THG 2018 Annual Report

Personal automobile liability (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2018 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2014 2015 Claim Year Unaudited Unaudited 2016 2017 2018 IBNR Count 2014 $ 323.1 $ 304.1 $ 308.8 $ 310.2 $ 312.5 $ 4.7 43,356 2015 327.4 334.1 328.6 332.4 5.6 42,358 2016 337.9 344.5 355.3 11.5 42,214 2017 363.6 362.3 35.0 42,200 2018 394.2 151.7 39,164 Total $ 1,756.7 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2014 2015 Year Unaudited Unaudited 2016 2017 2018 2014 $ 107.2 $ 188.6 $ 241.1 $ 279.4 $ 298.4 2015 112.9 205.4 261.5 301.9 2016 112.8 213.1 288.0 2017 115.0 229.2 2018 121.7 Total $ 1,239.2 Total reserves for 2014 ± 2018 accident years (incurred - paid) 517.5 Total reserves for 2013 and prior accident years 65.4 Unallocated loss adjustment expense 13.8 Net reserves at December 31, 2018 $ 596.7 Homeowners (in millions) As of Incurred Losses and ALAE, Net of Reinsurance December 31, 2018 YEARS ENDED DECEMBER 31, Cumulative Incurred Accident 2015 Claim Year Unaudited 2016 2017 2018 IBNR Count 2015 $ 267.1 $ 272.0 $ 272.0 $ 274.2 1.7 30,436 2016 222.1 226.5 231.4 3.2 25,456 2017 291.4 296.5 3.4 33,394 2018 312.9 46.0 30,487 Total $ 1,115.0 Cumulative Paid Losses and ALAE, Net of Reinsurance YEARS ENDED DECEMBER 31, Accident 2015 Year Unaudited 2016 2017 2018 2015 $ 199.9 $ 253.8 $ 260.6 $ 267.5 2016 154.3 207.9 218.2 2017 204.5 271.6 2018 213.7 Total $ 971.0 Total reserves for 2015 ± 2018 accident years (incurred - paid) 144.0 Total reserves for 2014 and prior accident years 4.8 Unallocated loss adjustment expense 3.4 Net reserves at December 31, 2018 $ 152.2 130 THE HANOVER INSURANCE GROUP | 2018 ANNUAL REPORT