- Diversified business delivered net income of $12 million, or
$0.28 per share, and core earnings* of $18 million, or $0.44 per
share, for the third quarter with reported book value of $25.74 and
adjusted book value* of $35.57 at quarter end
- Net premiums earned and contract deposits up 3% and record net
premiums written and contract deposits* up 9%, reflecting continued
educator household acquisition momentum with sales growth in all
operating segments
- Strong core earnings contributions from Supplemental &
Group Benefits and Life & Retirement segments
- Total net investment income up 22%
- Continue to expect full-year 2023 EPS in range of
$1.20-$1.45
Horace Mann Educators Corporation (NYSE:HMN) today reported
financial results for the three months ended September 30,
2023:
($ in millions, except per share
amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
% Change
2023
2022
% Change
Total revenues
$
378.7
$
342.6
10.5
%
$
1,089.0
$
1,035.2
5.2
%
Net income
11.7
20.4
-42.6
%
5.5
36.5
-84.9
%
Net investment losses, after tax
(6.6
)
(10.1
)
N.M.
(23.4
)
(34.5
)
N.M.
Core earnings*
18.3
30.5
-40.0
%
28.9
71.0
-59.3
%
Adjusted core earnings*
21.3
33.8
-37.0
%
37.7
80.9
-53.4
%
Per diluted share:
Net income
0.28
0.49
-42.9
%
0.13
0.87
-85.1
%
Net investment losses, after tax
(0.16
)
(0.24
)
N.M.
(0.57
)
(0.82
)
N.M.
Core earnings per diluted share*
0.44
0.73
-39.7
%
0.70
1.69
-58.6
%
Adjusted core earnings per diluted
share*
0.51
0.81
-37.0
%
0.91
1.93
-52.8
%
Book value per share
25.74
26.69
-3.6
%
Adjusted book value per share*
35.57
37.03
-3.9
%
Tangible book value per share*
29.99
30.99
-3.2
%
N.M. - Not meaningful.
* These measures are not based on
accounting principles generally accepted in the United States of
America (non-GAAP). They are reconciled to the most directly
comparable GAAP measures in the Appendix to the Investor
Supplement. An explanation of these measures is contained in the
Glossary of Selected Terms included as an exhibit in the Company’s
reports filed with the Securities and Exchange Commission.
“We remain clearly focused on helping all educators protect what
they have today and prepare for a successful tomorrow. Our worksite
business also helps school district employers attract and retain
educators by providing more comprehensive benefits to their
employees,” said Horace Mann President & CEO Marita Zuraitis.
“Diversifying our business is positioning the company for the
highest level of earnings in our history while enhancing the value
we are delivering to shareholders. Our confidence in our ability to
achieve our long-term objective of expanding our share of the
education market and achieving sustainable double-digit ROEs
remains unchanged.
“Our diversified business offers investors a core small-cap
value holding that can deliver operational consistency, a solid
balance sheet, a compelling dividend and long-term value,” Zuraitis
added. “We are executing on our plan, with property and casualty
rate and non-rate underwriting actions well underway. We continue
to expect to deliver 2024 core return on equity near the 10%
level.”
Details of the company’s guidance and outlook are available in
the Q3 2023 investor presentation available at
investors.horacemann.com.
Reporting Segment Results
Horace Mann reports financial results in three reporting
segments: (1) Property & Casualty, (2) Life & Retirement,
and (3) Supplemental & Group Benefits. The retail business,
consisting of the Property & Casualty and Life & Retirement
segments, provides insurance and financial services to individual
educators through exclusive agents and direct capabilities. The
Supplemental & Group Benefits segment provides worksite direct
and employer-sponsored benefits through school district employers.
These worksite offerings help school districts attract and retain
staff.
Horace Mann adopted the Financial Accounting Standards Board’s
Accounting Standard Update 2018-12 Financial Services - Insurance:
Targeted Improvements to the Accounting for Long-Duration Contracts
as of January 1, 2023, with a January 1, 2021 transition date. The
company’s 2022 results have been recast to reflect the ASU and are
reflected in this release on that basis.
Property & Casualty segment results reflected higher
weather activity
(All comparisons vs. same period in 2022, unless noted
otherwise)
The Property & Casualty segment primarily markets private
passenger auto insurance and residential home insurance. Horace
Mann offers standard auto coverages, including liability, collision
and comprehensive. Property coverage includes both homeowners and
renters policies. For both auto and property coverage, Horace Mann
offers educators a discounted rate and the Educator Advantage®
package of features. The Property & Casualty segment
represented 47% of total revenues for the year ended 2022.
($ in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
Change
2023
2022
Change
Property & Casualty net premiums
written*
$
188.4
$
166.4
13.2
%
$
508.4
$
464.0
9.6
%
Property & Casualty net income (loss)
/
core earnings (loss)*
(11.3
)
(2.5
)
N.M.
(44.3
)
(19.4
)
N.M.
Property & Casualty combined ratio
116.6
%
107.5
%
9.1 pts
117.8
%
110.9
%
6.9 pts
Property & Casualty underlying loss
ratio*
73.3
%
69.3
%
4.0 pts
71.2
%
67.3
%
3.9 pts
Property & Casualty expense ratio
25.8
%
27.3
%
-1.5 pts
27.1
%
26.8
%
0.3 pts
Property & Casualty catastrophe
losses
17.5
%
9.6
%
7.9 pts
19.5
%
15.0
%
4.5 pts
Property & Casualty underlying
combined ratio*
99.1
%
96.6
%
2.5 pts
98.3
%
94.1
%
4.2 pts
Auto combined ratio
108.7
%
110.8
%
-2.1 pts
111.4
%
110.6
%
0.8 pts
Auto underlying loss ratio*
79.7
%
78.4
%
1.3 pts
80.6
%
77.0
%
3.6 pts
Property combined ratio
131.0
%
101.9
%
29.1 pts
129.4
%
111.6
%
17.8 pts
Property underlying loss ratio*
61.8
%
53.3
%
8.5 pts
54.1
%
50.1
%
4.0 pts
The Property & Casualty segment net loss for the third
quarter largely reflected the impact of elevated catastrophe and
non-catastrophe weather activity across the country. Property &
Casualty net premiums written were up 13.2% with average written
premiums rising for both property and auto. Segment net investment
income for the quarter was 50.0% above the prior year.
The third-quarter combined ratio increased 9.1 points over last
year, reflecting both the higher level of catastrophe losses this
year as well as an increase in non-catastrophe weather losses.
Catastrophe losses for the quarter were $28.7 million, pretax,
contributing 17.5 points to the combined ratio. In total, there
were 25 events designated as catastrophes by Property Claims
Services (PCS) in this year’s third quarter, including multiple
severe convective storms across the Midwest and South. In the third
quarter of 2022, catastrophe losses were $14.6 million, pretax,
contributing 9.6 points to the combined ratio, from 17 PCS
events.
The year-over-year increase in average written premiums for auto
policies improved again in the third quarter to 15.9%, compared to
11.4% in the second quarter and 8.1% in the first quarter. The
third-quarter auto underlying loss ratio was 79.7%, improving
sequentially from the second quarter as the benefit of rate and
non-rate underwriting actions begins to be seen.
The year-over-year increase in average written premiums for
property policies was 11.3% in the third quarter, as rate increases
taken over the past seven quarters and inflation adjustments to
coverage values continue to take effect. The third-quarter property
underlying loss ratio was 61.8%, reflecting a year-over-year
increase in weather losses not included in designated catastrophe
events.
Life & Retirement segment net income of $21
million
(All comparisons vs. same period in 2022, unless noted
otherwise)
The Life & Retirement segment markets 403(b) tax-qualified
fixed, fixed indexed and variable annuities; the Horace Mann
Retirement Advantage® open architecture platform for 403(b)(7) and
other defined contribution plans; and other retirement products to
educators as well as traditional term and whole life insurance
products. Horace Mann is one of the largest participants in the
K-12 educator portion of the 403(b) tax-qualified annuity market,
measured by 403(b) net premiums written on a statutory accounting
basis. The Life & Retirement segment represented 36% of total
revenues for the year ended 2022.
($ in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
Change
2023
2022
Change
Life & Retirement net income / core
earnings*
$
20.9
$
17.7
18.1
%
$
52.3
$
57.1
-8.4
%
Life & Retirement adjusted core
earnings*
21.0
17.9
17.3
%
52.5
57.7
-9.0
%
Life annualized sales*
2.2
2.2
—
%
6.6
6.2
6.5
%
Life mortality costs
15.9
17.6
-9.7
%
53.0
53.7
-1.3
%
Net annuity contract deposits*
125.6
108.1
16.2
%
347.6
324.3
7.2
%
Annuity assets under management(1)
4,938.2
4,694.6
5.2
%
Total assets under administration(2)
8,215.3
7,877.5
4.3
%
(1)
Amount reported as of September 30, 2023
excludes $653.6 million of assets under management held under
modified coinsurance reinsurance.
(2)
Includes Annuity AUM, Brokerage and
Advisory AUA, and Recordkeeping AUA.
Life & Retirement segment net income was $20.9 million for
the quarter. The annualized net interest spread in our fixed
annuity business rose to 251 basis points for the third quarter
compared to 193 basis points last year due to higher net investment
income. The net contribution from FHLB funding agreements remained
stable year over year although net investment income reflected
higher earnings from the floating rate investments backing the
program and interest credited similarly reflected offsetting higher
interest expense. For the segment, total benefit expenses rose as
the change in reserves more than offset lower mortality costs.
For the Retirement business, net annuity contract deposits were
up 16.2% to $125.6 million. Educators continue to begin their
relationship with Horace Mann through 403(b) retirement savings
products, including the company’s attractive annuity products,
which provide encouraging cross-sell opportunities. Total cash
value persistency was 91.7%, slightly below recent levels due to
activity in the non-qualified account portfolio. Life annualized
sales were $2.2 million for the quarter and lapse rates remained
consistent with prior year.
Horace Mann currently has $4.9 billion in annuity assets under
management, including $2.1 billion of fixed annuities, $2.3 billion
of variable annuities and $0.5 billion of fixed indexed annuities.
Assets under administration, which includes Horace Mann Retirement
Advantage® and other advisory and recordkeeping assets, increased
from a year ago as equity market recovery affected assets under
management. Life insurance in force rose to $20.4 billion at
September 30, 2023.
Supplemental & Group Benefits segment net income of $15.8
million
(All comparisons vs. same period in 2022, unless noted
otherwise)
The Supplemental & Group Benefits segment markets
employer-sponsored group solutions for districts and other public
employers, as well as worksite direct products typically
distributed through the employer channel. The worksite business
provides group term life, disability and specialty health insurance
along with supplemental products including cancer, heart, hospital,
supplemental disability and accident coverages. The Supplemental
& Group Benefits segment represented 21% of total revenues for
the year ended 2022.
($ in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
Change
2023
2022
Change
Supplemental & Group Benefits net
income /
core earnings*
$
15.8
$
20.7
-23.7
%
$
41.6
$
48.9
-14.9
%
Supplemental & Group Benefits
adjusted
core earnings*
18.7
23.8
-21.4
%
50.2
58.2
-13.7
%
Pretax profit margin(1)
28.5
%
36.7
%
-8.2 pts
24.6
%
27.7
%
-3.1 pts
Net premiums earned
$
63.5
$
68.2
-6.9
%
$
195.2
$
207.2
-5.8
%
Worksite direct products sales*
3.5
2.2
59.1
%
10.7
5.8
84.5
%
Employer-sponsored products sales*
4.6
2.2
109.1
%
10.0
5.8
72.4
%
Worksite direct products benefit ratio
27.8
%
25.4
%
2.4 pts
26.7
%
25.0
%
1.7 pts
Employer-sponsored products benefit
ratio
36.4
%
24.8
%
11.6 pts
43.1
%
44.6
%
-1.5 pts
(1) Measured to total revenues.
Supplemental & Group Benefits segment net income was $15.8
million for the quarter. The benefit ratio for the worksite direct
product line for the quarter continues to move toward the
longer-term target with utilization remaining well below historical
levels. The benefit ratio for the employer-sponsored product lines
for the quarter reflects seasonality, but increased from last
year’s unusually favorable results for this period, and remains in
line with expectations.
The non-cash impact of amortization of intangible assets under
purchase accounting reduced third quarter 2023 core earnings by
$3.6 million pretax vs. $4.0 million in 2022. Segment net
investment income was up 18.4% for the quarter.
Total sales for the segment were $8.1 million. Sales of worksite
direct supplemental products were up 59.1% to $3.5 million, with
persistency remaining strong at 90.5%. Sales of employer-sponsored
products were up 109.1% to $4.6 million, reflecting the progress
made in gaining more access to districts and schools through our
distribution partners and normal benefit-year seasonality.
Consolidated Results
The Corporate & Other segment reduced total revenues by
$56.1 million for the year ended 2022, largely due to net
investment losses. Interest expense was $7.5 million for the third
quarter of 2023 compared to $5.3 million for the third quarter of
2022 due to higher interest expense on the revolving credit
facility.
Net investment income of $119 million
(All comparisons vs. same period in 2022, unless noted
otherwise)
Horace Mann’s investment strategy is primarily focused on
generating income to support product liabilities, and balances
principal protection and risk. Total net investment income includes
net investment income on the investment portfolio managed by Horace
Mann, as well as accreted investment income on the deposit asset on
reinsurance related to the company’s reinsurance of policy
liabilities related to legacy individual annuities written in 2002
or earlier.
($ in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
Change
2023
2022
Change
Pretax net investment income - investment
portfolio
$
91.8
$
70.9
29.5
%
$
249.0
$
223.3
11.5
%
Pretax investment income - deposit
asset
on reinsurance
27.1
26.7
1.5
%
78.8
77.4
1.8
%
Total pretax net investment income
118.9
97.6
21.8
%
327.8
300.7
9.0
%
Pretax net investment losses
(8.4
)
(12.8
)
N.M
(29.7
)
(43.8
)
N.M.
Pretax net unrealized investment gains
(losses) on fixed
maturity securities
(680.0
)
(632.0
)
N.M.
Investment yield, excluding limited
partnership interests,
pretax - annualized
4.78
%
4.26
%
0.52 pts
4.68
%
4.32
%
0.36 pts
N.M. - Not meaningful.
Total net investment income rose 21.8% and net investment income
on the managed portfolio increased 29.5%. The increase reflected
the higher overall interest rate environment as well as overall
strong returns in our commercial mortgage loan funds and limited
partnership portfolios. Limited partnership portfolio contributions
were a significant factor in the higher net investment income in
the Property & Casualty and Life & Retirement segments.
Investment yield on the portfolio excluding limited partnership
interests was 4.78%, with new money yields continuing to exceed
portfolio yields in the core fixed maturity securities
portfolio.
The fixed maturity securities portfolio was in a net unrealized
investment loss position of $680 million pretax at September 30,
2023, primarily due to the elevated interest rate environment. Net
investment losses were $7 million after tax for the quarter.
Adjusted book value per share of $35.57 at quarter
end
At September 30, 2023, shareholders’ equity was $1.05 billion,
or $25.74 per share, as continued higher interest rates resulted in
net unrealized investment losses on fixed maturity securities.
Excluding the unrealized losses and effect of net reserve
remeasurements attributable to discount rates*, shareholders’
equity was $1.45 billion, or $35.57 per share*. During the third
quarter, Horace Mann repurchased 33,000 shares at an average price
of $28.73. As of September 30, 2023, $34.9 million remained
authorized for future repurchases under the share repurchase
program.
At September 30, 2023, total debt was $546.1 million, reflecting
$300.0 million of 7.25% senior notes issued on September 15, 2023.
The net proceeds from the sale of the 2028 Senior Notes were used
to fully repay the $249.0 million balance on the company’s
revolving credit facility. The ratio of debt-to-capital excluding
net unrealized investment gains/losses and effect of net reserve
remeasurements attributable to discount rates* was 27.3% at
September 30, 2023, which aligns with levels appropriate for the
company’s current financial strength ratings.
Quarterly webcast
Horace Mann’s senior management will discuss the company’s
third-quarter financial results with investors on November 3, 2023
at 11:00 a.m. Eastern Time. The conference call will be webcast
live at investors.horacemann.com and archived later in the day for
replay.
About Horace Mann
Horace Mann Educators Corporation (NYSE: HMN) is the largest
financial services company focused on helping America’s educators
and others who serve the community achieve lifelong financial
success. The company offers individual and group insurance and
financial solutions tailored to the needs of the educational
community. Founded by Educators for Educators® in 1945, Horace Mann
is headquartered in Springfield, Illinois. For more information,
visit horacemann.com.
Safe Harbor Statement and Non-GAAP Measures
Certain statements included in this news release, including
those regarding our earnings outlook, expected catastrophe losses,
our investment strategies, our plans to implement additional rate
actions, our plans relating to share repurchases and dividends, our
efforts to enhance customer experience and expand our products and
solutions to more educators, our strategies to create sustainable
long-term growth and double-digit ROEs, our strategy to achieve a
larger share of the education market, and other business
strategies, constitute forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements are made based on management’s
current expectations and beliefs concerning future developments and
their potential effects upon Horace Mann and its subsidiaries.
Horace Mann cautions investors that such statements are subject to
risks and uncertainties, many of which are difficult to predict and
generally beyond Horace Mann’s control, that could cause actual
results to differ materially from those expressed in, or implied or
projected by, the forward-looking statements included in this
document. Certain important factors that could cause actual results
to differ, possibly materially, from expectations or estimates
reflected in such forward-looking statements can be found in the
“Risk Factors” and “Forward-Looking Information” sections included
in Horace Mann’s Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q filed with the Securities and Exchange Commission
(SEC). The forward-looking statements herein are subject to the
risk, among others, that we will be unable to execute our strategy
because of market or competitive conditions or other factors.
Horace Mann does not undertake to update any particular
forward-looking statement included in this document if we later
become aware that such statement is not likely to be achieved.
Information contained in this news release include measures
which are based on methodologies other than accounting principles
generally accepted in the United States of America (GAAP).
Reconciliations of non-GAAP measures to the closest GAAP measures
are contained in the Appendix to the Investor Supplement and
additional descriptions of the non-GAAP measures are contained in
the Glossary of Selected Terms included as an exhibit to Horace
Mann’s SEC filings.
HORACE MANN EDUCATORS
CORPORATION
Financial Highlights
(Unaudited)
($ in millions, except per share
data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
% Change
2023
2022
% Change
Earnings Summary
Net income
$
11.7
$
20.4
-42.6
%
$
5.5
$
36.5
-84.9
%
Net investment losses, after tax
(6.6
)
(10.1
)
N.M.
(23.4
)
(34.5
)
N.M.
Core earnings*
18.3
30.5
-40.0
%
28.9
71.0
-59.3
%
Adjusted core earnings*
21.3
33.8
-37.0
%
37.7
80.9
-53.4
%
Per diluted share:(1)
Net income
$
0.28
$
0.49
-42.9
%
$
0.13
$
0.87
-85.1
%
Net investment losses, after tax
(0.16
)
(0.24
)
N.M.
(0.57
)
(0.82
)
N.M.
Core earnings*
0.44
0.73
-39.7
%
0.70
1.69
-58.6
%
Adjusted core earnings*
0.51
0.81
-37.0
%
0.91
1.93
-52.8
%
Weighted average number of shares and
equivalent
shares (in millions) - Diluted
41.4
41.6
-0.5
%
41.4
41.9
-1.2
%
Return on Equity
Net income return on equity - LTM(2)
(1.0
)%
6.3
%
(1.0
)%
6.3
%
Net income return on equity -
annualized
4.3
%
7.1
%
0.7
%
3.8
%
Core return on equity - LTM*(3)
1.8
%
7.8
%
1.8
%
7.8
%
Core return on equity - annualized*
5.0
%
8.1
%
2.6
%
6.2
%
Adjusted core return on equity -
LTM*(4)
2.6
%
8.6
%
2.6
%
8.6
%
Adjusted core return on equity -
annualized*
5.9
%
8.9
%
3.4
%
7.1
%
Financial Position
Per share:(5)
Book value
$
25.74
$
26.69
-3.6
%
Effect of net unrealized investment
(losses) on
fixed maturity securities
(13.10
)
(12.14
)
N.M.
Per share impact of net reserve
remeasurements attributable to discount
rates*
3.27
1.80
N.M.
Adjusted book value*
$
35.57
$
37.03
-3.9
%
Dividends paid
$
0.33
$
0.32
3.1
%
$
0.99
$
0.96
3.1
%
Ending number of shares outstanding (in
millions)(5)
40.8
40.9
-0.2
%
Total assets
$
13,412.5
$
13,166.6
1.9
%
Short-term debt
—
249.0
-100.0
%
Long-term debt
546.1
248.9
119.4
%
Total shareholders’ equity
1,051.3
1,092.3
-3.8
%
N.M. - Not meaningful.
(1)
Calculated using basic shares when in a
net loss or core loss position.
(2)
Based on last twelve months net income and
average quarter-end shareholders’ equity.
(3)
Based on last twelve months core earnings
and average quarter-end shareholders’ equity which has been
adjusted to exclude the fair value adjustment for investments, net
of the related impact on deferred policy acquisition costs and
applicable deferred taxes.
(4)
Based on last twelve months adjusted core
earnings and average quarter-end shareholders’ equity which has
been adjusted to exclude the fair value adjustment for investments,
net of the related impact on deferred policy acquisition costs and
applicable deferred taxes.
(5)
Ending shares outstanding were 40,835,262
at September 30, 2023 and 40,898,170 at September 30, 2022.
HORACE MANN EDUCATORS
CORPORATION
Consolidated Statements of
Operations and Data (Unaudited)
($ in millions, except per share
data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
Change
2023
2022
Change
Consolidated Statements of
Operations
Net premiums and contract charges
earned
$
266.0
$
257.4
3.3
%
$
782.6
$
768.6
1.8
%
Net investment income
118.9
97.6
21.8
%
327.8
300.7
9.0
%
Net investment losses
(8.4
)
(12.8
)
N.M.
(29.7
)
(43.8
)
N.M.
Other income
2.2
0.4
N.M.
8.3
9.7
-14.4
%
Total revenues
378.7
342.6
10.5
%
1,089.0
1,035.2
5.2
%
Benefits, claims and settlement
expenses
199.2
167.1
19.2
%
587.6
545.7
7.7
%
Interest credited
52.7
44.8
17.6
%
152.1
125.9
20.8
%
Operating expenses
75.7
75.6
0.1
%
235.6
229.4
2.7
%
DAC amortization expense
26.3
22.2
18.5
%
75.4
65.7
14.8
%
Intangible asset amortization expense
3.7
4.2
-11.9
%
11.1
12.6
-11.9
%
Interest expense
7.5
5.3
41.5
%
21.1
13.5
56.3
%
Total benefits, losses and expenses
365.1
319.2
14.4
%
1,082.9
992.8
9.1
%
Income before income taxes
13.6
23.4
-41.9
%
6.1
42.4
-85.6
%
Income tax expense
1.9
3.0
-36.7
%
0.6
5.9
-89.8
%
Net income
$
11.7
$
20.4
-42.6
%
$
5.5
$
36.5
-84.9
%
Net Premiums Written and Contract
Deposits*
Property & Casualty
$
188.4
$
166.4
13.2
%
$
508.4
$
464.0
9.6
%
Life & Retirement
154.8
138.0
12.2
%
432.8
408.0
6.1
%
Supplemental & Group Benefits
63.7
68.3
-6.7
%
196.1
206.8
-5.2
%
Total
$
406.9
$
372.7
9.2
%
$
1,137.3
$
1,078.8
5.4
%
Segment Net Income (Loss)
Property & Casualty
$
(11.3
)
$
(2.5
)
N.M.
$
(44.3
)
$
(19.4
)
-128.4
%
Life & Retirement
20.9
17.7
18.1
%
52.3
57.1
-8.4
%
Supplemental & Group Benefits
15.8
20.7
-23.7
%
41.6
48.9
-14.9
%
Corporate & Other(1)
(13.7
)
(15.5
)
11.6
%
(44.1
)
(50.1
)
12.0
%
Consolidated net income
$
11.7
$
20.4
-42.6
%
$
5.5
$
36.5
-84.9
%
Net investment losses
Before tax
$
(8.4
)
$
(12.8
)
N.M.
$
(29.7
)
$
(43.8
)
N.M.
After tax
(6.6
)
(10.1
)
N.M.
(23.4
)
(34.5
)
N.M.
Per share, diluted
$
(0.16
)
$
(0.24
)
N.M.
$
(0.57
)
$
(0.82
)
N.M.
N.M. - Not meaningful.
(1)
Corporate & Other includes interest
expense on debt and the impact of net investment gains and losses
and other Corporate level items. The Company does not allocate the
impact of corporate level transactions to the insurance segments
consistent with how management evaluates the results of those
segments. See detail for this segment on page 11.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
% Change
2023
2022
% Change
Property & Casualty
Net premiums written*
$
188.4
$
166.4
13.2
%
$
508.4
$
464.0
9.6
%
Net premiums earned
164.3
152.4
7.8
%
474.1
452.5
4.8
%
Net investment income
12.0
8.0
50.0
%
26.6
22.9
16.2
%
Other income
0.8
0.7
14.3
%
2.3
2.7
-14.8
%
Losses and loss adjustment expenses
(LAE)
149.2
122.3
22.0
%
430.0
380.8
12.9
%
Operating expenses (includes
amortization
expense)
42.5
41.6
2.2
%
128.5
121.1
6.1
%
Loss before income taxes
(14.6
)
(2.8
)
N.M.
(55.5
)
(23.8
)
-133.2
%
Net loss / core loss*
(11.3
)
(2.5
)
N.M.
(44.3
)
(19.4
)
-128.4
%
Net investment income, after tax
9.7
6.8
42.6
%
21.9
19.4
12.9
%
Catastrophe losses
After tax
22.7
11.5
97.4
%
73.2
53.4
37.1
%
Before tax
28.7
14.6
96.6
%
92.6
67.6
37.0
%
Prior years’ reserve development, before
tax(1)
Auto
—
2.0
N.M.
—
14.0
N.M.
Property and other
—
—
N.M.
—
(6.0
)
N.M.
Total
—
2.0
N.M.
—
8.0
N.M.
Operating statistics:
Loss and loss adjustment expense ratio
90.8
%
80.2
%
10.6 pts
90.7
%
84.1
%
6.6 pts
Expense ratio
25.8
%
27.3
%
-1.5 pts
27.1
%
26.8
%
0.3 pts
Combined ratio
116.6
%
107.5
%
9.1 pts
117.8
%
110.9
%
6.9 pts
Effect on the combined ratio of:
Catastrophe losses
17.5
%
9.6
%
7.9 pts
19.5
%
15.0
%
4.5 pts
Prior years’ reserve development(1)
—
%
1.3
%
-1.3 pts
—
%
1.8
%
-1.8 pts
Combined ratio excluding the effects
of
catastrophe losses and prior years’
reserve
development (underlying combined
ratio)*
99.1
%
96.6
%
2.5 pts
98.3
%
94.1
%
4.2 pts
Risks in force (in thousands)
528
540
-2.2
%
Auto(2)
360
368
-2.2
%
Property
168
172
-2.3
%
Household Retention - LTM
Auto(3)
86.4
%
86.9
%
-0.5 pts
Property(3)
90.0
%
89.5
%
0.5 pts
N.M. - Not meaningful.
(1)
(Favorable) unfavorable.
(2)
Includes assumed risks in force of 4.
(3)
Retention is based on retained households.
History has been restated to reflect this change.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
Change
2023
2022
Change
Life & Retirement
Net premiums written and contract
deposits*
$
154.8
$
138.0
12.2
%
$
432.8
$
408.0
6.1
%
Net premiums and contract charges
earned
38.2
36.8
3.8
%
113.3
108.9
4.0
%
Net investment income
96.9
81.4
19.0
%
274.1
254.0
7.9
%
Other income
3.7
4.1
-9.8
%
12.1
13.4
-9.7
%
Death benefits / mortality cost(1)
15.9
17.6
-9.7
%
53.0
53.7
-1.3
%
Interest credited
51.7
44.4
16.4
%
149.4
125.2
19.3
%
Change in reserves
14.6
10.5
39.0
%
38.0
37.4
1.6
%
Operating expenses
23.7
24.1
-1.7
%
72.7
74.6
-2.5
%
DAC amortization expense
7.5
6.0
25.0
%
21.9
17.1
28.1
%
Intangible asset amortization expense
0.1
0.2
-50.0
%
0.2
0.8
-75.0
%
Income before income taxes
25.3
19.5
29.7
%
64.3
67.5
-4.7
%
Income tax expense
4.4
1.8
144.4
%
12.0
10.4
15.4
%
Net income / core earnings*
20.9
17.7
18.1
%
52.3
57.1
-8.4
%
Adjusted core earnings*
21.0
17.9
17.3
%
52.5
57.7
-9.0
%
Life policies in force (in thousands)
162
162
—
%
Life insurance in force
$
20,351
$
19,815
2.7
%
Lapse ratio - 12 months(1)
4.1
%
4.0
%
0.1 pts
Annuity contracts in force (in
thousands)
223
227
-1.8
%
Horace Mann Retirement Advantage®
contracts in
force (in thousands)
19
16
18.8
%
Total Persistency - LTM
91.7
%
94.0
%
-2.3 pts
N.M. - Not meaningful.
(1)
Ordinary life insurance.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
Change
2023
2022
Change
Supplemental & Group
Benefits
Net premiums and contract charges
earned
$
63.5
$
68.2
-6.9
%
$
195.2
$
207.2
-5.8
%
Net investment income
10.3
8.7
18.4
%
28.5
25.4
12.2
%
Other income
(3.1
)
(5.2
)
40.4
%
(8.2
)
(8.4
)
2.4
%
Benefits, settlement expenses and change
in reserves
19.5
16.7
16.8
%
66.6
73.8
-9.8
%
Interest credited
1.0
0.4
150.0
%
2.7
0.7
N.M.
Operating expenses (includes DAC
amortization expense)
26.4
24.4
8.2
%
82.3
76.0
8.3
%
Intangible asset amortization expense
3.6
4.0
-10.0
%
10.9
11.8
-7.6
%
Income before income taxes
20.2
26.2
-22.9
%
53.0
61.9
-14.4
%
Net income / core earnings*
15.8
20.7
-23.7
%
41.6
48.9
-14.9
%
Adjusted core earnings*
18.7
23.8
-21.4
%
50.2
58.2
-13.7
%
Benefit ratio(1)
32.3
%
25.1
%
7.2 pts
35.5
%
35.9
%
-0.4 pts
Operating expense ratio(2)
37.3
%
33.9
%
3.4 pts
38.2
%
33.9
%
4.3 pts
Pretax profit margin(3)
28.5
%
36.7
%
-8.2 pts
24.6
%
27.7
%
-3.1 pts
Worksite Direct products benefit ratio
27.8
%
25.4
%
2.4 pts
26.7
%
25.0
%
1.7 pts
Worksite Direct premium persistency
(rolling 12 months)
90.5
%
91.3
%
-0.8 pts
90.5
%
91.3
%
-0.8 pts
Employer-sponsored products benefit
ratio
36.4
%
24.8
%
11.6 pts
43.1
%
44.6
%
-1.5 pts
N.M. - Not meaningful.
(1)
Ratio of benefits to net premiums
earned.
(2)
Ratio of operating expenses to total
revenues.
(3)
Ratio of income before taxes to total
revenues.
($ in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
Change
2023
2022
Change
Corporate & Other(1)
Components of loss before tax:
Net investment losses
$
(8.4
)
$
(12.8
)
N.M.
$
(29.7
)
$
(43.8
)
N.M.
Interest expense
(7.5
)
(5.3
)
-41.5
%
(21.1
)
(13.5
)
-56.3
%
Other operating expenses, net investment
income
and other income
(1.4
)
(1.4
)
—
%
(4.9
)
(5.9
)
16.9
%
Loss before income taxes
(17.3
)
(19.5
)
11.3
%
(55.7
)
(63.2
)
11.9
%
Net loss
(13.7
)
(15.5
)
11.6
%
(44.1
)
(50.1
)
12.0
%
Core loss*
(7.1
)
(5.4
)
-31.5
%
(20.7
)
(15.6
)
-32.7
%
N.M. - Not meaningful.
(1)
The Corporate & Other segment includes
interest expense on debt and the impact of investment gains and
losses and other corporate level items. The Company does not
allocate the impact of corporate level transactions to the
insurance segments consistent with how management evaluates the
results of those segments.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
% Change
2023
2022
% Change
Investments
Life & Retirement
Fixed maturity securities, at fair value
(amortized
cost, net 2023, $4,325.7; 2022,
$4,542.0)
$
3,795.9
$
4,052.8
-6.3
%
Equity securities, at fair value
55.3
90.1
-38.6
%
Short-term investments
29.2
19.7
48.2
%
Policy loans
140.4
139.0
1.0
%
Limited partnership interests
823.5
708.6
16.2
%
Other investments
74.2
54.7
35.6
%
Total Life & Retirement
investments
4,918.5
5,064.9
-2.9
%
Property & Casualty
Fixed maturity securities, at fair value
(amortized
cost, net 2023, $607.3; 2022, $590.4)
552.6
540.7
2.2
%
Equity securities, at fair value
15.8
15.7
0.6
%
Short-term investments
46.0
5.3
N.M.
Limited partnership interests
196.9
192.2
2.4
%
Other investments
1.0
1.0
—
%
Total Property & Casualty
investments
812.3
754.9
7.6
%
Supplemental & Group Benefits
Fixed maturity securities, at fair value
(amortized
cost, net 2023, $708.4; 2022, $771.7)
612.9
678.6
-9.7
%
Equity securities, at fair value
4.9
7.0
-30.0
%
Short-term investments
37.4
22.6
65.5
%
Policy loans
0.9
0.8
12.5
%
Limited partnership interests
122.2
96.7
26.4
%
Other investments
8.2
7.6
7.9
%
Total Supplemental & Group Benefits
investments
786.5
813.3
-3.3
%
Corporate & Other
Fixed maturity securities, at fair value
(amortized
cost, net 2023, $0.2; 2022, $0.0)
0.2
—
N.M.
Equity securities, at fair value
1.0
1.0
—
%
Short-term investments
0.9
3.9
-76.9
%
Total Corporate & Other
investments
2.1
4.9
-57.1
%
Total investments
$
6,519.4
$
6,638.0
-1.8
%
Net investment income - investment
portfolio
Before tax
$
91.8
$
70.9
29.5
%
$
249.0
$
223.3
11.5
%
After tax
72.8
56.5
28.8
%
197.6
177.7
11.2
%
Investment income - deposit asset on
reinsurance
Before tax
$
27.1
26.7
1.5
%
$
78.8
77.4
1.8
%
After tax
21.4
21.0
1.9
%
62.2
61.1
1.8
%
N.M. - Not meaningful.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102393154/en/
Heather J. Wietzel, Vice President, Investor Relations
217-788-5144 | investorrelations@horacemann.com
Grafico Azioni Horace Mann Educators (NYSE:HMN)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Horace Mann Educators (NYSE:HMN)
Storico
Da Gen 2024 a Gen 2025
