loss adjustment expense reserves;
  • Litigation and the possibility of adverse judicial decisions, including those which expand policy coverage beyond its intended scope or award “bad faith” or other non-contractual damages, and the impact of “social inflation” affecting judicial awards and settlements;
  • The ability to increase or maintain insurance rates in line with anticipated loss costs as a result of competition and respective state’s department of insurance mandates to either raise or lower rates;
  • Investment impairments, which may be affected by, among other things, the Company’s ability and willingness to hold investment assets until they recover in value, as well as credit and interest rate risk and general financial and economic conditions;
  • Disruption of the independent agency channel, including the impact of competition and consolidation in the industry and among agents and brokers;
  • Competition, particularly from competitors who have resource and capability advantages;
  • The global macroeconomic environment, including inflation, global trade wars and interest rate fluctuations, which, among other things, could result in reductions in market values of fixed maturity and other investments;
  • Adverse state and federal regulation, legislative and/or regulatory actions (including recent significant revisions to Michigan’s automobile personal injury protection system and related litigation);
  • Financial ratings actions, in particular downgrades to our ratings;
  • Operational and technology risks and evolving technological and product innovation, including the risk of cyber-security attacks or breaches on the Company’s systems or resulting in claim payments (including from products not intended to provide cyber coverage);
  • Uncertainties in estimating indemnification liabilities recorded in conjunction with obligations undertaken in connection with the sale of various businesses and discontinued operations; and
  • The ability to collect from reinsurers, reinsurance pricing, and the performance of the discontinued voluntary pools business (including those in the Other segment or in Discontinued Operations).

Please see the Company’s most recent earnings release for a more comprehensive list of Forward-Looking Statements and Additional Risks and Uncertainties, which are readily available on this website, under Quarterly Results.

Non-GAAP financial measures

As discussed in the Company’s most recent Annual Report on Form 10-K, the Company uses non-GAAP financial measures as important measures of its operating performance, including, but not limited to, combined and loss ratios excluding catastrophe losses and/or prior year reserve development, operating income per share, operating Return on Equity (“ROE”) and, prior to 2020, adjusted Operating ROE. Management believes these non-GAAP financial measures are important indications of the Company’s operating performance. These financial measures should not be construed as substitutes for their most directly comparable GAAP financial measure, and a reconciliation of these non-GAAP financial measures can be found in the Company’s fourth quarter 2019 earnings release on Form 8-K, dated February 5, 2020.