THG 2018 Annual Report

YEAR ENDED DECEMBER 31, 2017 (dollars in millions) Net Premiums Written Loss & LAE Ratios Catastrophe Loss Ratios Commercial Lines: Commercial multiple peril $ 815.3 66.2 11.8 Commercial automobile 322.7 70.6 1.4 Workers' compensation 311.1 58.6 ² Other commercial 1,012.9 61.1 7.3 Total Commercial Lines 2,462.0 63.7 7.1 Personal Lines: Personal automobile 1,041.6 70.7 0.6 Homeowners 566.9 59.8 13.5 Other personal 38.6 35.9 1.8 Total Personal Lines 1,647.1 66.1 5.1 Total $ 4,109.1 64.7 6.4 YEAR ENDED DECEMBER 31, 2016 (dollars in millions) Net Premiums Written Loss & LAE Ratios Catastrophe Loss Ratios Commercial Lines: Commercial multiple peril $ 792.9 66.7 5.8 Commercial automobile 307.1 78.6 0.8 Workers' compensation 285.6 50.6 ² Other commercial 975.9 73.2 2.4 Total Commercial Lines 2,361.5 69.1 3.0 Personal Lines: Personal automobile 953.6 72.2 0.6 Homeowners 529.7 49.9 7.8 Other personal 37.9 43.8 2.9 Total Personal Lines 1,521.2 63.6 3.2 Total $ 3,882.7 67.2 3.1 The following table summarizes GAAP underwriting results for the Commercial Lines, Personal Lines, and Other segments and reconciles them to operating income (loss) before interest expense and income taxes. YEAR ENDED DECEMBER 31, 2018 (in millions) Commercial Lines Personal Lines Other Total Underwriting profit (loss), excluding prior year reserve development and catastrophes $ 193.2 $ 176.8 $ (3.0) $ 367.0 Prior year favorable (unfavorable) loss and LAE reserve development on non-catastrophe losses 34.1 (33.3) (1.2) (0.4) Prior year favorable catastrophe development 6.8 2.5 ² 9.3 Current year catastrophe losses (149.1) (79.4) ² (228.5) Underwriting profit (loss) 85.0 66.6 (4.2) 147.4 Net investment income 182.2 73.7 11.5 267.4 Fees and other income 8.9 11.6 2.7 23.2 Other operating expenses (10.4) (5.7) (15.4) (31.5) Operating income (loss) before interest expense and income taxes $ 265.7 $ 146.2 $ (5.4) $ 406.5 43 2018 ANNUAL REPORT | THE HANOVER INSURANCE GROUP