AM Best Upgrades Issuer Credit Ratings of The Hanover Insurance Group, Inc. and Its Subsidiaries

AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to "a+" from "a" and affirmed the Financial Strength Rating (FSR) of A (Excellent) of the subsidiaries of the parent holding company, The Hanover Insurance Group, Inc. (THG) THG, collectively referred to as Hanover Insurance Group Property and Casualty Companies (The Hanover). Additionally, AM Best has upgraded the Long-Term ICR to "bbb+" from "bbb" and all the Long-Term Issue Credit Ratings (Long-Term IR) of THG. The outlook of these Credit Ratings (ratings) remains stable. All above named 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 categorizes as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management.

The upgrade of the Long-Term ICRs reflect an improvement in AM Best's assessment of the group's business profile. Based on net premiums written, The Hanover ranks among the top 25 property/casualty organizations in the United States, while continuing to execute its business strategy of profitable growth and increasing market penetration. 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.

Additionally, The Hanover's ratings reflect the group's strongest risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR). The ratings also reflect the group's exposure management and re-underwriting, which have improved geographic and product diversification materially, resulting in profitability and earnings stability. Lastly, the subsidiaries of THG benefit from its moderate financial leverage and financial flexibility.

Partially offsetting these positive rating factors are The Hanover's comparatively high underwriting leverage and above-average expense position. However, over recent years, improved scale and enhanced operating efficiencies have driven a meaningful decline in the expense ratio.

The Long-Term ICRs have been upgraded to "a+" from "a", and the FSR of A (Excellent) has been affirmed 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 Long-Term ICR has been upgraded to "bbb+" from "bbb" with a stable outlook for The Hanover Insurance Group, Inc.

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

The Hanover Insurance Group, Inc.—
-- to "bbb+" from "bbb" on $199.5 million 7.625% senior unsecured debentures, due 2025 (of which $62.6 million remains outstanding)
-- to "bbb+" from "bbb" on $375.0 million 4.5% senior unsecured fixed rate notes, due 2026
-- to "bbb-" from "bb+" on $166 million 8.207% subordinated deferrable debentures, due 2027 (of which $50.1 million remains outstanding)
-- to "bbb-" from "bb+" on $175 million 6.350% subordinated deferrable debentures, due 2053

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

The Hanover Insurance Group, Inc.—
-- to "bbb+" from "bbb" on senior unsecured debt
-- to "bbb-" from "bb+" on subordinated debt
-- to "bbb-" from "bb+" 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 Understanding Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

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