The Hanover to accelerate property rate rises after heavy Q1 cat losses

The Hanover expects a break-even first quarter operating result after being hit with $175m of pre-tax cat losses during the period.

Giving preliminary figures ahead of full-year results, the US insurer said Q1 cat losses came from more than 20 weather events. These included severe freeze across the northeast and midwest US in February, and widespread wind and tornado activity across much of the country in mid-to-late March.

“Heightened catastrophe activity turned what was a very solid quarter for The Hanover into one of approximately break-even operating results,” said John Roche, president and chief executive officer at the carrier.

“The recent severity of catastrophe losses, including winter weather and convective storms, has our full attention. It commands a quick and decisive response, with critical adjustments to exposure management and risk-mitigation strategies, both for our company and our industry,” he added.

Roche said The Hanover is “moving with a sense of urgency” to execute its action plans, which include a tighter focus on pricing, deductibles and disciplined underwriting.

“We fully expect the steps we have already taken, and those we continue to take – accelerating price and deductible increases in our property lines and applying even more disciplined underwriting and risk prevention measures – will enable us to adjust to the changing weather patterns and effectively manage our catastrophe exposures consistent with our track record over the last decade,” he said.