SPRINGFIELD, Ill., April 28 /PRNewswire-FirstCall/ -- Horace Mann
Educators Corporation (NYSE: HMN) today reported net income of
$22.6 million (55 cents per share) for the three months ended
March 31, 2010, compared to net
income of $13.4 million (33 cents per share) for the same period in 2009.
Included in net income were net realized gains on securities
of $4.9 million ($3.1 million after tax, or 7 cents per share) for the three months ended
March 31, 2010. In the first
quarter of 2009, net income included net realized investment losses
of $0.8 million ($0.6 million after tax, or 2 cents per share). All per-share amounts
are stated on a diluted basis.
"With the continuing stabilization of the financial markets in
the first quarter, our net unrealized investment gain position
continued to improve, with reported book value per share of
$19.84 increasing 75 percent over the
last twelve months," said Louis G.
Lower, President and Chief Executive Officer. "And, as
we begin another year, our underlying profit fundamentals remain
strong. Net income before realized investment gains and
losses was 48 cents per share for the
first quarter compared to 35 cents a
year ago, with the prior year quarter including a charge of
approximately 8 cents per share
related to our property and casualty claims office consolidation
and marketing transition initiatives. Within the current
quarter results, strong earnings from our annuity and life segments
more than offset a decrease in property and casualty earnings,"
continued Lower. "Catastrophe losses were higher this year,
as were sinkhole claims in Florida. The current accident year
combined ratio excluding catastrophes was approximately 95 percent
in the current quarter, which was about 1 percentage point higher
than the prior year, primarily reflecting the loss ratio increase.
Combined annuity and life segment net income increased
significantly in the first quarter compared to prior year,
primarily due to the positive impact of financial market
performance, growth in investment income and a notable improvement
in the interest margin."
"While the overall economy continues to present challenges,
Horace Mann's financial stability,
combined with our established position in the educator market, led
to stable levels of true new auto sales and new sales of our
proprietary annuity products in the quarter," said Lower.
"Looking to the remainder of 2010, we expect improvement in
new business levels as we build on the momentum we've established
to transform our distribution system to a new, more powerful
model."
Segment Earnings
The property and casualty segment recorded net income of
$11.0 million for the quarter, a
decrease of $1.4 million compared to
the same period in 2009. Pretax catastrophe costs in the
current quarter were $6.8 million
compared to $4.5 million incurred in
the first quarter of 2009. The first quarter 2010 property
and casualty combined ratio was 96.4 percent, including 5.0
percentage points due to catastrophe costs, compared to 94.6
percent, including 3.3 percentage points due to catastrophe costs,
in the prior year period. Favorable prior years' reserve
development totaling $4.5 million was
recorded in the first quarter, which represented 3.3 percentage
points on the combined ratio, compared to $3.4 million, or 2.5 percentage points on the
combined ratio, recorded in the first quarter of 2009. In the
first quarter of 2009, property and casualty pretax income was
reduced by $4.4 million due to
charges related to the company's claims office consolidation and
distribution initiatives.
Annuity segment net income was $7.3
million for the three months ended March 31, 2010, reflecting an increase of
$6.1 million compared to the same
period in 2009. In the current quarter, the positive
financial market performance had a favorable impact on both the
valuation of annuity deferred policy acquisition costs and the
level of guaranteed minimum death benefit reserves, and favorably
affected the level of charges and fees earned on variable contract
deposits in the quarter compared to prior year. In addition,
the interest margin earned on fixed annuity assets increased
significantly compared to a year earlier, with net interest spreads
reaching 1.90 percent for the current period, up 47 basis points
compared to the first quarter of 2009. Total annuity net fund
flows continued to be positive in the current period, as they were
throughout 2008 and 2009, with total accumulated account values
increasing 18 percent compared to a year earlier. Total cash
value persistency of 94 percent increased about 1 percentage point
compared to prior year.
Life segment net income of $4.6
million for the first quarter increased $1.2 million compared to the same period in 2009,
primarily due to growth in investment income. An increase in
mortality costs in the current period was offset by lower operating
expenses. Life persistency remained in excess of 94
percent.
Segment Revenues
The company's total premiums written and contract deposits
increased 8 percent compared to the three months ended March 31, 2009, primarily reflecting an increase
in annuity deposit receipts.
Total property and casualty premiums written increased 2 percent
for the current quarter, reflecting increases in average property
and auto premiums per policy.
Annuity deposits received increased 23 percent compared to the
three months ended March 31, 2009,
comprised of a 45 percent increase in single deposit and rollover
receipts and an 11 percent increase in scheduled, flexible premium
annuity deposit receipts. Life segment insurance premiums and
contract deposits decreased 1 percent compared to the prior year
period.
Sales and Distribution
For the first quarter of 2010, total new auto sales units
decreased 3 percent compared to the prior year, while true new auto
sales were comparable to the first three months of 2009.
Following growth of 50 percent in the first quarter of 2009,
total annuity sales decreased 9 percent in the current quarter
compared to prior year, largely driven by a decrease in sales of
third-party vendor products. Total new life production
decreased 14 percent compared to the prior year, also significantly
impacted by a decline in sales of third-party vendor products.
At March 31, 2010, there were 305
Horace Mann Exclusive Agencies, an increase of 55 compared to
December 31, 2009. The
company's Exclusive Agent opportunity was launched on January 1, 2009. Of the 305 Exclusive
Agencies at quarter-end, 182 were formed by previous Employee
Agents and 123 were formed by new appointments. "We are
encouraged by the continuing increases in the number of Exclusive
Agencies. This growth, coupled with the positive impact that
our new Agency Business Model is having on productivity and the
recent enhancements made to our field sales management structure,
bodes well for Horace Mann's future
growth prospects," said Lower. In addition to the Exclusive
Agencies, there were 379 Employee Agents at quarter-end.
Combined, there were 684 Exclusive Agencies and Employee
Agents at March 31, 2010, compared to
716 at December 31, 2009 and 675 at
March 31, 2009. "While we did
experience a decline in the total number of agencies and agents in
the first quarter -- a seasonal pattern that is not unusual for us
-- we expect increases over the remainder of the year to result in
a net growth in our year-end agency force compared to prior
year."
Investment Gains and Losses
In the first quarter of 2010, pretax net realized investment
gains were $4.9 million, which
included a $0.7 million
credit-related impairment write-down and less than $0.1 million of realized impairment losses on
securities that were disposed of during the quarter. The
impairment amounts were more than offset by $5.6 million of realized gains on other security
disposals.
Horace Mann's net unrealized
investment gains on fixed maturity and equity securities of
$101.7 million at March 31, 2010 continued to reflect improvement
compared to the net unrealized gain of $36.1
million at December 31, 2009
and the net unrealized loss of $359.6
million recorded at March 31,
2009. "The widespread improvement in the credit
markets has continued into 2010," said Lower. "And, the underlying
quality of our investment portfolio clearly has been evidenced in
our net income and book value results over the last 12 months."
Horace Mann -- the largest
national multiline insurance company focusing on educators'
financial needs -- provides auto and homeowners insurance,
retirement annuities, life insurance and other financial solutions.
Founded by Educators for Educators® in 1945,
the company is headquartered in Springfield, Ill. For more information,
visit www.horacemann.com.
Statements included in this news release that are not historical
in nature are forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995 and are subject to certain
risks and uncertainties. Horace Mann is not under any
obligation to (and expressly disclaims any such obligation to)
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Please
refer to the company's Annual Report on Form 10-K for the year
ended December 31, 2009 and the
company's past and future filings and reports filed with the
Securities and Exchange Commission for information concerning the
important factors that could cause actual results to differ
materially from those in forward-looking statements.
HORACE MANN
EDUCATORS CORPORATION
|
|
Digest of Earnings
and Highlights (Unaudited)
|
|
(Dollars in
Millions, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
%
Change
|
|
DIGEST OF EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
22.6
|
|
$
13.4
|
|
68.7%
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
0.58
|
|
$
0.34
|
|
70.6%
|
|
|
Diluted
|
|
$
0.55
|
|
$
0.33
|
|
66.7%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares
|
|
|
|
|
|
|
|
and equivalent shares (in
millions)
|
|
|
|
|
|
|
|
|
Basic
|
39.2
|
|
39.2
|
|
-
|
|
|
|
Diluted
|
40.9
|
|
40.4
|
|
1.2%
|
|
|
|
|
|
|
|
|
|
|
|
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance premiums written and
contract deposits
|
$
238.7
|
|
$
221.3
|
|
7.9%
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (A)
|
12.8%
|
|
1.9%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Property & Casualty GAAP combined
ratio
|
96.4%
|
|
94.6%
|
|
N.M.
|
|
Effect of catastrophe costs on the
Property & Casualty
|
|
|
|
|
|
|
|
combined ratio
|
5.0%
|
|
3.3%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Exclusive agencies (B)
|
305
|
|
91
|
|
235.2%
|
|
Employee agents (C)
|
379
|
|
584
|
|
-35.1%
|
|
|
Total
|
|
684
|
|
675
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Per Share
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
$
0.08
|
|
$
0.0525
|
|
52.4%
|
|
|
|
|
|
|
|
|
|
|
|
Book value (D)
|
$
19.84
|
|
$
11.35
|
|
74.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
6,597.2
|
|
$
5,526.3
|
|
19.4%
|
|
Short-term debt
|
38.0
|
|
38.0
|
|
-
|
|
Long-term debt
|
199.6
|
|
199.6
|
|
-
|
|
Total shareholders' equity
|
778.2
|
|
444.7
|
|
75.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N.M. - Not meaningful.
|
|
|
|
|
|
|
(A)
|
Based on trailing 12-month net income
and average quarter-end shareholders' equity.
|
|
|
(B)
|
Local Horace Mann agencies created and
owned by independent contractors who have signed Exclusive
Agent agreements with the Company ("Exclusive Agents"). The
agreement states that only the Company's products and limited
additional third-party vendor products authorized by the Company
will be marketed by the agency. An individual may sign
multiple Exclusive Agent agreements resulting in creation of
multiple Exclusive Agencies.
|
|
|
(C)
|
Agents who have employee status with
the Company and by contract market only the Company's products and
limited additional third-party vendor products authorized by the
Company.
|
|
|
(D)
|
Book value per share excluding the
fair value adjustment for investments was $18.29 at March 31, 2010
and $16.43 at March 31, 2009. Ending shares outstanding were
39,219,927 at March 31, 2010 and 39,169,009 at March 31,
2009.
|
|
|
|
|
|
|
|
- 1 -
|
|
|
|
|
|
|
|
|
|
|
|
HORACE MANN
EDUCATORS CORPORATION
|
|
Statements of
Operations and Supplemental GAAP Consolidated Data
(Unaudited)
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
2010
|
2009
|
|
%
Change
|
|
STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance premiums and contract
charges earned
|
$
166.4
|
$
162.5
|
|
2.4%
|
|
Net investment income
|
65.9
|
57.9
|
|
13.8%
|
|
Net realized investment gains
(losses)
|
4.9
|
(0.8)
|
|
N.M.
|
|
Other income
|
1.5
|
2.9
|
|
-48.3%
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
238.7
|
222.5
|
|
7.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits, claims and settlement
expenses
|
112.9
|
107.8
|
|
4.7%
|
|
Interest credited
|
35.6
|
33.7
|
|
5.6%
|
|
Policy acquisition expenses
amortized
|
20.1
|
23.0
|
|
-12.6%
|
|
Operating expenses
|
34.7
|
35.7
|
|
-2.8%
|
|
Amortization of intangible
assets
|
-
|
0.2
|
|
-100.0%
|
|
Interest expense
|
3.5
|
3.5
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total benefits, losses and
expenses
|
206.8
|
203.9
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
31.9
|
18.6
|
|
71.5%
|
|
|
Income tax expense
|
9.3
|
5.2
|
|
78.8%
|
|
|
|
|
|
|
|
|
|
Net income
|
$
22.6
|
$
13.4
|
|
68.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF PREMIUMS
WRITTEN
|
|
|
|
|
|
AND CONTRACT DEPOSITS
__
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property & Casualty
|
|
|
|
|
|
|
Automobile and property
(voluntary)
|
$
129.9
|
$
128.2
|
|
1.3%
|
|
|
Involuntary and other property &
casualty
|
1.3
|
0.9
|
|
44.4%
|
|
|
|
|
|
|
|
|
|
|
|
Total Property &
Casualty
|
131.2
|
129.1
|
|
1.6%
|
|
|
|
|
|
|
|
|
|
Annuity deposits
|
84.2
|
68.7
|
|
22.6%
|
|
|
|
|
|
|
|
|
|
Life
|
|
23.3
|
23.5
|
|
-0.9%
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
238.7
|
$
221.3
|
|
7.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF SEGMENT NET INCOME
(LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property & Casualty
|
$
11.0
|
$
12.4
|
|
-11.3%
|
|
|
|
|
|
|
|
|
|
Annuity
|
7.3
|
1.2
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
Life
|
|
4.6
|
3.4
|
|
35.3%
|
|
|
|
|
|
|
|
|
|
Corporate and other (A)
|
(0.3)
|
(3.6)
|
|
-91.7%
|
|
|
|
|
|
|
|
|
|
|
Net income
|
22.6
|
13.4
|
|
68.7%
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs, after tax, included
above (B)
|
(4.4)
|
(2.9)
|
|
51.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N.M. - Not meaningful.
|
|
|
(A)
|
The Corporate and Other segment
includes interest expense on debt and the impact of realized
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 4.
|
|
(B)
|
Includes allocated loss adjustment
expenses and catastrophe reinsurance reinstatement premiums.
See also page 3.
|
|
|
|
|
- 2 -
|
|
|
|
|
|
|
|
|
HORACE MANN
EDUCATORS CORPORATION
|
|
Supplemental
Business Segment Overview (Unaudited)
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
2010
|
2009
|
%
Change
|
|
PROPERTY & CASUALTY
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums written
|
|
$
131.2
|
$
129.1
|
1.6%
|
|
Premiums earned
|
|
137.7
|
135.0
|
2.0%
|
|
Net investment income
|
8.9
|
8.3
|
7.2%
|
|
Other income
|
|
-
|
1.4
|
-100.0%
|
|
Losses and loss adjustment expenses
(LAE)
|
98.4
|
93.6
|
5.1%
|
|
Operating expenses (includes
policy
|
|
|
|
|
|
acquisition expenses
amortized)
|
34.3
|
34.2
|
0.3%
|
|
Income before tax
|
13.9
|
16.9
|
-17.8%
|
|
Net
income
|
11.0
|
12.4
|
-11.3%
|
|
|
|
|
|
|
|
|
|
Net investment income, after
tax
|
7.6
|
7.0
|
8.6%
|
|
|
|
|
|
|
|
|
|
Catastrophe costs, after tax
(A)
|
4.4
|
2.9
|
51.7%
|
|
|
Catastrophe losses and LAE, before
tax
|
6.8
|
4.5
|
51.1%
|
|
|
Reinsurance reinstatement premiums,
before tax
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Operating statistics:
|
|
|
|
|
|
Loss and loss adjustment expense
ratio
|
71.5%
|
69.3%
|
N.M.
|
|
|
Expense ratio
|
24.9%
|
25.3%
|
N.M.
|
|
|
Combined ratio
|
96.4%
|
94.6%
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Effect on the combined ratio
of:
|
|
|
|
|
|
|
|
Catastrophe costs
|
5.0%
|
3.3%
|
N.M.
|
|
|
|
|
Claims office consolidation costs (all
in LAE)
|
-
|
2.3%
|
N.M.
|
|
|
|
|
|
|
|
|
|
Automobile and property
detail:
|
|
|
|
|
|
Premiums written (voluntary)
(B)
|
$
129.9
|
$
128.2
|
1.3%
|
|
|
|
Automobile
|
93.3
|
92.9
|
0.4%
|
|
|
|
Property
|
36.6
|
35.3
|
3.7%
|
|
|
|
|
|
|
|
|
|
|
Premiums earned (voluntary)
(B)
|
136.8
|
134.4
|
1.8%
|
|
|
|
Automobile
|
92.6
|
91.7
|
1.0%
|
|
|
|
Property
|
44.2
|
42.7
|
3.5%
|
|
|
|
|
|
|
|
|
|
|
Policies in force (voluntary) (in
thousands)
|
786
|
795
|
-1.1%
|
|
|
|
Automobile
|
525
|
532
|
-1.3%
|
|
|
|
Property
|
261
|
263
|
-0.8%
|
|
|
|
|
|
|
|
|
|
|
Policy renewal rate
(voluntary)
|
|
|
|
|
|
|
Automobile (6 months)
|
91.0%
|
91.1%
|
N.M.
|
|
|
|
Property (12 months)
|
88.9%
|
88.8%
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
Voluntary automobile operating
statistics:
|
|
|
|
|
|
|
Loss and loss adjustment expense
ratio
|
70.3%
|
70.6%
|
N.M.
|
|
|
|
Expense ratio
|
24.9%
|
25.8%
|
N.M.
|
|
|
|
Combined ratio
|
95.2%
|
96.4%
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Effect on the combined ratio
of:
|
|
|
|
|
|
|
|
Catastrophe costs
|
0.1%
|
0.5%
|
N.M.
|
|
|
|
|
Claims office consolidation costs (all
in LAE)
|
-
|
2.7%
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
Total property operating
statistics:
|
|
|
|
|
|
|
Loss and loss adjustment expense
ratio
|
73.6%
|
66.8%
|
N.M.
|
|
|
|
Expense ratio
|
25.2%
|
24.2%
|
N.M.
|
|
|
|
Combined ratio
|
98.8%
|
91.0%
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Effect on the combined ratio
of:
|
|
|
|
|
|
|
|
Catastrophe costs
|
15.3%
|
9.5%
|
N.M.
|
|
|
|
|
Claims office consolidation costs (all
in LAE)
|
-
|
1.5%
|
N.M.
|
|
|
|
|
|
|
|
|
|
Prior years' reserves favorable
(adverse)
|
|
|
|
|
|
development, pretax
|
|
|
|
|
|
|
Voluntary automobile
|
$
2.7
|
$
2.5
|
8.0%
|
|
|
|
Total property
|
1.8
|
0.4
|
N.M.
|
|
|
|
Other property and casualty
|
-
|
0.5
|
-100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
4.5
|
3.4
|
32.4%
|
|
|
|
|
|
|
|
|
N.M. - Not meaningful.
|
|
|
|
(A)
|
|
Includes allocated loss adjustment
expenses and catastrophe reinsurance reinstatement
premiums.
|
|
(B)
|
|
Amounts are net of additional ceded
premiums to reinstate the Company's property and casualty
catastrophe reinsurance coverage, if any, as quantified
above.
|
|
|
|
|
|
|
|
|
|
- 3 -
|
|
|
|
|
|
|
|
|
|
|
|
HORACE MANN
EDUCATORS CORPORATION
|
|
Supplemental
Business Segment Overview (Unaudited)
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
2010
|
2009
|
%
Change
|
|
ANNUITY
|
|
|
|
|
|
|
|
|
|
|
|
Contract deposits
|
$
84.2
|
$
68.7
|
22.6%
|
|
|
Variable
|
27.4
|
26.2
|
4.6%
|
|
|
Fixed
|
56.8
|
42.5
|
33.6%
|
|
Contract charges
earned
|
4.3
|
3.2
|
34.4%
|
|
Net investment income
|
40.4
|
34.8
|
16.1%
|
|
Net interest margin (without realized
investment gains and losses)
|
14.8
|
10.8
|
37.0%
|
|
Other income
|
0.9
|
0.8
|
12.5%
|
|
Mortality loss and other reserve
changes
|
(0.3)
|
(0.6)
|
-50.0%
|
|
Operating expenses (includes
policy
|
|
|
|
|
|
acquisition expenses
amortized)
|
8.6
|
12.5
|
-31.2%
|
|
Income before tax
|
11.1
|
1.7
|
N.M.
|
|
Net income
|
7.3
|
1.2
|
N.M.
|
|
|
|
|
|
|
|
|
Pretax income increase (decrease) due
to
|
|
|
|
|
|
valuation of:
|
|
|
|
|
|
|
Deferred policy acquisition
costs
|
$
1.2
|
$
(3.0)
|
N.M.
|
|
|
|
Guaranteed minimum death benefit
reserve
|
0.1
|
(0.5)
|
N.M.
|
|
|
|
|
|
|
|
|
Annuity contracts in force (in
thousands)
|
178
|
175
|
1.7%
|
|
Accumulated value on
deposit
|
$
3,811.7
|
$
3,221.8
|
18.3%
|
|
|
Variable
|
1,281.5
|
884.3
|
44.9%
|
|
|
Fixed
|
2,530.2
|
2,337.5
|
8.2%
|
|
Annuity accumulated value retention -
12 months
|
|
|
|
|
|
Variable accumulations
|
93.7%
|
93.1%
|
N.M.
|
|
|
Fixed accumulations
|
94.5%
|
93.9%
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFE
|
|
|
|
|
|
|
|
|
|
|
|
Premiums and contract
deposits
|
$
23.3
|
$
23.5
|
-0.9%
|
|
Premiums and contract charges
earned
|
24.4
|
24.3
|
0.4%
|
|
Net investment income
|
16.9
|
15.0
|
12.7%
|
|
Income before tax
|
7.1
|
5.4
|
31.5%
|
|
Net income
|
4.6
|
3.4
|
35.3%
|
|
|
|
|
|
|
|
|
Pretax income increase (decrease) due
to
|
|
|
|
|
|
valuation of:
|
|
|
|
|
|
|
Deferred policy acquisition
costs
|
$
(0.1)
|
$
(0.1)
|
-
|
|
|
|
|
|
|
|
|
Life policies in force (in
thousands)
|
212
|
220
|
-3.6%
|
|
Life insurance in force
|
$
13,754
|
$
13,651
|
0.8%
|
|
Lapse ratio - 12 months
|
|
|
|
|
|
(Ordinary life insurance)
|
5.2%
|
5.5%
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE AND OTHER (A)
|
|
|
|
|
|
|
|
|
|
|
|
Components of income (loss) before
tax:
|
|
|
|
|
|
Net realized investment gains
(losses)
|
$
4.9
|
$
(0.8)
|
N.M.
|
|
|
Interest expense
|
(3.5)
|
(3.5)
|
-
|
|
|
Other operating expenses, net
investment income and other income
|
(1.6)
|
(1.1)
|
45.5%
|
|
Loss before tax
|
|
(0.2)
|
(5.4)
|
-96.3%
|
|
Net loss
|
(0.3)
|
(3.6)
|
-91.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
N.M. - Not meaningful.
|
|
|
(A)
|
|
The Corporate and Other segment
includes interest expense on debt and the impact of realized
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.
|
|
|
|
|
|
|
- 4 -
|
|
|
|
|
|
|
|
|
|
HORACE MANN
EDUCATORS CORPORATION
|
|
Supplemental
Business Segment Overview (Unaudited)
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
2010
|
2009
|
%
Change
|
|
INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity and Life
|
|
|
|
|
|
Fixed maturities, at fair value
(amortized cost 2010, $3,559.0; 2009, $3,025.0)
|
$
3,638.0
|
$
2,713.9
|
34.1%
|
|
|
Equity securities, at fair value
(cost 2010, $31.5; 2009, $50.8)
|
31.6
|
31.4
|
0.6%
|
|
|
Short-term investments
|
149.0
|
300.7
|
-50.4%
|
|
|
Short-term investments, securities
lending collateral
|
-
|
-
|
-
|
|
|
Policy loans and other
|
117.8
|
110.1
|
7.0%
|
|
|
|
|
Total Annuity and Life
investments
|
3,936.4
|
3,156.1
|
24.7%
|
|
|
|
|
|
|
|
|
|
Property & Casualty
|
|
|
|
|
|
Fixed maturities, at fair value
(amortized cost 2010, $752.9; 2009, $681.6)
|
773.0
|
658.5
|
17.4%
|
|
|
Equity securities, at fair value (cost
2010, $18.0; 2009, $21.9)
|
20.5
|
15.9
|
28.9%
|
|
|
Short-term investments
|
13.4
|
43.8
|
-69.4%
|
|
|
Short-term investments, securities
lending collateral
|
-
|
-
|
-
|
|
|
|
|
Total Property & Casualty
investments
|
806.9
|
718.2
|
12.4%
|
|
|
|
|
|
|
|
|
|
Corporate investments
|
21.0
|
23.6
|
-11.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments
|
4,764.3
|
3,897.9
|
22.2%
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
Before tax
|
$
65.9
|
$
57.9
|
13.8%
|
|
|
After tax
|
44.7
|
39.1
|
14.3%
|
|
|
|
|
|
|
|
|
|
Net realized investment gains
(losses)
|
|
|
|
|
by investment portfolio included
in
|
|
|
|
|
Corporate and Other segment
loss
|
|
|
|
|
|
Property & Casualty
|
$
2.4
|
$
(8.2)
|
N.M.
|
|
|
Annuity
|
1.8
|
4.1
|
-56.1%
|
|
|
Life
|
0.7
|
3.3
|
-78.8%
|
|
|
Corporate and Other
|
-
|
-
|
-
|
|
|
|
Total, before tax
|
4.9
|
(0.8)
|
N.M.
|
|
|
|
Total, after tax
|
3.1
|
(0.6)
|
N.M.
|
|
|
|
|
Per share, diluted
|
$
0.07
|
$
(0.02)
|
N.M.
|
|
N.M. - Not meaningful.
|
|
- 5 -
|
|
|
|
|
|
|
|
|
HORACE MANN
EDUCATORS CORPORATION
|
|
Supplemental
Business Segment Overview (Unaudited)
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
|
|
|
|
March 31,
2010
|
|
2009
|
|
2009
|
|
2009
|
|
2009
|
|
|
|
|
|
Fair
|
|
Net
Unrealized
|
|
Net
Unrealized
|
|
Net
Unrealized
|
|
Net
Unrealized
|
|
Net
Unrealized
|
|
|
|
|
|
Value
|
|
Gain
(Loss)
|
|
Gain
(Loss)
|
|
Gain
(Loss)
|
|
Gain
(Loss)
|
|
Gain
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIXED MATURITY & EQUITY SECURITY
INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government and federally
sponsored agency bonds
|
$
389.5
|
|
$
(10.0)
|
|
$
(13.8)
|
|
$
2.0
|
|
$
(2.5)
|
|
$
3.4
|
|
|
Municipal bonds
|
902.7
|
|
28.9
|
|
22.8
|
|
56.1
|
|
6.3
|
|
(3.7)
|
|
|
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial institutions
|
289.6
|
|
14.1
|
|
8.1
|
|
6.9
|
|
(11.0)
|
|
(35.3)
|
|
|
|
Other
|
1,414.0
|
|
88.7
|
|
73.0
|
|
84.6
|
|
(14.3)
|
|
(140.1)
|
|
|
|
High yield
|
212.4
|
|
(1.8)
|
|
(5.9)
|
|
(11.8)
|
|
(26.4)
|
|
(28.0)
|
|
|
Foreign government bonds
|
49.1
|
|
2.8
|
|
2.0
|
|
3.0
|
|
0.7
|
|
(0.1)
|
|
|
Mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prime agency
|
487.2
|
|
17.6
|
|
18.3
|
|
23.9
|
|
18.5
|
|
21.2
|
|
|
|
Prime other
|
15.9
|
|
0.3
|
|
0.4
|
|
0.5
|
|
(0.8)
|
|
(0.2)
|
|
|
|
Sub-prime, Alt-A
|
0.5
|
|
(0.1)
|
|
(0.1)
|
|
(0.4)
|
|
(0.8)
|
|
(0.9)
|
|
|
Commercial mortgage-backed
securities
|
284.1
|
|
(51.5)
|
|
(67.5)
|
|
(71.7)
|
|
(106.6)
|
|
(115.8)
|
|
|
Asset-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub-prime, Alt-A
|
0.4
|
|
-
|
|
-
|
|
(0.5)
|
|
(0.3)
|
|
(0.1)
|
|
|
|
Collateralized debt obligations,
collateralized loan obligations
|
31.0
|
|
(1.9)
|
|
(4.1)
|
|
(3.3)
|
|
(4.0)
|
|
(4.7)
|
|
|
|
Other
|
274.8
|
|
12.0
|
|
8.2
|
|
4.5
|
|
(4.8)
|
|
(8.3)
|
|
|
Preferred stocks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial institutions
|
68.7
|
|
(1.3)
|
|
(6.4)
|
|
(9.5)
|
|
(19.7)
|
|
(34.2)
|
|
|
|
Other
|
41.4
|
|
2.8
|
|
0.3
|
|
(0.7)
|
|
(6.1)
|
|
(12.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fixed income
securities
|
4,461.3
|
|
100.6
|
|
35.3
|
|
83.6
|
|
(171.8)
|
|
(359.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stocks
|
1.8
|
|
1.1
|
|
0.8
|
|
0.5
|
|
0.5
|
|
(0.3)
|
|
Derivatives
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fixed maturity and equity
security investments
|
$
4,463.1
|
|
$
101.7
|
|
$
36.1
|
|
$
84.1
|
|
$
(171.3)
|
|
$
(359.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 6 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Horace Mann Educators Corporation