Fundamentals snapshot
THG · NYQ · Financial Services · Insurance - Property & Casualty
Current price
$223.60
52-week range
$166.54 - $236.07
Market cap
$7.79B
One-glance verdict
We don't put a cash-flow fair value on banks and insurers. For these companies the reported 'cash flow' is really just money moving between loans, deposits and trades — not the leftover profit the owners could actually pocket — so the usual method would print a misleading number.
Balance sheet
Net debt $577.90M. Interest coverage shows how many times profit covers the interest bill.
What stands out
What this company does
The Hanover Insurance Group sells property and casualty insurance (policies that cover you from financial loss) to people and businesses across the United States. Their products range from everyday car and home insurance to specialized coverage for companies against risks like workplace accidents. Hanover makes money by collecting regular payments, called premiums, and its success depends on making sure these collected premiums are more than the money it pays out for customers' claims.
Founded in 1852 in New York City as a fire insurance company, The Hanover has a long history of steady operation and paying dividends (a portion of profits shared with investors). A key turning point was its 2005 name change from Allmerica Financial Corp. back to The Hanover Insurance Group, refocusing on its core insurance business. The company has grown by acquiring other insurers, like Chaucer Holdings in 2011, which expanded its specialty insurance offerings. Today, it operates across the United States, selling its products exclusively through a network of independent agents and brokers rather than directly to consumers.
The Hanover sells property and casualty (P&C) insurance, which protects people and businesses from financial loss involving their property or from being held responsible for accidents. For individuals, this means familiar products like car insurance for accidents and home insurance for damage from events like fires or storms. For businesses, it offers protection against a wide range of risks, such as an employee getting injured on the job (workers' compensation) or a lawsuit against the company's executives. The company makes money in two main ways: by collecting more in payments, called premiums, than it pays out in claims for damages, and by investing the premiums it collects before they are needed to pay claims.
This is the largest part of the company's business, making up over 40% of its insurance premiums. This segment provides insurance products for individuals and families, which you might buy for your own life. The main products are automobile insurance to cover car accidents and homeowners insurance to protect against damage to a house or personal belongings. It also offers coverage for other personal property, like boats, recreational vehicles, and valuable items.
This segment provides a broad range of insurance for small and mid-sized businesses and represents over a third of the company's business. Think of the shops, restaurants, or local manufacturing companies in your town; this part of Hanover serves them. It offers policies that bundle multiple coverages, like protecting the business's property from damage and covering it if someone is injured on its premises (general liability). It also provides essential coverage like commercial auto insurance for company vehicles and workers' compensation, which covers medical costs and lost wages for employees injured at work.
This segment, making up just under a quarter of the business, offers insurance for businesses with unique or more complex risks that standard policies don't cover. This includes professional liability insurance (also known as errors and omissions) for professionals like architects or consultants in case their advice causes a financial loss for a client. It also covers things like marine insurance for goods being transported over water and surety bonds, which are guarantees that a contractor will complete a project as promised. This is a growing area of focus for the company.
The company's current strategy focuses on maintaining strong profitability by being very selective about the insurance risks it takes on, a practice known as underwriting discipline. Management is also focused on expanding its more specialized insurance lines, which can offer better profitability. They are also investing in technology to make it easier for the independent agents they partner with to do business and to improve the efficiency of their own operations. A key goal is to balance growth across its different business segments to ensure stable and predictable earnings over the long term.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
For a bank or insurer, the "free cash flow" shown on its statements is mostly money flowing through loans, deposits and trades — not the leftover profit the owners could actually keep, which is what this kind of valuation needs. Running that through the usual method would spit out a meaningless number, so we leave the cash-flow fair value out here rather than show you something misleading.
Is it drowning in debt?
Net debt $577.9M. Interest coverage 20.5x.
The Hanover Insurance Group, Inc.'s profit covers its interest bill about 20.5 times over. which is stronger than most peers shown here.
Total debt $844.00M Interest coverage 20.53x This is the baseline the peer rows are being compared against.
Total debt $2.04B Interest coverage 14.41x -30% vs THG Carries about 1.4x less debt cushion than THG.
Total debt $224.54M Interest coverage 60.58x +195% vs THG Carries about 3.0x more debt cushion than THG.
Total debt $900.96M Interest coverage 12.95x -37% vs THG Carries about 1.6x less debt cushion than THG.
Total debt $962.13M Interest coverage 24.19x +18% vs THG Carries about 1.2x more debt cushion than THG.
What you should know
The numbers
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Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know