THG 2018 Annual Report

7 2018 ANNUAL REPORT | THE HANOVER INSURANCE GROUP underwriting actions. We have established a strong market position with the top retail agents and brokers and are pursuing attractive growth opportunities, building our specialty position in the domestic market. In 2018, we made several key strategic hires in our specialty unit, including business leaders for cyber, financial institutions and excess and surplus lines. GROWTH THROUGH INNOVATION: INVESTING IN OUR FUTURE We continue to actively explore new business models and capabilities across the digital landscape. Through a set of specific use cases and innovation pilots, we determine what customers are comfortable doing on their own, versus where they need the help of a trusted adviser. With the rapid pace of technological advancements, it is critical for us to have a targeted and agile technology road map that explores innovation across the value chain—from customer acquisition, to underwriting and claims analytics, to operating efficiencies—with our agents being critical players, beneficiaries and enablers of our digital agenda. In 2018, we launched a new customer acquisition platform through select agency websites in micro-professional and general liability products for sole proprietors, allowing agents to reach and acquire customers digitally. We also deployed a new personal lines agency quoting platform, giving us greater underwriting and rating flexibility. Among other initiatives, we are leveraging telematics in personal auto through our new SafeTeen program. On the efficiencies and analytics side, we expanded the use of drones in the claims and underwriting process. We also increased the use of robotics, analytics and automation in many of our back-office and claims functions. • Marine • AIX Program Business • Professional Liability • Management Liability • Surety • Hanover Specialty Industrial • Healthcare • Excess and Surplus $1.0B SPECIALTY 6% 4% 28% 15% 9% 8% 7% 23% • Commercial Multiple Peril • Commercial Auto • Workers’ Compensation • Inland Marine • AIX Program Business • Management and Professional Liability • Surety • Specialty Property • Other BOOK VALUE PER SHARE SPECIALTY PRODUCT MIX 2018 Net Premiums Written DIVIDENDS PAID PER SHARE $4.75 2014 2015 2016 2017 2018 $2.22 $1.88 $2.04 $1.69 $1.52 $4.75 2014 2015 2016 2017 2018 SPECIAL SPECIAL $2.22 $1.88 $2.04 $1.69 $1.52 $74.56* $70.59 $67.40 $66.21 $64.85 2014 2015 2016 2017 2018 * Reported book value per share in 2018 was $69.81. The illustration above excludes the impact of the $4.75 per share special dividend declared on December 30, 2018.