Q3 2010Earnings Results

The Hanover Insurance Group, Inc.

To be read only in conjunction with the press release dated November 3, 2010 and the conference call scheduled for November 4, 2010.

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Forward-Looking Statements andNon-GAAP Financial Measures

Certain statements in this presentation, including responses to questions, contain or may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Use of the words “believes,” “anticipates,” “expects,” “projections,” “outlook,” “should,” “plan,” “confident,” “guidance,” “on track to,” “promise,” “line of sight” and similar expressions is intended to identify forward-looking statements. In particular, this presentation includes forward-looking statements with respect to after-tax operating earnings per share, return targets, estimates of excess capital (which is dependent on, among other things, future results), Personal Lines profitability targets, the pricing environment and the company’s ability to increase rates and to capitalize on potential industry disruption; competitive position; net written premium growth and retention; new business growth (including as a result of the renewal rights transaction, new product introductions and geographic expansion); prior year reserve development; GAAP and accident year loss ratios; expense ratio and expense ratio improvements from improving scale; product margins, including with respect to new business; new product availability; the impact of various transactions, investments and the effect of lower yields on future net investment income, product introductions, product- geographic- and account- based mix changes on future growth and profitability; and return on equity; and may also include forward looking statements on underwriting conditions, the adequacy of reserves (including reserves established with respect to catastrophes or in connection with the Michigan Supreme Court’s recent decision overturning the so-called Kreinerstandard), the impact of anticipated regulatory changes, the impact of any recent, pending or future acquisitions, capital levels, ratings, the number of shares outstanding, share repurchases, reinvestment rates, investment impairments, net investment income, and discontinued operations.

The company cautions investors that forward-looking statements are not guarantees of future performance, and actual results could differ materially. Investors are directed to consider the risks and uncertainties in our business that may affect future performance and that are discussed in readily available documents, including the company’s earnings press release dated November 3, 2010 and the Annual Report and other documents filed by The Hanover with the Securities and Exchange Commission, which are available at www.hanover.com under “Investors.” We assume no obligation to update this presentation, which speaks as of September 30, 2010.These uncertainties include the uncertain economic environment, the possibility of adverse catastrophe experience (including terrorism) and severe weather, the uncertainties in estimating catastrophe and non-catastrophe weather-related losses, the uncertainties in estimating property and casualty losses, the ability to increase or maintain certain property and casualty insurance rates, the impact of new product introductions, adverse loss development, changes in frequency and loss trends, the ability to improve renewal rates and increase new property and casualty policy counts, adverse selection in underwriting activities, investment impairments, heightened competition (including rate pressure), adverse and evolving state and federal legislation or regulation, adverse regulatory or litigation actions, financial ratings actions, and various other factors. Comments referring to the profitability and future performance and growth as a result of the OneBeacon renewal rights deal, westward expansion, or new product introductions, the acquisition of Campania, Inc. and Benchmark and the transaction with ICW Group are forward-looking statements. The discussion in this presentation of The Hanover’s financial performance includes reference to certain financial measures that are not derived from generally accepted accounting principles, or GAAP, such as total segment income (sometimes referred to as property and casualty segment income), segment income after taxes, and loss ratios excluding catastrophes and/or development and accident year loss ratios excluding catastrophes. A reconciliation of non-GAAP measures to the closest GAAP measure is included in either the press release or statistical supplement, which are posted on our website. The reconciliation of accident year loss ratio and combined ratio excluding catastrophes to the nearest GAAP measure, total loss ratio and combined ratio, is found on pages 10 and 11 of the statistical supplement. After-tax segment income EPS (sometimes referred to as “after-tax segment income per share” or “after-tax operating earnings per share”) is a non-GAAP measure. It is defined as net income (loss) excluding the after-tax impact of net realized investment gains (losses), as well as results from discontinued operations for a period divided by the average number of diluted shares of common stock. The definition of other financial measures and terms can be found in the Annual Report on pages 77-79.

THG Third Quarter Earnings

Opening Remarks byFred Eppinger

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Third Quarter 2010 Results

Q3 2009 Q3 2010 Q3 2009 Q3 2010

QTR Net Income Per Share QTR After Tax Segment Income(1)

Per Share

(1) Non-GAAP Financial Measure

$49.7 $52.3

$1.15per share

$45.3 $44.7

$0.97per share

$0.89per share

$0.98per share

QTR Net Income ($ in millions) QTR After Tax Segment

Income(1)

($ in millions)

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Book Value Per Share Growth

$40

$45

$50

$55

$60

$48.06$49.72

$51.59$52.61

$55.25

Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010

15%

5%

THG Third Quarter Earnings

P&C Underwriting Highlights by Marita Zuraitis

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THG Underwriting Performance

(1) Non-GAAP financial measure

Q3 2010 Q3 2009 YTD 2010 YTD 2009

AY LR 51.5% 55.2% 52.3% 55.5%

Cats 3.3% 3.9% 6.9% 4.9%

Loss Development (2.9)% (6.1)% (3.2)% (5.6)%

CY LR 51.9% 53.0% 56.0% 54.8%

LAE 10.5% 10.3% 10.2% 9.7%

OUE 34.6% 34.3% 34.7% 33.9%

CR 97.0% 97.6% 100.9% 98.4%

CR, ex-cat (1) 93.7% 93.7% 94.0% 93.5%

AY CR, ex-cat (1) 96.6% 99.8% 97.2% 99.1%

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• Lower ex-catastrophe accident year loss ratio (1)

• Lower underwriting and loss adjustment expense ratio

• Lower favorable loss and LAE development

(4.2) points

(1.5) points

0.5 points

(1) Non-GAAP financial measure

Q3 2010 Q3 2009 ChangePre-tax Segment Income(1) $ 43M $ 27M $ 16MCatastrophe Impact 16M 15M 1MAdjusted Ex-Cat Segment Income(1) $ 59M $ 42M $ 17M

Combined Ratio 95.1% 100.2% -5.1%Catastrophe Loss Ratio 4.3% 4.2% 0.1%Ex-catastrophe Combined Ratio(1) 90.8% 96.0% -5.2%

PL Third QuarterOperating Highlights

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PL Growth Trends

2.1%$397$388

Q3 2009 Q3 2010

Net Written Premium$ in millions Retention

Q3 2009 = 78.2%

Q3 2010 = 78.5%

1.6 points of 2.1% decrease in net written premium is attributable to reduction in Louisiana homeowners business

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CL Third QuarterOperating Highlights

(1) Non-GAAP financial measure

Q3 2010 Q3 2009 ChangePre-tax Segment Income(1) $ 35M $ 39M $ (4)MCatastrophe Impact 8M 9M (1)MAdjusted Ex-Cat Segment Income(1) $ 43M $ 48M $ (5)M

Combined Ratio 99.1% 97.8% 1.3%Catastrophe Loss Ratio 2.3% 3.4% -1.1%Ex-catastrophe Combined Ratio(1) 96.8% 94.4% 2.4%

• Lower ex-catastrophe accident year loss ratio (1)

• Higher underwriting and loss adjustment expense ratio

• Lower favorable loss and LAE development

(1.5) points

0.6 points

3.3 points

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CL Growth Trends

42%

$292

$415

Q3 2009 Q3 2010

Net Written Premium$ in millions

THG Third Quarter Earnings

Financial Review bySteve Bensinger

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Reconciliation of Segment Income to Net Income

(1) Total Property and Casualty and Segment Income (After Tax) (and corresponding per share calculations), are non-GAAP financial measures. The reconciliation to the closest GAAP measure, Income from Continuing Operations, can be found on the last page of the earnings press release dated November 3, 2010.

(2) Income tax benefit on non-segment income reflects benefits from the release of tax valuation allowances related to capital loss carryforwardsof $3.0 million and $3.4 million during the quarters ended September 30, 2010 and September 30, 2009, respectively.

Q3 2010 Q3 2009Property and CasualtyGAAP underwriting income 17.9$ 11.4$ Net investment income 61.3 62.1 Other, net - 0.1 Total Property and Casualty (1) 79.2 73.6 Interest Expense on Debt (11.8) (6.3) Total Federal Income Tax Expense on Segment Income (22.7) (22.0)

Segment Income After Tax (1) 44.7 45.3 Realized Investment Gains 5.7 - Gain From Retirement of Debt - 0.2 Federal Income Tax Benefit on Non-segment Income (2) 1.0 3.1 Gain from Discontinued Operations 0.9 1.1 Net Income 52.3$ 49.7$

Net Income Per Share (Diluted) 1.15$ 0.97$ Total Segment Income Per Share (Diluted) (1) 0.98$ 0.89$

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THG Asset Mix

Investment Portfolio Holdings $5.5B(1) Market ValueAs of 9/30/2010

92%

5%

3%

Fixed Income Securities

Equities & Other Investments

Cash & Cash Equivalents

(1) This information and investment information presented later in this presentation includes assets of the discontinued accident and health business

% of market value

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Fixed Income Sector Breakdown

$5.0 Billion Market ValueAs of 9/30/2010

% of market value

30%

10%11%

93% of fixed income securities are investment grade

Weighted average quality A+

Duration: 4.2 years

Fixed Income Characteristics:

Corporates $2.5 Billion

Corporate Holding Characteristics:86% Investment Grade

Duration 4.4 years

Industrials Financials Utilities

51%

18%

3%5%

16%

7%

Corporates Municipals (Tax-exempt)

MBS/ABSU.S. Govt/Agencies Municipals (Taxable)

CMBS

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CMBS Portfolio

$366.3 million as of 9/30/2010

Rating:

AAA – 72%AA – 14%A – 14%

Weighted average LTV: 74%

Geography

20%

14%5%

3%

39%

3%8% 5%

3%

Defeased NJ CA TX IL Other NC NY FL

Vintage

200710%

200512%

20066%

Prior to 200572%

Property Type

Industrial 7%

Multi 13%

Retail 34%

Office 27%

Other 19%

% of market value

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Net Unrealized Position

($ in millions)

Investment Type Wtd Avg Quality

Book Value

MarketValue

NetUnrealized @ 9/30/2010

Change in Net Unrealized

During Q3 2010

∆ in Net Unrealized

YTDCorporate:

NAIC 1 A 929.6$ 1,016.2$ 86.6$ 24.2$ 54.3$ NAIC 2 BBB 1,061.6 1,163.7 102.1 25.0 53.6 NAIC 3 and Below B+ 342.3 359.6 17.3 12.7 13.4

BBB+ 2,333.5 2,539.5 206.0 61.9 121.3 MBS / CMBS / ABS: MBS AA+ 787.0 826.4 39.4 2.5 23.8 CMBS AA+ 346.2 366.3 20.1 9.4 17.4 ABS A+ 74.3 79.4 5.1 0.8 2.6

Municipals: Taxable AA 778.1 813.0 34.9 19.9 51.5 Tax Exempt A+ 153.8 159.4 5.6 1.1 1.5

U.S. Government AAA 232.4 240.2 7.8 (0.8) 8.3

Total Fixed Maturities A+ 4,705.3 5,024.2 318.9 94.8 226.4

Equities 112.3 125.7 13.4 6.7 1.5 Mortgage loans and other long-term investments 39.7 41.2 1.5 - (0.5)

Total 4,857.3$ 5,191.1$ 333.8$ 101.5$ 227.4$

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THG Balance Sheet Strength

(In millions, except per share data) September 30

2010June 30

2010

Total shareholders' equity $2,479 $2,352Total book value per share $55.25 $52.61Debt/total capital 20.5% 21.2%THG holding company cash and investments $350 $350

Statutory surplus $1,795 $1,752Property and casualty premium to surplus ratio 1.65:1 1.63:1

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