Property and casualty insurer The Hanover Insurance Group (NYSE: THG) missed Wall Street’s revenue expectations in Q1 CY2026 as sales rose 5% year on year to $1.70 billion. Its non-GAAP profit of $5.25 per share was 24.5% above analysts’ consensus estimates.
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The Hanover Insurance Group (THG) Q1 CY2026 Highlights:
- Net Premiums Earned: $1.57 billion vs analyst estimates of $1.59 billion (4.1% year-on-year growth, 1.4% miss)
- Revenue: $1.70 billion vs analyst estimates of $1.72 billion (5% year-on-year growth, 1.2% miss)
- Combined Ratio: 91.5% vs analyst estimates of 94.8% (335 basis point beat)
- Adjusted EPS: $5.25 vs analyst estimates of $4.22 (24.5% beat)
- Book Value per Share: $101.86 vs analyst estimates of $108.20 (20.4% year-on-year growth, 5.9% miss)
- Market Capitalization: $6.36 billion
"We delivered excellent first quarter results, with an operating return on equity of over 20% while generating balanced top‑line growth and building for the future," said John C. Roche, president and chief executive officer at The Hanover.
Company Overview
Founded in 1852 during a time when fire insurance was crucial for protecting businesses and homes, The Hanover Insurance Group (NYSE: THG) provides property and casualty insurance products through independent agents, serving individuals, small businesses, and mid-sized companies.
Revenue Growth
Big picture, insurers generate revenue from three key sources. The first is the core business of underwriting policies. The second source is income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from various sources such as policy administration, annuities, or other value-added services. Over the last five years, The Hanover Insurance Group grew its revenue at a mediocre 6.7% compounded annual growth rate. This fell short of our benchmark for the insurance sector and is a rough starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. The Hanover Insurance Group’s recent performance shows its demand has slowed as its annualized revenue growth of 4.9% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, The Hanover Insurance Group’s revenue grew by 5% year on year to $1.70 billion, falling short of Wall Street’s estimates.
Net premiums earned made up 93.5% of the company’s total revenue during the last five years, meaning The Hanover Insurance Group lives and dies by its underwriting activities because non-insurance operations barely move the needle.
Net premiums earned commands greater market attention due to its reliability and consistency, whereas investment and fee income are often seen as more volatile revenue streams that fluctuate with market conditions.
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Book Value Per Share (BVPS)
Insurance companies are balance sheet businesses, collecting premiums upfront and paying out claims over time. The float – premiums collected but not yet paid out – are invested, creating an asset base supported by a liability structure. Book value captures this dynamic by measuring:
- Assets (investment portfolio, cash, reinsurance recoverables) - liabilities (claim reserves, debt, future policy benefits)
BVPS is essentially the residual value for shareholders.
We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality. While other (and more commonly known) per-share metrics like EPS can sometimes be lumpy due to reserve releases or one-time items and can be managed or skewed while still following accounting rules, BVPS reflects long-term capital growth and is harder to manipulate.
The Hanover Insurance Group’s BVPS grew at a sluggish 3.9% annual clip over the last five years. However, BVPS growth has accelerated recently, growing by 20.4% annually over the last two years from $70.27 to $101.86 per share.
Over the next 12 months, Consensus estimates call for The Hanover Insurance Group’s BVPS to grow by 30.5% to $108.20, elite growth rate.
Key Takeaways from The Hanover Insurance Group’s Q1 Results
It was good to see The Hanover Insurance Group beat analysts’ EPS expectations this quarter. On the other hand, its book value per share missed and its net premiums earned fell slightly short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock remained flat at $177.61 immediately after reporting.
So do we think The Hanover Insurance Group is an attractive buy at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
