THG 2018 Annual Report

Workers' compensation (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2018 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2009 2010 2011 2012 2013 2014 2015 Claim Year Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2017 2018 IBNR Count 2009 $ 93.8 $ 87.6 $ 82.5 $ 80.3 $ 79.4 $ 79.2 $ 77.5 $ 77.5 $ 77.9 $ 78.7 $ 1.9 8,032 2010 115.5 116.9 115.8 115.9 116.3 114.9 114.7 115.9 116.5 3.3 10,174 2011 141.4 144.2 144.3 145.5 143.8 146.7 148.3 147.9 7.1 12,465 2012 176.3 171.1 165.2 157.2 162.9 163.7 163.7 10.2 13,042 2013 179.3 167.4 160.1 154.4 155.3 155.4 12.3 11,683 2014 182.1 172.9 154.7 152.1 150.3 15.2 10,880 2015 189.6 164.2 157.5 150.3 22.5 11,417 2016 189.6 180.5 164.6 24.5 15,790 2017 186.1 172.1 35.4 16,405 2018 187.2 69.4 15,711 Total $1,486.7 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2009 2010 2011 2012 2013 2014 2015 Year Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited 2016 2017 2018 2009 $ 19.2 $ 41.2 $ 54.6 $ 61.6 $ 65.4 $ 68.6 $ 69.8 $ 70.8 $ 72.4 $ 73.1 22.1 57.2 76.9 89.5 96.5 101.0 104.2 106.3 107.2 2011 30.0 71.3 97.3 114.0 122.9 128.0 130.9 132.8 2012 30.4 74.8 102.6 120.1 130.7 136.0 141.4 2013 30.9 74.6 101.2 114.0 122.8 127.4 2014 30.6 70.5 92.3 105.6 112.5 2015 28.0 65.7 87.2 99.4 2016 33.9 78.1 99.5 2017 32.8 73.0 2018 35.6 Total $1,001.9 Total reserves for 2009 ± 2018 accident years (incurred - paid) 484.8 Total reserves for 2008 and prior accident years 91.1 Unallocated loss adjustment expense and other 17.0 Net reserves at December 31, 2018 $ 592.9 126 THE HANOVER INSURANCE GROUP | 2018 ANNUAL REPORT