AM Best Reaffirms Credit Ratings for The Hanover Insurance Group, Inc. and Its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) for the property/casualty subsidiaries of The Hanover Insurance Group, Inc. [NYSE: THG], collectively known as The Hanover. Additionally, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and all Long-Term Issue Credit Ratings (Long-Term IR) for The Hanover, the parent holding company. The outlook for these Credit Ratings is stable. All companies are based in Worcester, MA. (See below for a detailed listing of the companies and ratings.)

The ratings reflect The Hanover’s strongest-level balance sheet strength, adequate operating performance, favorable business profile, and appropriate enterprise risk management (ERM).

The balance sheet strength assessment is bolstered by The Hanover’s risk-adjusted capitalization, which is at the strongest level as measured by Best’s Capital Adequacy Ratio (BCAR). It also reflects a stable loss reserve position, comprehensive reinsurance program, and financial flexibility from The Hanover. Financial leverage is within acceptable levels for the current ratings. However, the balance sheet strength is somewhat offset by exposure to catastrophe and terrorism events. The Hanover’s adequate operating performance aligns with its peers despite higher accident year losses, lower reserve releases, and elevated catastrophe losses in recent years.

The ratings also consider The Hanover’s sound business profile and diversified product offerings, particularly in commercial and specialty lines. The Hanover’s strong market position in niche segments, experienced management team, and product range—including personal lines, core commercial offerings, and specialty coverages—contribute to its business profile. Business expansion is supported by strong relationships with independent agency partners. The Hanover has an appropriately designed and embedded ERM program, with a formal framework in place for the continual evaluation and monitoring of key risks and tolerances.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for the following subsidiaries of The Hanover Insurance Group, Inc.:

  • AIX Specialty Insurance Company
  • Allmerica Financial Alliance Insurance Company
  • Allmerica Financial Benefit Insurance Company
  • Campmed Casualty & Indemnity Company, Inc.
  • Citizens Insurance Company of America
  • Citizens Insurance Company of Ohio
  • Citizens Insurance Company of the Midwest
  • Citizens Insurance Company of Illinois
  • The Hanover American Insurance Company
  • The Hanover Atlantic Insurance Company Ltd.
  • The Hanover Insurance Company
  • The Hanover Casualty Company (formerly known as Hanover Lloyd’s Insurance Company)
  • Massachusetts Bay Insurance Company
  • NOVA Casualty Company
  • Verlan Fire Insurance Company

The following Long-Term IRs have been affirmed with a stable outlook:

The Hanover Insurance Group, Inc.—

  • “bbb+” (Good) on $199.5 million 7.625% senior unsecured debentures, due 2025 (of which $61.8 million remains outstanding)
  • “bbb+” (Good) on $375.0 million 4.5% senior unsecured fixed rate notes, due 2026
  • “bbb-” (Good) on $165.7 million 8.207% subordinated deferrable debentures, due 2027 (of which $50.1 million remains outstanding)
  • “bbb+” (Good) on $300 million 2.5% senior unsecured notes, due 2030

The following indicative Long-Term IRs under the shelf registration have been affirmed with a stable outlook:

The Hanover Insurance Group, Inc.—

  • “bbb+” (Good) on senior unsecured debt
  • “bbb-” (Good) on subordinated debt
  • “bbb-” (Good) on preferred stock

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