The Hanover Insurance Group, Inc. (NYSE:THGA) Q3 2016 Earnings Conference Call - Final Transcript
Nov 04, 2016 • 10:00 am ET
Good day, ladies and gentlemen, and welcome to The Hanover Insurance Group Third Quarter Earnings Conference Call. My name is Derek and I'll be your operator for today. [Operator Instructions] I would now like to turn the conference over to Oksana Lukasheva. You may proceed.
And thank you for joining us for our third quarter conference call. We will begin today's call with prepared remarks from Joe Zubretsky, our President and Chief Executive Officer and our Interim Chief Financial Officer, Gene Bullis. Available to answer your questions after our prepared remarks are Jack Roche, President of Commercial Lines; Dick Lavey, President of Personal Lines; Johan Slabbert, Chief Executive Officer of Chaucer, and our incoming Chief Financial Officer, Jeff Farber.
Before I turn the call over to Joe, let me note that our earnings press release, financial supplement, and a complete slide presentation for today's call are available in the Investors section of our website at www.hanover.com. After the presentation, we will answer questions in the Q&A session. Our prepared remarks and responses to your questions today, other than statements of historical fact, include forward-looking statements, including our 2016 outlook. There are certain factors that could cause actual results to differ materially from those anticipated by this press release, slide presentation, and conference call. We caution you with respect to reliance on forward-looking statements, and in this respect, to refer you to the forward-looking statement section in our press release, Slide 2 of the presentation deck, and our filings with the SEC.
Today's discussion will also reference certain non-GAAP financial measures, such as operating income and accident share loss and combined ratios excluding catastrophes among others. A reconciliation of these non-GAAP financial measures to the closest GAAP measure on a historical basis can be found in the press release or the financial supplement, which are posted on our website, as I mentioned earlier. With those comments, I will turn the call over to Joe.
Thank you, Oksana. Welcome everyone to our third quarter earnings call. We earned an operating income of $78.6 million, or $1.83 per fully diluted share in the quarter, an increase of 13.7% over the prior year quarter on a per share basis and we produced a consolidated combined ratio of 94.2%, generating an operating return on equity of 11.6%. We are pleased with our performance in the quarter, the trends we experienced across many of our business segments and how we are positioned for the fourth quarter and 2017.
As we will detail in our remarks, underlying our results were lower than expected catastrophe losses, consistently favorable underwriting performance, rate increases across our domestic business, and healthy and controlled overall net written premium growth of 4.3%. We also made significant progress on business initiatives in each segment during the quarter. While some challenges remain, we are satisfied with our performance and pleased with the growth trends in this very competitive market.
This morning I will discuss highlights of our third quarter results and trends, Gene will review our