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Before I turn the call over to Fred, let me note that our earnings press release, statistical supplements and a complete slide presentation for today’s call are available in the investor’s section of our website at www.Hanover.com.Our prepared remarks and responses to your questions today, other than statements of historical fact include forward-looking statements such as our such as our guidance for segment income per share for 2012. 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 on forward-looking statements, and in this respect, refer you to the forward-looking statements 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 total segment income, after tax earnings per share, segment results excluding the impact of catastrophes and development, ex cap loss ratio, and accident year loss ratios among others. A reconciliation of these non-GAAP financial measures to the closest GAAP measures on a historical basis can be found in the press release or the statistical supplement which are posted on our website as I mentioned earlier. With those comments, I will turn the call over to Fred. Frederick H. Eppinger Thank you, Oksana, and good morning, everyone, and thanks for joining our call today. Our fourth quarter results represent a strong finish to an otherwise financially challenging year. Our performance in the quarter clearly reflected the benefits of our efforts to improve the quality and distinctiveness of our product portfolio. For the quarter, we generated a solid statement income of $45.2 million, or a dollar per diluted share, in line with our expectations in spite of the elevated level of global catastrophes. Losses from catastrophes this quarter totaled $56 million and included $38 million related to the floods in Thailand and $16 million from the late October snowstorm in the northeast.
For the year, even as we experienced the worst year of catastrophe losses in our company’s history of $362 million, or 10 points of our combined ratio, we generated modest after-tax segment earnings of $15 million. We are also pleased that our focus on risk management and our thoughtful approach to growth has enabled us to maintain a strong balance sheet.Despite this year’s challenges, we were able to grow book value by almost 3% to $56.24 at the year-end 2011 reaching the highest point in our company’s history. As I discussed at Investor Day, 2011 was a very challenging year for us and the industry given the severe weather and the economic pressure, but it was a year where we continued to make significant progress on improving the earnings power of the company and position it for excellent returns through the cycle. As a result of our significant investments, our product portfolio is now very attractive and each of our businesses is well positioned to capitalize on the changing market environment. We believe the quality of our new business today is as good as anyone in the industry and we can see real progress in all the key profitability levers, as we discussed with you on Investor Day. We also mentioned that we see 2012 as somewhat of a transitional year. While we believe our performance will significantly improve, as we discussed as we shared our 2012 outlook, we believe that it is prudent to assume that the more difficult weather trends we’ve seen will continue. Therefore, we are planning to take additional pricing and underwriting actions in 2012 to achieve our ultimate returns that will not be fully realized this year, but we are very optimistic about where we are and what we are now accomplishing in the marketplace around pricing, mixed management and profitable growth.
We are encouraged by our fourth quarter operating performance and by our financial results in the next cat basis. We continue to make progress toward our long-term target returns and to execute on our priorities. In particular, successfully raising rates while maintaining the quality of our business, enhancing our business mix by growing the more attractive lines and segments, engaging in targeted mix management and re-underwriting in certain lines and regions, successfully building out our new businesses and geographies, enhancing margin by reaching required scale and solidifying our shelf space and competitive position with the best independent agents and positioning ourselves for profitable growth.Read the rest of this transcript for free on seekingalpha.com