UPDATE 2-Hanover posts Q2 loss on charges

jueves 31 de julio de 2008 23:55 CEST

(Recasts; adds details, analyst and company comments)

By Supantha Mukherjee

BANGALORE, July 31 (Reuters) - Hanover Insurance Group Inc (THG.N: Cotización) posted a second-quarter loss due to a charge related to the sale of its life business unit.

However, the company's earnings before charges beat analysts' expectations.

"Solid underwriting performance in our property and casualty business enabled us to withstand the losses resulting from high catastrophe activity observed industry wide in the second quarter," said Chief Executive Frederick Eppinger.

Analyst Clifford Gallant of Keefe, Bruyette & Woods said quarterly results were boosted by a better-than-expected combined ratio -- a measure of how much is spent for every dollar of premium earned.

Combined ratio in the second quarter rose to 95.5 percent from 94.4 percent in the prior-year quarter. The analyst was looking for a combined ratio of 98 percent.

Net premiums earned rose 1.4 percent to $369.5 million.

"In the insurance business prices are declining in the industry, so the fact that the company was able to show some growth was a positive," said Gallant, who has an "outperform" rating on the stock.   Continuación...