Financial Analysis

13. Commitments and Contingencies Legal Proceedings The Company has been named a defendant in various legal proceedings arising in the normal course of business. In addition, the Company is involved, from time to time, in examinations, investigations and proceedings by governmental and self-regulatory agencies. The potential outcome of any such action or regulatory proceedings in which the Company has been named a defendant or the subject of an inquiry, examination or investigation, and its ultimate liability, if any, from such action or regulatory proceedings, is difficult to predict at this time. The ultimate resolutions of such proceedings are not expected to have a material effect on its financial position, although they could have a material effect on the results of operations for a particular quarterly or annual period. Residual Markets The Company is required to participate in residual markets in various states, which generally pertain to high risk insureds, disrupted markets or lines of business or geographic areas where rates are regarded as excessive. The results of the residual markets are not subject to the predictability associated with the Companys own managed business, and are significant to both the personal and commercial automobile lines of business. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

7. Pension Plans The components of net periodic pension cost for the defined benefit pension plans included in the Companys results of operations are as follows: Three Months Ended June 30, (in millions) 2026 2025 Interest cost $ 4.8 $ 5.1 Expected return on plan assets ( 4.6 ) ( 4.8 ) Recognized net actuarial loss 1.6 1.7 Net periodic pension cost $ 1.8 $ 2.0 Six Months Ended June 30, (in millions) 2026 2025 Interest cost $ 9.5 $ 10.2 Expected return on plan assets ( 9.2 ) ( 9.5 ) Recognized net actuarial loss 3.3 3.3 Net periodic pension cost $ 3.6 $ 4.0 …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

5. Debt and Credit Arrangemen ts Debt consists of the following: (in millions) June 30, 2026 December 31, 2025 Short-term: Subordinated debentures maturing February 3, 2027 50.1 Senior debentures maturing April 15, 2026 375.0 Total short-term debt 50.1 375.0 Long-term: Senior debentures maturing September 1, 2035 500.0 500.0 Senior debentures maturing September 1, 2030 300.0 300.0 Subordinated debentures maturing February 3, 2027 50.1 Total long-term debt principal 800.0 850.1 Unamortized debt issuance costs ( 6.1 ) ( 6.8 ) Total long-term debt 793.9 843.3 Total debt $ 844.0 $ 1,218.3 On January 15, 2026, the Company used a portion of the net proceeds of its August 21, 2025 debt issuance to redeem its outstanding $ 375.0 million par value of 4.50 % unsecured senior debentures that were issued on April 8, 2016 . For a discussion of the August 21, 2025 debt issuance, see Note 5 Debt and Credit Arrangements in the Notes to Consolidated Financial Statements in the Companys 2025 Annual Report on Form 10-K. At June 30, 2026, the Company was in compliance with the covenants associated with its debt indentures and credit arrangements. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

10. Stock-based Compensation As of June 30, 2026 , there were 1,110,185 and 1,201,874 shares available for grant under The Hanover Insurance Group 2022 Long-Term Incentive Plan and 2023 Employee Stock Purchase plan, respectively. Compensation cost for the Companys stock-based awards and the related tax benefits were as follows: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Stock-based compensation expense $ 11.5 $ 11.2 $ 18.1 $ 17.8 Tax benefit ( 2.4 ) ( 2.3 ) ( 3.8 ) ( 3.7 ) Stock-based compensation expense, net of taxes $ 9.1 $ 8.9 $ 14.3 $ 14.1 Stock Options Information on the Companys stock option activity for the six months ended June 30, 2026 and 2025 is summarized below. Six Months Ended June 30, 2026 2025 (in whole shares and dollars) Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, beginning of period 1,094,462 $ 126.02 1,111,871 $ 117.43 Granted 148,066 173.56 140,393 161.82 Exercised ( 155,825 ) 105.32 ( 135,146 ) 93.86 Outstanding, end of period 1,086,703 135.46 1,117,118 125.86 Restricted Stock Units The Company has issued time-based, market-based and performance-based restricted stock units to eligible employees, all of which generally vest after three years of continued employment. The following table summarizes activity information about employee restricted stock units: Six Months Ended June 30, 2026 2025 (in whole shares and dollars) Shares Weighted Average Grant Date Fair Val …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

4. Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, i.e., exit price, in an orderly transaction between market participants. The Company emphasizes the use of observable market data whenever available in determining fair value. Fair values presented for certain financial instruments are estimates which, in many cases, may differ significantly from the amounts that could be realized upon immediate liquidation. A hierarchy of the three broad levels of fair value is as follows, with the highest priority given to Level 1 as these are the most observable, and the lowest priority given to Level 3: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data, including model-derived valuations. Level 3 Unobservable inputs that are supported by little or no market activity. When more than one level of input is used to determine fair value, the financial instrument is classified as Level 2 or Level 3 according to the lowest level input that has a significant impact on the fair value measurement. The following methods and assumptions were used to estimate the fair value of each class of financial instruments and have not changed since last ye …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

6. Income Taxes Income tax expense for the six months ended June 30, 2026 and 2025 has been computed using estimated annual effective tax rates. These rates are revised, if necessary, at the end of each successive interim period to reflect current estimates of the annual effective tax rates. The tax provision was comprised of U.S. federal and state income tax expense of $ 103.5 m illion and $ 73.8 million for the six months ended June 30, 2026 and 2025, respectively. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company and its subsidiaries are subject to U.S. federal and state income tax examinations for years after 2020.

IncomeTaxDisclosureTextBlock

New Accounting Pronouncements Recently Implemented Standards In December 2023, the Financial Accounting Standards Board (FASB) issued ASC Update No. 2023-09 , Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This Update requires entities to disclose an annual tabular rate reconciliation, using both percentages and currency amounts, broken out into specific categories, to the extent those items exceed a specified threshold. In addition, all entities are required to disclose annual income taxes paid, net of refunds received, disaggregated by federal, state, and foreign jurisdictions, and for individual jurisdictions when the amount is at least five percent of total income tax payments, net of refunds received. This Update was effective for annual reporting periods beginning after December 15, 2024. The Company implemented this guidance on a prospective basis and it did no t have a material effect on its financial position or results of operation, as the Update is disclosure related. Recently Issued Standards In September 2025, the FASB issued ASC Update No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This Update eliminates the traditional three-stage sequential software development model (preliminary, application development, and post-implementation) and instead requires capitalization to begin once management has authorized and commits funding to each s …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

9. Segment Information The Companys primary business operations include insurance products and services provided through four reporting segments: Core Commercial, Specialty, Personal Lines and Other. Core Commercial includes commercial multiple peril, commercial automobile, workers compensation, and other commercial coverages provided to small and mid-sized businesses. Specialty includes four divisions of business: Marine and Industrial Property, Professional and Executive Lines, E&S and Alternative Markets, and Surety and Other. E&S and Alternative Markets includes coverages such as excess and surplus lines, program business (providing commercial insurance to markets with specialized coverage or risk management need related to groups of similar businesses) and specialty general liability coverage. Personal Lines includes personal automobile, homeowners and other personal coverages. The Other segment includes earnings on holding company assets; holding company and other expenses, including certain costs associated with retirement benefits related to employees and agents of the Companys former life insurance subsidiaries; and run-off direct asbestos and environmental business, run-off voluntary assumed property and casualty pools, and run-off product liability business. The Company reports interest expense related to debt separately from the earnings of its reporting segments. This consists primarily of interest on the Companys senior and subordinated debentures. The s …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

14. Subsequent Events There were no subsequent events requiring adjustment to the financial statements and no additional disclosure required in the notes to the consolidated financial statements.

SubsequentEventsTextBlock