THG 2018 Annual Report

theories of liability, costs of repairs and replacement, legislative activity and other factors. We regularly reassess our estimate of loss reserves and LAE, both for current and past years, and resulting changes have and will affect our reported profitability and financial position. 5HIHUHQFH LV DOVR PDGH WR ³5LVN )DFWRUV´ LQ 3DUW ± Item 1A. LINES OF BUSINESS Commercial Lines Our Commercial Lines segment generated $2.7 billion, or 60.3%, of consolidated operating revenues and $2.6 billion, or 59.5%, of net premiums written, for the year ended December 31, 2018. The following table provides net premiums written by line of business for our Commercial Lines segment. Net Premiums YEAR ENDED DECEMBER 31, 2018 Written % of Total (in millions, except ratios) $ 861.4 33.0% Commercial automobile 344.8 13.2 Workers' compensation 317.1 12.1 Other commercial lines: Inland marine 268.2 10.3 Management and professional liability 229.9 8.8 AIX program business 223.2 8.5 Surety 72.5 2.8 Specialty property 64.1 2.5 Other 229.5 8.8 Total $ 2,610.7 100.0% Our Commercial Lines product suite provides agents and customers with products designed for small, middle and specialized markets. Commercial Lines coverages include: Commercial multiple peril coverage insures businesses against third-party general liability from accidents occurring on their premises or arising out of their operations, such as injuries sustained from products sold. It also insures business property for damage, such as that caused by fire, wind, hail, water damage (which may include flood), theft and vandalism. Commercial automobile coverage insures businesses against losses incurred from personal bodily injury, bodily injury to third parties, SURSHUW\ GDPDJH WR DQ LQVXUHG¶V YHKLFOH DQG SURSHUW\ GDPDJH WR RWKHU YHKLFOHV DQG SURSHUW\ &RPPHUFLDO DXWRPRELOH SROLFLHV DU e often written in conjunction with other commercial policies. Workers’ compensation coverage insures employers against employee medical and indemnity claims resulting from injuries related to ZRUN :RUNHUV¶ FRPSHQVDWLRQ SROLFLHV DUH RIWHQ ZULWWHQ LQ FRQMXQFWLRQ ZLWK RWKHU FRPPHUFLDO SROLFLHV Other commercial lines is comprised of: x inland marine coverage LQVXUHV EXVLQHVVHV DJDLQVW SK\VLFDO ORVVHV WR SURSHUW\ VXFK DV FRQWUDFWRU¶V HTXLSPHQW EXLOGHUV¶ risk and goods in transit, and also covers jewelers block, fine art and other valuables; x management and professional liability coverage provides protection for directors and officers of companies that may be sued in connection with their performance, and errors and omissions protection to companies and individuals against negligence or bad faith, as well as protection for employment practices liability and fidelity and crime; x AIX program business provides coverage to markets where there are specialty coverage or risk management needs related WR JURXSV RI VLPLODU EXVLQHVVHV LQFOXGLQJ FRPPHUFLDO PXOWLSOH SHULO ZRUNHUV¶ FRPSHQVDWLRQ FRPPHUFLDO DXWRPRELOH general liability and other commercial coverages; x surety provides businesses with contract surety coverage in the event of performance or non-payment claims, and commercial surety coverage related to fiduciary or regulatory obligations; x specialty property provides insurance to small and medium-sized chemical, paint, solvent and other manufacturing and distribution companies; and 4 THE HANOVER INSURANCE GROUP | 2018 ANNUAL REPORT