The Hanover Insurance Group, Inc., based in Worcester, Mass., is the holding company for a group of insurers that includes The Hanover Insurance Company, also based in Worcester, Citizens Insurance Company of America, headquartered in Howell, Michigan, and their affiliates. The Hanover offers a wide range of property and casualty products and services to individuals, families and businesses through an extensive network of independent agents, and has been meeting its obligations to its agent partners and their customers for more than 150 years. Taken as a group, The Hanover ranks among the top 35 of more than 950 property and casualty insurers in the United States.

Chart The Hanover Insurance Group conducts its business in two areas: Property and Casualty and Life Companies. Our Property and Casualty business consists of three operating segments: Personal Lines, Commercial Lines, and Other Property and Casualty. Together these segments account for 93% of our consolidated revenues. Our fourth operating segment is the Life Companies, which is a relatively small portion of our operations and is in run-off.

Personal Lines—includes such property and casualty coverage as personal automobile, homeowners and other personal policies.

Commercial Lines—includes such property and casualty coverage as workers’ compensation, commercial automobile, commercial multi peril and other commercial lines policies which include inland and ocean marine, fidelity and surety bonds, umbrella, general liability and fire.

Other Property and Casualty—consists of run-off voluntary pools business in which we have not actively participated since 1995, AMGRO—our premium financing business, and Opus Investment Management, Inc., which markets investment management services to institutions, pension funds and other organizations.

Life Companies—On December 30, 2005, we sold our run-off variable life insurance and annuity business to Goldman Sachs. After this sale, our remaining Life Companies segment, which is in run-off, now consists primarily of a block of traditional life insurance products, our GIC business, certain group retirement products and certain non-insurance subsidiaries.

Financial Summary

(In millions, except per share) Year Ended December 31	2005	2004	2003
Revenues	$2,624	$2,717	$2,831
Net (Loss) Income	(325)	125	87
Pre-Tax Segment Income⁽¹⁾	55	136	63
Total Assets	10,634	23,810	25,510
Shareholders Equity	1,951	2,340	2,220
Per Common Share
Net (Loss) Income—Diluted	$(6.02)	$2.34	$1.63
Book value	36.30	43.91	41.89

⁽¹⁾ Represents pre-tax income of the Company’s four operating segments: Personal Lines, Commercial Lines, Other Property and Casualty and Life Companies, as well as the interest expense related to our corporate debt. In accordance with Statement of Financial Accounting Standards No.131, the separate financial information of each segment is presented consistent with the manner in which results are regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Pre-tax segment income excludes realized gains and losses, gains or losses on disposal of businesses and discontinued operations and other items, the details of which are included on page 27 in the attached Annual Report on Form 10-K. We report interest expense related to our corporate debt separately from the earnings of our operating segments.

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