HANOVER INSURANCE GROUP, INC.

Taxes

We file a consolidated U.S. federal income tax return that includes our holding company and its domestic subsidiaries (including non-insurance operations).

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

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.

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.