Good day, ladies and gentlemen, and welcome to Second Quarter 2013 The Hanover Insurance Group, Incorporated Earnings Conference Call. My name is Aisha and I will be your coordinator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this call is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. Oksana Lukasheva, AVP, Investor Relations. You may proceed.

Thank you, Aisha. Good morning and thank you for joining us for our second quarter conference call. We will begin today’s call with prepared remarks from Fred Eppinger, our President and Chief Executive Officer and David Greenfield, our Executive Vice President and CFO. Also available to answer your questions after our prepared remarks are Jack Roche, President of Business Insurance; Andrew Robinson, President of Specialty Lines; Mark Desrochers, President of Personal Lines and Bob Stuchbery, President of International Operations and Chief Executive Officer of Chaucer. Before I turn the call over to Fred, let me note that our earnings press release, financial supplement and a complete slide presentation for today’s call are available in the Investors Section of our website at www.hanover.com. After the presentation, we will answer questions in the Q&A session. Our prepared remarks and responses to your questions today other than statements of historical fact include forward-looking statements including our expectations for 2013. There are certain factors that could cause actual results to differ materially from those anticipated by this press release, slide presentation and conference call. We caution you with respect to reliance of forward-looking statements and in this respect refer you to the Forward-Looking Statement section in our press release, Slide two of the presentation deck and our filings with the SEC. Today’s discussion will also reference certain non-GAAP financial measures such as operating income, operating income per share, operating results excluding the impact of catastrophes and development, ex-cat loss and combined ratios, and accident year loss and combined ratios among others. A reconciliation of these non-GAAP financial measures to the closest GAAP measure on a historical basis can be found in the press release or the financial supplement which are posted on our website, as I mentioned earlier. With those comments, I will turn the call over to Fred.

Thank you Oksana and good morning everyone. Thank you for joining our second quarter earnings call. I am pleased to report strong results this quarter as each of our business segments generated improved returns. Operating income for the quarter was a $1.05 per diluted share and 237 per diluted share year-to-date, which translates to an annualized operating ROE of 8% for the quarter. Our combined ratio for the quarter was 98% which represents a notable improvement over the 103 for the second quarter last year despite challenging quarter for the industry catastrophes. Six months into the year, we are pleased with the continued progress on improving our underwriting margins and advancing our strategic priorities that will position us for stronger performance in 2014 and beyond. I will discuss our progress on our priorities, our view on market conditions and our outlook following David’s remarks.

Thank you Fred, and good morning everyone. We’re reporting strong performance this quarter both in terms of our financial results as well as progress towards our goals. On a consolidated basis we generated net income of $53 million or $1.19 per diluted share compared to $21 million or $0.46 per diluted share in the prior year quarter. Operating income this quarter was $47 million or $1.05 per diluted share up considerably from the $10 million or $0.22 per diluted share in the second quarter of last year. At June 30, book value per share was $57.41 down 2% compared to year end 2012 and 3.6% in the quarter reflecting the increase in market interest rates this quarter which caused the declining on realized investment gains. Book value per share excluding net unrealized investment gains increased 3.4% year-to-date and 2% for the quarter. Our combined ratio this quarter was 98.4% this quarter compared to 103.1% in the prior year quarter, the improvement was the result of higher underwriting income in both domestic and Chaucer operations. Better underlying margins as well as favorable comparison in catastrophe losses and prior year development drove a notable improvement in domestic results. Chaucer benefited from higher favorable prior year reserve development partially offset by a more normal level of catastrophe losses. Pre-tax catastrophe losses in the quarter were $60 million or about 5 points on the combined ratio compared to $74 million or 7 points in the prior year quarter. Chaucer’s catastrophe losses were approximately $13 million this quarter and included floods in Europe and Canada as well as U.S. Tornadoes. Domestically tornadoes, hail and flood events were $47 million. The lower cat losses this quarter emphasized the importance of our exposure management actions especially in light of the continued increased level of weather activity. Overall,…

Thank you David. For the first six months of 2013 we met our profitability improvement targets. Given our progress in momentum, I am even more confident that we will deliver on our goals for the year and further improved performance in 2014. I would like to comment on three of our strategic priorities for 2013 and the progress in the quarter starting with our efforts to reduce our volatility and answer underwriting margins through our exposure management efforts. This quarter we made progress on this import strategic initiative as we built on our achievements in prior periods. Over the last two years we have been strived with some true of our geographic balance and adjust our property casualty mix. As a result, a top force state represent a progressively lower portion of our book and we increased the proportion of our casualty business in our portfolio moving from 36% five years ago, roughly at 50-50 split today. However, given the recent weather patterns, we thought it was critical to take some aggressive, but surgical actions to attack some of our property concentration risk. As we previously mentioned we reduced about 120 million of premium in 2012 and targeted another 200 million of reductions in 2013. Through six months, we have reduced 45 million in Personal Lines, 20 million in core Commercial Lines and about 30 million in specialty. As we look at our second quarter results, we believe we are beginning to see the impact of these efforts as we saw reduced volatility and areas where the industry experienced elevated weather losses. We are targeting a similar amount of reductions in the second half of the year and while this has reduced our domestic growth rate by over 5 points, we are satisfied with the trade off after proving profitability…

(Operator Instructions) Your first question comes from the line of Dan Farrell with Sterne Agee, you may proceed. Dan Farrell – Sterne Agee: Hi, how are you doing and how are you?

Hi, good, good morning. Dan Farrell – Sterne Agee: Just for a question on renewal rate increase in the quarter, can you tell us within personal lines what the increases were for auto and home?

This is Mark Desrochers, the auto increase was about 8% and about 10% on the home. Dan Farrell – Sterne Agee: And then, a question on some of the reserve movement in the quarter, I guess, just on the other commercial segment, I think, in your prepared remarks you highlighted surety as maybe one of the drivers, can you comment a little bit more detail on some of the overall drivers of additions there and then specifically with surety, I think you said, it was a run-off book and I think in the past you said there is some visibility and to seeing when those things, and I was wondering if you could comment on how many claims or accounts might still be involved from that and how you see that progressing going forward?

Yeah, I think as far as the other category it is primarily a surety adjustment. If you look at what’s happening we feel very, actually very good about that whole category, everything is kind of right on plan what we expected through the year, there has really been no surprises in any of the categories. This was part of the run-off book as we said at the last year, we got lot of transparency of that, we got the bulk of it behind us last year, but we still expect it to have some activity this year. But, we’re right on track for what our plan is and we feel really quite good about that business. I don’t know Andrew if there is anything you want to add.

I would just add two other points Dan. One is that we manage the outstanding penal amounts and the work to complete and at effectively that exposure and that is coming down in a way that is very consistent with our expectations, actually better than our expectation. I would just say, sureties will not be right, so the claims come through I would not read into this quarter as being any change from our sort of prior discussions around this. And certainly, our hope is that and our experience has been that claims will come through in one quarter and we’re aggressive on our suborn salvage, so we expect in later periods to be able to reclaim some of those losses. So, I would just say in general, I would not over read sort of what flowed through the financials for this quarter. Dan Farrell – Sterne Agee: Okay. Then it’s fair to say then the more recent core business within surety is performing as you would expect it to be, correct?

Absolutely, very much so, there is nothing that emerge into the first six months of the year that would change our view of how that is proceeding for us. Dan Farrell – Sterne Agee: Thank you very much, I will be in queue if there is anything else.

Okay, great thanks Dan.

Your next question comes from the line of Vincent DeAugustino with KBW, you may proceed. Vincent DeAugustino – Keefe Bruyette & Woods Inc.: Good morning, thanks for taking the questions. Let’s going to maybe try to focus some near longer term strategic stuffs and some of the more newer term stuff seems to be going pretty well. Mark from the topic that is come up couple of times this quarter on other calls with personal auto was shift towards lower cost models and a focus on a shift towards maybe pushing some customers through online channels and with the later on kind of refrained to Hartford’s comments. I am just little surprised by this, because this seems like a decade long observation, but it’s come up a couple of times this quarter. So, I am just curious how you feel about the personal auto competitive environment with maybe some potential changes going on with independent agents focused to ensure either in the model format they’re using or at least cost structure and then obviously the cap that the agency providers are going to try to protect market share, so again, just curious of your thoughts on the competitive landscape in the space?

This is Fred, just let me comment on this, let Mark, we have been talking about this for a while, we have actually invested a lot in this notion of franchise value and having pure agents that sell value and full accounts. We moved our book as you know to full accounts, the platinum watch and all the investments we have made on this what I would call kind of the value added approach. We’ve seen nothing in our numbers that say that the market we’re targeting has become more price sensitive or that the shopping behavior has changed in this. What has happened is this movement towards aggregators and lots of agents and using kind of a commodity approach to more align is being prevalent by a lot of people in the market, and so, I think those that have that approach may have seen some trends. But if you look at what’s happening with us, the retention of our business with our partner agents on this type of account has gone very well, we’re going to putting in pretty significant price increases and retaining the business and so, we’re actually, again, I’m sure that aren’t having it. The other thing that’s intriguing to know is the agency channel over pretty long period of time has held its own. The captives have come under more stress as a share then the agencies channel actually, the agency channel has helped pretty well. So, while we understand the dynamics and we understand the shift and the various channels, we are pretty bullish on our approach and frankly, our ability to grow that business and a lot of the segments. But, to your point, this is the trend that has been going on for while. There is obviously some growth in the direct and there a lot more compared ratings attention particularly I would argue in this aggregation agent model which is a lot of these little agents that basically just shop model on policies. So, I don't know market, is there comments about where we are now.

I think the only comment I would add to Fred's point is again, our focus on the total account value oriented customer is it's probably what would differentiate us from seeing that kind of shift in the marketplace. We have gone from probably a company that was 50-50 Modern Line, 4-5 years ago to our in course book today is between 70%-75% account rounded and I would say, even the newer business that we are riding, it's even at much higher percentage than that. So because we are focused on that part of the market, I don't think we have yet seen this kind of commoditized price pressure that some others are talking about. Vincent DeAugustino – Keefe Bruyette & Woods Inc.: That's good. Just to jump to Jack. Can we talk about commercial auto a little bit because if I look at the commercial X auto core loss ratio improvement that would have been about 240 basis points. So, understanding that your business has much more orders and contractor type rather than heavy trucking or passenger transport, I am just curious if there is anything that you are seeing from a loss cost trend standpoint emerging specific to commercial auto more recently because it seems to be somewhat of a recent industry thing that still what's somewhat surprising from my standpoint just on the relative nature of say more lines or other Lines being more difficult at times than commercial auto. John "Jack" C. Roche: Yeah I think. Your assessment of our portfolio is correct and that we tend to ride a smaller average account size. We tend to have a different type fleet than some – well we do have some orders and contractors; really a vast majority of our fleet are actually private passengers not to dissimilar…

Hi Vincent! It's David. You know it's a premium re-estimation, we do this all the time. This quarter it just happen to be more sizable adjustment and so I would normally characterize premium estimates as they happen all the time but the size of this one and what's happening in the market which probably may come in on, I would consider that a onetime adjustment and I think in fact going forward should be pretty marginal. Vincent DeAugustino – Keefe Bruyette & Woods Inc.: Okay, great. Thanks for all those color.

(Operator Instructions) Your next question comes from line of Sam Hoffman with Bluepress. You may proceed.

Good morning! Congratulations on the progress. I just have a question for Fred which is obviously you are getting a lot of improvements through the thinning which is reducing your volatility and also through pricing which is improving your margins. What is it going to take do you think, strategically to get your book of business kind of equivalent to the benchmarks, kind of traverse to having Berkeley who are kind of in the 95% combined ratios?

It's great question. I actually think we are right on-track. To me when you think about this three or four points additional improvement. It really is a combination of all three levers that we are pulling. I feel really good about what we have done with getting the mix of business a lot more attractive in the attractive segments and well some of its new, if we look at those and take the price on top of it, we are well on our way to get the margins in a sustainable place where they are much more significant. The volatility, again, a lot of what we are doing there is just it’s a historical thing. We have some geographies where we just have outsize concentrations and we didn't feel that we could get price that would be top core, top to the cycle and we will be able to get that and because of our momentum in the more attractive business and the price points we are getting, that's going to shift. I would also say that overtime in our commercial lines, because we have some additional expenses there from our building those businesses and setting it that we also have some expense leverage that will come over the next two years and our commercial lines will get us but if you look at the combination of all of those three, I feel really good about our ability to make a significant step forward in 2014 and then into 2015 to get the sustained returns because our mix is better, balanced in the right categories. We have a nice distinctive position. So, I am more confident than I have ever been because of this portfolio is in the right place and again, you guys, who follow us know a lot…

Okay. And my other question is can you talk a bit about what’s happening in the other commercial line specialty in terms of your growth, I know, you’re reducing some programs, but can you talk a bit about what you’re reducing, how it is going to improve margin going forward and then when you expect to resume growth?

I think it’s really been two parts right, it’s been contract surety that we have obviously resized in the run-off business, but it’s also and we mentioned a little bit last quarter, there were some targeted programs that we felt could not get to the returns to the cycle that we wanted. There was couple of wheels once and another one. But, so we acted on it. But, the vast majority of our specialty business is well positioned and frankly even in our program areas those that remain are in great place for getting price and we’re actually getting good market opportunities.

I would just amplify the last point that Fred made which is we’re seeing a lot of very good market opportunities and while you can’t see the ultimate numbers the kind of growth that really does exist underlying new opportunities there certainly is across the board, across the entire spectrum every business is well positioned and in fact, the new business pipeline and volumes and the pricing of that is all very attractive. That said, if you decompose that the professional and management and healthcare areas in particular just year-over-year our growing at a level that is very positive for us.

Okay. So, you guys are getting kind of 10%, 11%, 12%, 13% rate in those areas and yet the reductions are offsetting the growth for now.

And it’s lumpy, right, exactly. Obviously a couple of these programs if they’re $15 million or $20 million, I mentioned that we’re getting off, I think, this quarter was I think $20 million - $25 million this quarter. They come off in a long if you will.

Terrific thank you.

Thank you, Sam.

Your next question comes from the line of Matt Carletti with JMP Securities, you may proceed.

Hi Matt. Christine Worley – JMP Securities: HI, it’s actually Christine Worley for Matt.

Hi, Christine. Christine Worley – JMP Securities: Hi. I had a quick question about growth at Chaucer specifically in the UK motor line, we had been hearing that line was getting increasingly more competitive so I just wanted a little more color around the opportunity that you’re seeing there, I think, it was up about 30% in the quarter which is pretty strong growth?

Yes, I mean, we’re all seeing full back of the UK motor, but it’s from all time high and it was to be expected. The other thing that we are seeing the effect of now is the changes that we’ve seen in legislation particularly around LASPO, which is going to stop to see some changes around referral fees, legal costs etcetera. So, if anything the growth that we’re seeing now, is the -- premium growth particularly coming from last year, which was at higher levels of rates and we’re not seeing anything that we didn’t expect this year. So, we’re still relatively positive about UK motor. Some of the commentary you would have seen in the press around sort of comparing average prices a year ago to to-date tend to be at the topper end of the more extreme end of younger driver prices and the average premiums they’re quoting in those studies are lot higher than our portfolios we write at Chaucer..

So, what we as Bob is mentioning we got a lot of rate over the last two or three years, it has moderated to some extent because of the reform, our rate moderation is a lot less than what the market is taking because we’re kind of a specialty position and our experience there continues to be very strong. So, we’re feeling very good about the business, it’s not something we’re aggressive in or anything, a lot of it is earning and prior rate that is helping us. Christine Worley – JMP Securities: That makes lot of sense, thank you very much.

Thanks.

(Operator Instructions) There are no further questions in the queue at this time. I would now like to turn the call back over to Oksana Lukasheva for closing remarks, you may proceed.

Thanks to all of you for your participation today and we’re looking forward to speaking to you next quarter.

Thank you for participation in today’s conference, this concludes the presentation, you may now disconnect. Have a great day.