AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of the property/casualty subsidiaries of The Hanover Insurance Group, Inc. (THG) [NYSE: THG], which are collectively referred to as The Hanover. Additionally, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and all Long-Term Issue Credit Ratings (Long-Term IR) of THG, which is the parent holding company. The outlook of these Credit Ratings (ratings) is stable. All companies are headquartered in Worcester, MA. (See below for a detailed listing of the companies and ratings.)

The ratings reflect The Hanover’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The assessment of the group’s balance sheet strength is based on its risk-adjusted capitalization, which is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The assessment of the group’s balance sheet strength also reflects its stable loss reserve position, comprehensive reinsurance program and the benefits from the additional financial flexibility available through its ultimate parent, THG. Balance sheet strength is somewhat offset by exposure to catastrophe and terrorism events. Additionally, the ratings of The Hanover reflect the group’s improvement in underwriting profitability over the past five years. The ratings also consider the group’s sound business profile and diversified product offerings, especially within its commercial and specialty lines of business. The Hanover’s business profile assessment reflects its strong market position, as it ranks among the top 25 U.S. property/casualty organizations and holds a leading position in many of its targeted market niches, along with its experienced management team. The group’s product range includes personal lines, core commercial offerings and specialty coverages, with business expansion supported by strong relationships with its independent agency partners. The Hanover has implemented an appropriately designed and embedded ERM program to address the organization’s risks. A formal framework is in place, and the continual evaluation and monitoring of key risks and tolerances is well-established.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) has been affirmed with stable outlooks for the following subsidiaries of The Hanover Insurance Group, Inc.:

• AIX Specialty Insurance Company
• Allmerica Financial Alliance Insurance Company
• Allmerica Financial Benefit Insurance Company
• Campmed Casualty & Indemnity Company, Inc.
• Citizens Insurance Company of America
• Citizens Insurance Company of Ohio
• Citizens Insurance Company of the Midwest
• Citizens Insurance Company of Illinois
• The Hanover American Insurance Company
• The Hanover Atlantic Insurance Company, Ltd.
• The Hanover Insurance Company
• The Hanover Casualty Company (formerly known as Hanover Lloyd’s Insurance Company)
• The Hanover New Jersey Insurance Company
• Massachusetts Bay Insurance Company
• NOVA Casualty Company
• Verlan Fire Insurance Company

The following Long-Term IRs have been affirmed with a stable outlook:

The Hanover Insurance Group, Inc.—

-- “bbb+” (Good) on $199.5 million 7.625% senior unsecured debentures, due 2025 (of which $61.8 million remains outstanding)

-- “bbb+” (Good) on $375.0 million 4.5% senior unsecured fixed rate notes, due 2026

-- “bbb-” (Good) on $165.7 million 8.207% subordinated deferrable debentures, due 2027 (of which $50.1 million remains outstanding)

-- “bbb+” (Good) on $300 million 2.5% senior unsecured notes, due 2030

The following indicative Long-Term IRs under the shelf registration have been affirmed with a stable outlook:

The Hanover Insurance Group, Inc.—

-- “bbb+” (Good) on senior unsecured debt

-- “bbb-” (Good) on subordinated debt

-- “bbb-” (Good) on preferred stock

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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