HANOVER INSURANCE GROUP, INC.

Previous wording

The following discussion contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may address, among other things, our growth strategy; expected developments in our business, including losses and loss reserves; the impact of our routine reserve reviews; our expectations regarding our investment activities or results; our proposed actions in response to trends in our business; as well as our expectations, intentions and other statements that are not historical facts. Words such as: “believes,” “anticipates,” “expects,” “projections,” “outlook,” “should,” “could,” “plan,” “guidance,” “likely,” “on track to,” “potential,” “continue,” “targeted,” “designed,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. We caution readers that accuracy with respect to forward-looking projections is difficult and subject to risks and uncertainties. Those risks and uncertainties, in some cases, have affected, and in the future could affect, our actual results and could cause our actual results to differ materially from historical results and from those expressed in any of our forward-looking statements. In addition to some of the factors in the discussion below, other important factors that could cause actual results to differ materially from those contained in forward-looking statements, are set forth in “Risk Factors” in Part II – Item 1A of this Quarterly Report on Form 10-Q and in Part I – Item 1A of our 2025 Annual Report on Form 10-K.

Current wording

The following discussion contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may address, among other things, our growth strategy; expected developments in our business, including losses and loss reserves; the impact of our routine reserve reviews; our expectations regarding our investment activities or results; our proposed actions in response to trends in our business; as well as our expectations, intentions and other statements that are not historical facts. Words such as: “believes,” “anticipates,” “expects,” “may,” “projections,” “outlook,” “intends,” “should,” “could,” “will,” “plan,” “goal,” “guidance,” “likely,” “on track to,” “potential,” “continue,” “targeted,” “designed,” “positioned,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. We caution readers that accuracy with respect to forward-looking projections is difficult and subject to risks and uncertainties. Those risks and uncertainties, in some cases, have affected, and in the future could affect, our actual results and could cause our actual results to differ materially from historical results and from those expressed in any of our forward-looking statements. In addition to some of the factors in the discussion below, other important factors that could cause actual results to differ materially from those contained in forward-looking statements, are set forth in “Risk Factors” in Part II – Item 1A of this Quarterly Report on Form 10-Q and in Part I – Item 1A of our 2025 Annual Report on Form 10-K.

Previous wording

During the three months ended March 31, 2026, our net income was $186.8 million, compared to $128.2 million for the three months ended March 31, 2025, an improvement of $58.6 million. This favorable change was primarily due to higher after-tax operating income.

Current wording

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

Previous wording

Operating income before interest expense and income taxes (a non-GAAP financial measure; see also “Results of Operations – Consolidated – Non-GAAP Financial Measures”) was $250.2 million for the three months ended March 31, 2026, compared to $186.4 million for the three months ended March 31, 2025, an improvement of $63.8 million. This increase was primarily due to improvements in current accident year underwriting results and higher net investment income.

Current wording

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 million for the six months ended June 30, 2026, compared to $396.3 million for the six months ended June 30, 2025, an improvement of $105.8 million. This increase was primarily due to improvements in current accident year losses, principally in Personal Lines, higher net investment income, earned premium growth and lower catastrophe losses.

Previous wording

Pre-tax catastrophe losses were $98.9 million for the three months ended March 31, 2026, compared to $95.6 million during the same period of 2025, an increase of $3.3 million. The catastrophe losses in the first three months of 2026 were primarily due to severe convective storms and severe winter storms across multiple states. Included in pre-tax catastrophe losses were $48.8 million and $12.0 million for the three months ended March 31, 2026 and 2025, respectively, of favorable prior year catastrophe reserve development. The favorable development in the first quarter of 2026 largely related to 2025 catastrophe events. Net favorable development on prior years’ non-catastrophe loss reserves was $25.0 million for the three months ended March 31, 2026, compared to $20.0 million for the three months ended March 31, 2025, an increase of $5.0 million.

Current wording

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

Previous wording

Net premiums written increased 4.3% in the first three months of 2026, compared to the same period in 2025, primarily due to renewal price increases. Operating income before interest expense and income taxes increased in the first three months of 2026, compared to the same period in 2025, primarily due to lower current accident year losses, lower catastrophe losses and higher net investment income. 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.

Current wording

Net premiums written increased 5.7% in the first six 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 months of 2026, compared to the same period in 2025, primarily due to higher net investment income, improvements in current accident year underwriting results and lower 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.

Previous wording

Net premiums written increased 2.3% in the first three 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. Operating income before interest expense and income taxes increased in the first three months of 2026 compared to the same period in 2025, primarily due to lower current accident year losses, lower catastrophe losses and higher net investment income. 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.

Current wording

Net premiums written increased 3.4% in the first six months of 2026, compared to the same period in 2025, primarily due to an increase in new business volume and, to a lesser extent, renewal price increases. Operating income before interest expense and income taxes increased in the first six months of 2026 compared to the same period in 2025, primarily due to lower catastrophe losses and higher net investment income. 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.

Previous wording

Net premiums written increased 2.7% in the first three months of 2026, compared to the same period in 2025, primarily due to higher new business volume. Operating income before interest expense and income taxes decreased slightly in the first three months of 2026, compared to the same period in 2025, primarily due to higher catastrophe losses, partially offset by lower current accident year losses, higher favorable development on prior year reserves and higher net investment income.

Current wording

Net premiums written increased 2.7% in the first six 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 months of 2026, compared to the same period in 2025, primarily due to improvement in current accident year underwriting results and higher favorable development on prior year reserves.

Previous wording

Net premiums written increased $48.9 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in net premiums written was due to renewal price increases and an increase in new business volume.

Current wording

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

Previous wording

Core Commercial net premiums written were $630.4 million for the three months ended March 31, 2026, compared to $604.6 million for the three months ended March 31, 2025. The $25.8 million increase in net premiums written was primarily driven by renewal price increases.

Current wording

Core Commercial net premiums written were $574.8 million for the three months ended June 30, 2026, compared to $536.0 million for the three months ended June 30, 2025. The $38.8 million increase in net premiums written was primarily driven by renewal price increases and, to a lesser extent, an increase in new business volume.

Previous wording

Net premiums written in the personal automobile line of business were $327.2 million for the three months ended March 31, 2026, compared to $323.8 million for the three months ended March 31, 2025, an increase of $3.4 million. Personal automobile PIF decreased by 2.2% since March 31, 2025. Net premiums written in the homeowners and other lines of business for the three months ended March 31, 2026 were $235.4 million, compared to $224.1 million for the three months ended March 31, 2025, an increase of $11.3 million. Homeowners PIF decreased by 2.2% since March 31, 2025.

Current wording

Net premiums written in the personal automobile line of business were $390.7 million for the three months ended June 30, 2026, compared to $389.3 million for the three months ended June 30, 2025, an increase of $1.4 million. Personal automobile PIF decreased by 1.5% since June 30, 2025. Net premiums written in the homeowners and other lines of business for the three months ended June 30, 2026 were $306.9 million, compared to $290.3 million for the three months ended June 30, 2025, an increase of $16.6 million. Homeowners PIF decreased by 1.6% since June 30, 2025.

Previous wording

Personal Lines underwriting profit for the three months ended March 31, 2026 was $52.3 million, compared to $61.7 million for the three months ended March 31, 2025, a decrease in underwriting results of $9.4 million. Catastrophe losses for the three months ended March 31, 2026 were $58.9 million, compared to an unusually low $34.9 million for the three months ended March 31, 2025, an increase of $24.0 million. Net favorable development on prior years’ loss reserves for the three months ended March 31, 2026 was $9.2 million, compared to $2.8 million for the three months ended March 31, 2025, an increase of $6.4 million.

Current wording

Personal Lines underwriting profit for the three months ended June 30, 2026 was $69.4 million, compared to $25.2 million for the three months ended June 30, 2025, an increase of $44.2 million. Catastrophe losses for the three months ended June 30, 2026 were $55.4 million, compared to $70.2 million for the three months ended June 30, 2025, a decrease of $14.8 million. Net favorable development on prior years’ loss reserves for the three months ended June 30, 2026 was $10.1 million, compared to $2.6 million for the three months ended June 30, 2025, an increase of $7.5 million.

Previous wording

Personal Lines current accident year underwriting profit, excluding catastrophes, was $102.0 million for the three months ended March 31, 2026, compared to $93.8 million for the three months ended March 31, 2025. The $8.2 million increase in underwriting results was primarily due to lower current accident year losses in our homeowners and other personal lines.

Current wording

Personal Lines current accident year underwriting profit, excluding catastrophes, was $114.7 million for the three months ended June 30, 2026, compared to $92.8 million for the three months ended June 30, 2025. This $21.9 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.

Previous wording

We obtained pricing increases of approximately 11% in our homeowners line and approximately 7% in our personal automobile line during the first quarter of 2026 and believe that our ability to obtain a similar level of pricing increases will continue. Consistent with our expectations, PIF was largely unchanged compared to the end of 2025, but declined as compared to the first three months of 2025, driven by lower policies available to renew year over year from prior margin recapture actions taken. Additionally, our Personal Lines net premiums written may be affected by price competition and the regulatory and overall macroeconomic environment. These factors may also affect our ability to maintain and improve underwriting results.

Current wording

We obtained renewal pricing increases of approximately 11% in our homeowners line and approximately 7% in our personal automobile line during the second quarter of 2026. Consistent with our expectations, PIF was down slightly compared to the end of 2025, and declined as compared to the first six months of 2025, driven by lower policies available to renew year over year from prior margin recapture actions taken. Additionally, our Personal Lines net premiums written may be affected by price competition and the regulatory and overall macroeconomic environment. These factors may also affect our ability to maintain and improve underwriting results.

Previous wording

Our Other segment had operating profit of $2.2 million for the three months ended March 31, 2026, compared to $0.8 million for the three months ended March 31, 2025, an increase of $1.4 million, due to higher net investment income.

Current wording

Our Other segment had operating profit of $1.1 million for the three months ended June 30, 2026, compared to an operating loss of $2.6 million for the three months ended June 30, 2025, an increase of $3.7 million, due to lower expenses.

Previous wording

Core Commercial current accident year underwriting profit, excluding catastrophes, was $46.6 million for the three months ended March 31, 2026, compared to $24.7 million for the three months ended March 31, 2025. This increase was primarily driven by lower current accident year large property losses in our commercial multiple peril line of business.

Current wording

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

Previous wording

It is not possible to know whether the factors that affected loss reserves in the first three 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.

Current wording

It is not possible to know whether the factors that affected loss reserves in the first six 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.

Previous wording

For the three months ended March 31, 2026, favorable catastrophe loss development was $48.8 million, primarily due to lower than expected losses related to several convective storms across multiple states from accident years 2025 and 2024, including lower than expected large commercial multiple peril losses in Core Commercial and lower than expected homeowners severity in Personal Lines. In 2025, favorable catastrophe development was $12.0 million, primarily due to lower than expected losses in our commercial multiple peril line related to events from accident years 2021 though 2023, including several convective storms across multiple states, and Winter Storm Elliot.

Current wording

For the six months ended June 30, 2026, favorable catastrophe loss development was $61.7 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.

Previous wording

For the three months ended March 31, 2026, net favorable loss and LAE development, excluding catastrophes, was $25.0 million. Specialty favorable loss and LAE development of $14.2 million was primarily due to lower than expected losses in our Marine and Industrial Property division, driven by our inland marine coverage, our E&S and Alternative Markets division, and, to a lesser extent, our Surety and Other division. Within Personal Lines, lower than expected losses of $9.2 million were driven primarily by homeowners property coverages.

Current wording

For the six months ended June 30, 2026, net favorable loss and LAE development, excluding catastrophes, was $46.5 million. Specialty favorable loss and LAE development of $25.0 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 million was primarily due to lower than expected losses in our homeowners property coverages.

Previous wording

For the three months ended March 31, 2025, net favorable loss and LAE development, excluding catastrophes, was $20.0 million. Specialty favorable loss and LAE development of $15.9 million was primarily due to lower than expected losses in our Marine and Industrial Property division and, to a lesser extent, in our Professional and Executive Lines division. Within Core Commercial, lower than expected losses in our workers’ compensation line were largely offset by higher than expected losses in our commercial automobile line.

Current wording

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

Previous wording

As of March 31, 2026, we had $9.8 million of net asbestos and environmental reserves, comprised of $8.1 million of direct reserves and $1.7 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.

Current wording

As of June 30, 2026, we had $11.2 million of net asbestos and environmental reserves, comprised of $9.5 million of direct reserves and $1.7 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.

Previous wording

Reinsurance recoverables were $2,051.7 million and $2,011.1 million at March 31, 2026 and December 31, 2025, respectively, of which $65.1 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 $34.4 million and $30.5 million at March 31, 2026 and December 31, 2025, respectively, and billable non-MCCA reinsurance recoverables totaled $30.7 million and $32.1 million at March 31, 2026 and December 31, 2025, respectively. Billed balances outstanding greater than 90 days at March 31, 2026 and December 31, 2025 were not material.

Current wording

Reinsurance recoverables were $2,078.9 million and $2,011.1 million at June 30, 2026 and December 31, 2025, respectively, of which $83.0 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 million and $30.5 million at June 30, 2026 and December 31, 2025, respectively, and billable non-MCCA reinsurance recoverables totaled $49.1 million and $32.1 million at June 30, 2026 and December 31, 2025, respectively. Billed balances outstanding greater than 90 days at June 30, 2026 and December 31, 2025 were not material.

Previous wording

The increase in net investment income for the three months ended March 31, 2026 was primarily due to the continued investment of operational cashflows, the impact of reinvesting at higher interest rates, and higher partnership income. Income from partnerships can vary significantly from period to period based on the performance in the underlying portfolios.

Current wording

The increase in net investment income for the three and six months ended June 30, 2026 was primarily due to the continued investment of operational cashflows and the impact of reinvesting at higher interest rates in the fixed maturity portfolio.

Previous wording

Total cash and investments decreased $460.2 million, or 4.0%, for the three months ended March 31, 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 and common stock repurchases, and, to a lesser extent, net market value depreciation. These decreases were partially offset by the continued investment of cashflows from operations.

Current wording

Total cash and investments decreased $337.3 million, or 2.9%, for the six months ended June 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.

Previous wording

The change in net unrealized losses on fixed maturities was primarily driven by higher interest rates and, to a lesser extent, changes in credit spreads.

Current wording

The change in net unrealized losses on fixed maturities was primarily driven by higher interest rates.

Previous wording

For the three months ended March 31, 2026, we recognized impairment losses of $2.0 million, consisting of $1.5 million on mortgage loans and $0.5 million on fixed maturities. For the three months ended March 31, 2025, impairment losses were not significant.

Current wording

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.

Previous wording

At March 31, 2026 and December 31, 2025, the allowance for credit losses on mortgage loans was $8.5 million and $8.1 million, respectively. At March 31, 2026 and December 31, 2025, the allowance for credit losses on available-for-sale debt securities was not material.

Current wording

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

Previous wording

At March 31, 2026, fixed maturity securities on non-accrual status were not material and we held no fixed maturities 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 were not material for the periods ended March 31, 2026 and December 31, 2025. Any defaults in the fixed maturities or mortgage loan portfolios in future periods may negatively affect investment income.

Current wording

The carrying value of fixed maturity securities on non-accrual status at June 30, 2026 was $2.1 million. The carrying value of mortgage loans on non-accrual status at June 30, 2026 was $7.1 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 for the periods ended June 30, 2026 and December 31, 2025. Any defaults in the fixed maturities or mortgage loan portfolios in future periods may negatively affect investment income.

Previous wording

Gross unrealized losses on fixed maturities at March 31, 2026 were $298.5 million, an increase of $31.3 million compared to December 31, 2025. This increase was primarily due to higher interest rates and, to a lesser extent, changes in credit spreads. At March 31, 2026, gross unrealized losses consisted primarily of $85.6 million on residential mortgage-backed securities, $74.9 million on corporate fixed maturities, $68.5 million on municipals, and $40.4 million on U.S. government securities. See Note 3 – “Investments” in the Notes to Interim Consolidated Financial Statements.

Current wording

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

Previous wording

The U.S. economy continued to expand at a solid pace during the first quarter of 2026, reflecting a stable labor market despite continued, elevated inflation. The Federal Reserve maintained the federal funds target at a range of 3.50% to 3.75%. Heightened geopolitical risks continue to impact economic uncertainty, the extent of which is unknown. These risks, among others, may increase the likelihood of 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 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 portfolio could change in ways we cannot currently anticipate, and we could incur additional realized and unrealized losses in future periods.

Current wording

The U.S. economy continued to expand at a solid pace during the second quarter of 2026, reflecting a stable labor market despite continued, elevated inflation. The Federal Reserve maintained the federal funds target at a range of 3.50% to 3.75%. Heightened geopolitical risks continue to impact economic uncertainty, the extent of which is unknown. These risks, among others, may increase the likelihood of 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 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 portfolio could change in ways we cannot currently anticipate, and we could incur additional realized and unrealized losses in future periods.

Previous wording

Net realized and unrealized investment losses were $2.3 million for the three months ended March 31, 2026, compared to $17.8 million for the three months ended March 31, 2025. For the three months ended March 31, 2026, net realized and unrealized investment losses were primarily due to $5.6 million of net realized investment losses from sales of fixed maturities and, to a lesser extent, $2.0 million related to impairment losses. These net realized investment losses were partially offset by net realized and unrealized investment gains of $5.2 million due to changes in the fair value of equity securities. For the three months ended March 31, 2025, net realized and unrealized investment losses were primarily due to $18.8 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.

Current wording

Net realized and unrealized investment gains were $2.8 million for the three months ended June 30, 2026, compared to net realized and unrealized investment losses of $2.5 million for the three months ended June 30, 2025. For the three months ended June 30, 2026, net realized and unrealized investment gains 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 million of net realized investment losses from sales of fixed maturities and, to a lesser extent, $2.3 million related to impairment losses. For the three months ended June 30, 2025, net realized and unrealized investment losses were primarily due to $4.6 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.

Previous wording

The provision for income taxes from continuing operations was an expense of $50.3 million and $31.9 million for the three months ended March 31, 2026 and 2025, respectively. These amounts resulted in consolidated effective tax rates of 21.2% and 19.9% on pre-tax income for the three months ended March 31, 2026 and 2025, respectively. These provisions include excess tax benefits, primarily related to stock-based compensation, of $1.9 million and $2.1 million for the three months ended March 31, 2026 and 2025, respectively. Absent excess tax benefits, the provision for income taxes would have been an expense of $52.3 million, or 22.1%, and $34.4 million, or 21.5%, for the three months ended March 31, 2026 and 2025, respectively. The increase in the effective tax rate for the three months ended March 31, 2026 is primarily due to state income taxes.

Current wording

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

Previous wording

The income tax provision on operating results was an expense of $50.9 million and $36.1 million for the three months ended March 31, 2026 and 2025, respectively. These provisions resulted in effective tax rates on operating income of 21.3% and 20.3% for the three months ended March 31, 2026 and 2025, respectively. These provisions reflect the aforementioned excess tax benefits related to stock-based compensation. Absent this item, the provision for income taxes would have been an expense of $52.8 million, or 22.1%, and $38.2 million, or 21.5%, for the three months ended March 31, 2026 and 2025, respectively. The increase in the effective tax rate for the three months ended March 31, 2026 is primarily due to state income taxes.

Current wording

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

Previous wording

The statutory capital and surplus for our insurance subsidiaries increased $197.2 million during the first three months of 2026. This increase was primarily due to operating profits.

Current wording

The statutory capital and surplus for our insurance subsidiaries increased $203.0 million during the first six 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.

Previous wording

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 three months of 2026, Hanover Insurance did not provide dividends to the holding company.

Current wording

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 months of 2026, Hanover Insurance provided dividends of $180.0 million to the holding company.

Previous wording

Net cash provided by operating activities was $118.8 million during the first three months of 2026, as compared to $38.9 million during the first three months of 2025. The $79.9 million increase in cash provided was primarily due to an increase in premiums received and lower loss and LAE payments during the first three months of 2026 compared to the same period in 2025.

Current wording

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

Previous wording

Net cash used in investing activities was $493.8 million during the first three months of 2026, as compared to $112.3 million during the first three months of 2025. During the first three months of both 2026 and 2025, cash used in investing activities primarily related to net purchases of fixed maturities.

Current wording

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

Previous wording

Net cash used in financing activities was $504.6 million during the first three months of 2026, as compared to $47.5 million during the first three months of 2025. During the first three 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 and, to a lesser extent, repurchases of common stock through the open market and a quarterly dividend payment to our shareholders. During the first three months of 2025, cash used in financing activities primarily resulted from a quarterly dividend payment to our shareholders and, to a lesser extent, from repurchases of common stock through the open market.

Current wording

Net cash used in financing activities was $587.7 million during the first six months of 2026, as compared to $102.8 million during the first six months of 2025. During the first six 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 million of payments to repurchase shares of our common stock through the open market and, to a lesser extent, two quarterly dividend payments to our shareholders. During the first six months of 2025, cash used in financing activities primarily resulted from two quarterly dividend payments to our shareholders and, to a lesser extent, from repurchases of our common stock through the open market.

Previous wording

Dividends to common shareholders are subject to quarterly board approval and declaration. During the first three months of 2026, we paid a quarterly dividend of $0.95 per share totaling $33.5 million. We believe that our holding company assets are sufficient to provide for future shareholder dividends should the Board of Directors declare them.

Current wording

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

Previous wording

At March 31, 2026, THG, as a holding company, held approximately $256.9 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. 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.

Current wording

At June 30, 2026, THG, as a holding company, held approximately $377.9 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. 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.

Previous wording

The Board of Directors authorized a stock repurchase program which provides for aggregate repurchases of our common stock of up to $1.3 billion. 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 three months of 2026, we repurchased approximately 0.5 million shares, at an aggregate cost of $87.5 million. 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 part of the Inflation Reduction Act of 2022. As of March 31, 2026, we had repurchased approximately 9.3 million shares under this $1.3 billion program and had approximately $86 million available for additional repurchases.

Current wording

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 months of 2026, we repurchased approximately 0.8 million shares of which 0.2 million shares were under the new program and 0.6 million shares were under the prior program. Share repurchases totaled $142.9 million during the first six 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 30, 2026, we had approximately $667 million available for additional repurchases under this $700 million program.