SPRINGFIELD, Ill., Feb. 7, 2012 /PRNewswire/ -- Horace Mann
Educators Corporation (NYSE: HMN) today reported net income of
$33.2 million (80 cents per share) and $70.5 million ($1.70 per share) for the three and twelve months
ended December 31, 2011,
respectively, compared to net income of $15.2 million (36
cents per share) and $80.9
million ($1.97 per share) for
the same periods in 2010. Included in net income were net
realized investment gains of $5.0
million ($3.3 million after
tax, or 8 cents per share) and
$37.7 million ($24.4 million after tax, or 59 cents per share) for the three and twelve
months ended December 31, 2011,
respectively. In 2010, net income included net realized
investment losses on securities of $1.5
million ($0.9 million after
tax, or 3 cents per share) for the
fourth quarter and realized gains of $23.8
million ($15.4 million after
tax, or 37 cents per share) for the
full year. All per-share amounts are stated on a diluted
basis.
"Horace Mann's net income before
realized investment gains and losses was 72
cents per share for the fourth quarter, a 33 cent increase compared to the prior year,
primarily due to improved property and casualty segment earnings,"
said Peter H. Heckman, President and
Chief Executive Officer. "The total property and casualty
accident year combined ratio excluding catastrophes of 92.5 percent
in the current quarter was 7.2 percentage points lower than the
same period in 2010, primarily driven by improved property loss
experience which was partially offset by an increase in the auto
loss ratio. The full year 2011 property and casualty accident
year combined ratio excluding catastrophes of 92.9 percent was 2.9
percentage points lower than prior year, also primarily reflecting
improved underlying results in the property line. While
catastrophe losses for full year 2011 reached a record level for
Horace Mann, current quarter
catastrophe losses were less than the prior year and were
comparable to our fourth quarter average for recent years."
Continued Heckman, "Over the last three months, improved
earnings in each of our operating segments and the increase in our
net unrealized investment gain position resulted in a December 31, 2011 reported book value per share
of $27.33, a sequential increase of 3
percent over the prior quarter-end."
"We estimate full-year 2012 net income before realized
investment gains and losses of between $1.80
and $2.00 per share. This projection builds on our
solid underlying earnings in 2011 and anticipates an improvement of
approximately 8 to 10 points in our property and casualty combined
ratio driven by improved underlying results in our property line as
well as a substantial decrease in catastrophe losses compared to
2011," said Heckman. "We expect that our combined annuity and
life earnings will be comparable to 2011, with a modest decline in
fixed annuity spreads offset by growth in assets under management
and an 8 to 10 percent increase in the S&P 500 Index."
Segment Earnings
The property and casualty segment recorded net income of
$17.4 million for the quarter, an
increase of $11.4 million compared to
the same period in 2010. The fourth quarter 2011 property and
casualty combined ratio was 92.5 percent, including 3.4 percentage
points due to catastrophe costs, compared to 101.7 percent, which
included 6.3 percentage points due to catastrophe costs, in the
prior year period. Favorable prior years' reserve development
totaling $4.6 million was recorded in
the fourth quarter of 2011, which represented 3.4 percentage points
on the combined ratio, compared to $5.9
million, or 4.2 percentage points on the combined ratio,
recorded in the fourth quarter of 2010. Excluding claim
settlement expenses, Florida
sinkhole losses incurred in the current quarter were minimal, which
represented a significant decrease compared to prior quarters.
For full year 2011, the total property and casualty combined
ratio was 106.7 percent, an increase of 5.8 percentage points
compared to the prior year, including a 6.9 percentage point
increase in the impact of catastrophe losses and a 1.8 percentage
point smaller benefit from favorable prior years' reserve
development.
Annuity segment net income was $10.9
million and $31.4 million for
the three and twelve months ended December
31, 2011, respectively, increasing $2.0 million, or 22.5 percent, for the quarter
and decreasing $0.2 million year to
date compared to the respective prior year periods. Excluding
the impacts from the evaluation of deferred policy acquisition
costs and the change in guaranteed minimum death benefit reserves,
underlying annuity segment earnings increased $2.5 million for the quarter and $3.6 million for the full year. The
interest margin earned on fixed annuity assets increased 21 percent
and 12 percent compared to the three and twelve months ended
December 31, 2010, respectively, with
a full year net interest spread of 202 basis points for the current
period, 6 basis points higher than full year 2010. Charges
and fees earned, primarily on variable annuity contracts, also
increased compared to both prior year periods. Total annuity
net fund flows continued to be positive, with total accumulated
account values increasing 5 percent compared to a year ago.
Total cash value persistency of 94 percent was comparable to
a year earlier.
Life segment net income of $5.5
million for the fourth quarter increased $1.0 million compared to the same period in 2010,
reflecting improvements in both investment income and mortality
costs. For the full year, life segment net income of
$19.0 million decreased $1.2 million from 2010, primarily due to higher
mortality costs in 2011. Life persistency remained strong at
95 percent.
Segment Revenues
Compared to 2010, the company's total premiums written and
contract deposits increased 3 percent for both the quarter and full
year, driven by the increases in annuity deposit receipts for each
period.
Total property and casualty premiums written decreased 1 percent
and 2 percent compared to the three and twelve months ended
December 31, 2010, with increases in
average property and auto premiums per policy more than offset by a
reduced level of policies in force.
Annuity deposits received increased 8 percent and 10 percent
compared to the fourth quarter and full year 2010, respectively,
each reflecting double digit increases in single deposit and
rollover receipts, partially offset by modest decreases in
scheduled, flexible premium annuity deposit receipts compared to
the prior year periods. Life segment insurance premiums and
contract deposits were comparable to the fourth quarter of 2010 and
decreased 1 percent compared to full year 2010.
Sales and Distribution
For the three months ended December 31,
2011, true new auto units, units associated with new
Horace Mann auto policyholders,
increased 26 percent compared to the prior year, resulting in a
full year increase of 1 percent. Total new auto sales units,
including a decline in additional vehicles added to existing auto
policies, increased 10 percent compared to the fourth quarter of
2010 and decreased 2 percent compared to full year 2010.
Total annuity sales increased 17 percent and 21 percent
compared to the prior fourth quarter and full year, respectively,
building on the positive results produced throughout 2010, led by a
22 percent increase in single premium and rollover deposits
accompanied by a 12 percent increase in new scheduled deposit
business. "These sales results for our lead lines of business
continue to be encouraging. The sustained positive growth
momentum in annuity new business levels pushed 2011 to a new
record, with agent training and marketing programs focused on
retirement planning contributing to this result. In the auto
line, state-specific pricing, underwriting and marketing
initiatives -- designed to increase new policy sales -- positively
impacted our results in both the third and fourth quarters of 2011.
We expect to see continued benefits of these initiatives in
2012 and beyond," said Heckman.
At December 31, 2011, there was a
combined total of 745 Exclusive Agencies and Employee Agents,
compared to 741 at December 31, 2010
and 716 at December 31, 2009.
"The size of our agency force increased for the third
consecutive year in 2011. With over 85 percent of the agency
force now operating in our Agency Business Model, the
transformation of our distribution system is largely behind us,"
said Heckman.
Investments
In 2011, total net investment income increased 8 percent and 6
percent compared to the three and twelve months ended December 31, 2010, respectively. Pretax net
realized investment gains were $5.0
million in the fourth quarter of 2011 and $37.7 million for the full year, with impairment
write-downs on securities totaling less than $0.1 million in both periods.
Horace Mann's net unrealized
investment gains on fixed maturity and equity securities of
$441.1 million at December 31, 2011 increased significantly
compared to the $185.6 million net
unrealized gain at December 31, 2010.
Net unrealized gains were $428.2
million at September 30,
2011.
Share Repurchases
During December 2011, the company
repurchased 154,708 shares of its common stock at an aggregate cost
of $2.0 million, or an average price
per share of $13.21, under its
$50 million share repurchase
authorization announced on December 7,
2011. And during January
2012, the company repurchased an additional 42,255 shares at
an aggregate cost of $0.6 million, or
an average price per share of $14.29.
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 Quarterly Report on Form 10-Q for the period
ended September 30, 2011 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
% Change
|
|
2011
|
|
2010
|
|
% Change
|
|
DIGEST OF
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
33.2
|
|
$
15.2
|
|
118.4%
|
|
$
70.5
|
|
$
80.9
|
|
-12.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.83
|
|
$
0.38
|
|
118.4%
|
|
$
1.77
|
|
$
2.05
|
|
-13.7%
|
|
|
Diluted
|
|
$
0.80
|
|
$
0.36
|
|
122.2%
|
|
$
1.70
|
|
$
1.97
|
|
-13.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and equivalent shares (in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
39.9
|
|
39.5
|
|
1.0%
|
|
39.9
|
|
39.3
|
|
1.5%
|
|
|
|
Diluted
|
41.4
|
|
41.3
|
|
0.2%
|
|
41.4
|
|
41.0
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance premiums written and
contract deposits
|
$
276.1
|
|
$
269.2
|
|
2.6%
|
|
$
1,078.4
|
|
$
1,052.0
|
|
2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (A)
|
|
|
|
|
|
|
7.3%
|
|
9.6%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property & Casualty GAAP
combined ratio
|
92.5%
|
|
101.7%
|
|
N.M.
|
|
106.7%
|
|
100.9%
|
|
N.M.
|
|
Effect of catastrophe costs on the Property & Casualty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
combined ratio
|
3.4%
|
|
6.3%
|
|
N.M.
|
|
15.7%
|
|
8.8%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exclusive agencies
(B)
|
|
|
|
|
|
|
549
|
|
457
|
|
20.1%
|
|
Employee agents (C)
|
|
|
|
|
|
|
196
|
|
284
|
|
-31.0%
|
|
|
Total
|
|
|
|
|
|
|
|
745
|
|
741
|
|
0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Per Share
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
$
0.13
|
|
$
0.11
|
|
18.2%
|
|
$
0.46
|
|
$
0.35
|
|
31.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value (D)
|
|
|
|
|
|
|
$
27.33
|
|
$
22.19
|
|
23.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
|
|
$
7,483.7
|
|
$
6,996.3
|
|
7.0%
|
|
Short-term debt
|
|
|
|
|
|
|
38.0
|
|
38.0
|
|
-
|
|
Long-term debt
|
|
|
|
|
|
|
199.7
|
|
199.7
|
|
-
|
|
Total shareholders'
equity
|
|
|
|
|
|
|
1,086.9
|
|
880.0
|
|
23.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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"). Those agreements state that only the
Company's products and limited additional third-party vendor
products authorized by the
Company will be marketed by the agencies. An independent
contractor may sign multiple Exclusive Agent agreements
with the Company and manage more than one Exclusive
Agency.
|
|
(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 $20.66 at December
31, 2011 and $19.42 at December 31, 2010. Ending
shares outstanding were 39,775,432 at December 31, 2011 and
39,655,952 at December 31, 2010.
|
|
|
|
- 1
-
|
|
|
|
HORACE MANN
EDUCATORS CORPORATION
|
|
Statements
of Operations and Supplemental GAAP Consolidated Data
(Unaudited)
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
% Change
|
|
2011
|
|
2010
|
|
% Change
|
|
STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance premiums and contract charges earned
|
$
167.0
|
|
$
169.9
|
|
-1.7%
|
|
$
667.1
|
|
$
672.7
|
|
-0.8%
|
|
Net investment income
|
74.6
|
|
68.8
|
|
8.4%
|
|
288.3
|
|
272.1
|
|
6.0%
|
|
Net realized investment gains
(losses)
|
5.0
|
|
(1.5)
|
|
N.M.
|
|
37.7
|
|
23.8
|
|
58.4%
|
|
Other income
|
1.0
|
|
0.9
|
|
11.1%
|
|
5.2
|
|
6.2
|
|
-16.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
247.6
|
|
238.1
|
|
4.0%
|
|
998.3
|
|
974.8
|
|
2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits, claims and settlement
expenses
|
103.6
|
|
118.6
|
|
-12.6%
|
|
502.4
|
|
474.8
|
|
5.8%
|
|
Interest credited
|
39.9
|
|
37.8
|
|
5.6%
|
|
154.9
|
|
146.7
|
|
5.6%
|
|
Policy acquisition expenses
amortized
|
20.4
|
|
19.0
|
|
7.4%
|
|
92.1
|
|
85.1
|
|
8.2%
|
|
Operating expenses
|
37.4
|
|
38.7
|
|
-3.4%
|
|
140.0
|
|
142.9
|
|
-2.0%
|
|
Interest expense
|
3.6
|
|
3.6
|
|
-
|
|
14.0
|
|
14.0
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefits, losses and expenses
|
204.9
|
|
217.7
|
|
-5.9%
|
|
903.4
|
|
863.5
|
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
42.7
|
|
20.4
|
|
109.3%
|
|
94.9
|
|
111.3
|
|
-14.7%
|
|
|
Income tax expense
|
9.5
|
|
5.2
|
|
82.7%
|
|
24.4
|
|
30.4
|
|
-19.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
33.2
|
|
$
15.2
|
|
118.4%
|
|
$
70.5
|
|
$
80.9
|
|
-12.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF PREMIUMS
WRITTEN
|
|
|
|
|
|
|
|
|
|
|
|
|
AND CONTRACT
DEPOSITS __
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile and property
(voluntary)
|
$
132.1
|
|
$
134.2
|
|
-1.6%
|
|
$
542.0
|
|
$
553.2
|
|
-2.0%
|
|
|
Involuntary and other property
& casualty
|
1.6
|
|
0.8
|
|
100.0%
|
|
3.9
|
|
3.9
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Property &
Casualty
|
133.7
|
|
135.0
|
|
-1.0%
|
|
545.9
|
|
557.1
|
|
-2.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity deposits
|
115.0
|
|
106.8
|
|
7.7%
|
|
433.9
|
|
395.5
|
|
9.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
27.4
|
|
27.4
|
|
-
|
|
98.6
|
|
99.4
|
|
-0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
276.1
|
|
$
269.2
|
|
2.6%
|
|
$
1,078.4
|
|
$
1,052.0
|
|
2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF SEGMENT NET INCOME
(LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
$
17.4
|
|
$
6.0
|
|
190.0%
|
|
$
5.8
|
|
$
27.0
|
|
-78.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity
|
|
10.9
|
|
8.9
|
|
22.5%
|
|
31.4
|
|
31.6
|
|
-0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
5.5
|
|
4.5
|
|
22.2%
|
|
19.0
|
|
20.2
|
|
-5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other
(A)
|
(0.6)
|
|
(4.2)
|
|
-85.7%
|
|
14.3
|
|
2.1
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
33.2
|
|
15.2
|
|
118.4%
|
|
70.5
|
|
80.9
|
|
-12.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs, after tax,
included above (B)
|
(3.1)
|
|
(5.7)
|
|
-45.6%
|
|
(55.9)
|
|
(32.0)
|
|
74.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
% Change
|
|
2011
|
|
2010
|
|
% Change
|
|
PROPERTY &
CASUALTY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums written
|
$
133.7
|
|
$
135.0
|
|
-1.0%
|
|
$
545.9
|
|
$
557.1
|
|
-2.0%
|
|
Premiums earned
|
137.0
|
|
140.0
|
|
-2.1%
|
|
547.5
|
|
555.8
|
|
-1.5%
|
|
Net investment income
|
9.5
|
|
9.4
|
|
1.1%
|
|
36.9
|
|
36.5
|
|
1.1%
|
|
Other income
(expense)
|
-
|
|
(0.1)
|
|
-100.0%
|
|
0.3
|
|
0.3
|
|
-
|
|
Losses and loss adjustment
expenses (LAE)
|
89.9
|
|
104.3
|
|
-13.8%
|
|
442.5
|
|
418.2
|
|
5.8%
|
|
Operating expenses (includes
policy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
acquisition expenses
amortized)
|
37.0
|
|
37.9
|
|
-2.4%
|
|
141.7
|
|
143.1
|
|
-1.0%
|
|
Income before tax
|
19.6
|
|
7.1
|
|
176.1%
|
|
0.5
|
|
31.3
|
|
-98.4%
|
|
Net income
|
17.4
|
|
6.0
|
|
190.0%
|
|
5.8
|
|
27.0
|
|
-78.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income, after
tax
|
8.1
|
|
7.9
|
|
2.5%
|
|
31.4
|
|
31.2
|
|
0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs, after tax
(A)
|
3.1
|
|
5.7
|
|
-45.6%
|
|
55.9
|
|
32.0
|
|
74.7%
|
|
|
Catastrophe losses and LAE,
before tax
|
4.7
|
|
8.7
|
|
-46.0%
|
|
86.0
|
|
49.2
|
|
74.8%
|
|
|
Reinsurance reinstatement premiums, before tax
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss adjustment expense
ratio
|
65.6%
|
|
74.6%
|
|
N.M.
|
|
80.8%
|
|
75.2%
|
|
N.M.
|
|
|
Expense ratio
|
26.9%
|
|
27.1%
|
|
N.M.
|
|
25.9%
|
|
25.7%
|
|
N.M.
|
|
|
Combined ratio
|
92.5%
|
|
101.7%
|
|
N.M.
|
|
106.7%
|
|
100.9%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on the combined ratio
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs
|
3.4%
|
|
6.3%
|
|
N.M.
|
|
15.7%
|
|
8.8%
|
|
N.M.
|
|
|
|
|
Write-off software development
costs
|
-
|
|
-
|
|
N.M.
|
|
-
|
|
0.4%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile and property
detail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums written (voluntary)
(B)
|
$
132.1
|
|
$
134.2
|
|
-1.6%
|
|
$
542.0
|
|
$
553.2
|
|
-2.0%
|
|
|
|
Automobile
|
88.6
|
|
92.9
|
|
-4.6%
|
|
359.9
|
|
372.8
|
|
-3.5%
|
|
|
|
Property
|
43.5
|
|
41.3
|
|
5.3%
|
|
182.1
|
|
180.4
|
|
0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums earned (voluntary)
(B)
|
135.0
|
|
138.1
|
|
-2.2%
|
|
544.1
|
|
551.8
|
|
-1.4%
|
|
|
|
Automobile
|
89.7
|
|
93.1
|
|
-3.7%
|
|
363.0
|
|
372.2
|
|
-2.5%
|
|
|
|
Property
|
45.3
|
|
45.0
|
|
0.7%
|
|
181.1
|
|
179.6
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policies in force (voluntary)
(in thousands)
|
|
|
|
|
|
|
725
|
|
760
|
|
-4.6%
|
|
|
|
Automobile
|
|
|
|
|
|
|
486
|
|
508
|
|
-4.3%
|
|
|
|
Property
|
|
|
|
|
|
|
239
|
|
252
|
|
-5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy renewal rate
(voluntary)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile (6 months)
|
|
|
|
|
|
|
90.5%
|
|
90.5%
|
|
N.M.
|
|
|
|
Property (12 months)
|
|
|
|
|
|
|
85.6%
|
|
86.7%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary automobile operating
statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss adjustment expense
ratio
|
78.5%
|
|
73.4%
|
|
N.M.
|
|
74.0%
|
|
68.5%
|
|
N.M.
|
|
|
|
Expense ratio
|
27.4%
|
|
26.4%
|
|
N.M.
|
|
26.1%
|
|
25.2%
|
|
N.M.
|
|
|
|
Combined ratio
|
105.9%
|
|
99.8%
|
|
N.M.
|
|
100.1%
|
|
93.7%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on the combined ratio
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs
|
0.3%
|
|
0.7%
|
|
N.M.
|
|
1.8%
|
|
1.0%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property operating
statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss adjustment expense
ratio
|
40.2%
|
|
76.8%
|
|
N.M.
|
|
94.3%
|
|
89.0%
|
|
N.M.
|
|
|
|
Expense ratio
|
26.1%
|
|
29.0%
|
|
N.M.
|
|
25.4%
|
|
27.1%
|
|
N.M.
|
|
|
|
Combined ratio
|
66.3%
|
|
105.8%
|
|
N.M.
|
|
119.7%
|
|
116.1%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on the combined ratio
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs
|
9.6%
|
|
17.6%
|
|
N.M.
|
|
44.0%
|
|
25.4%
|
|
N.M.
|
|
|
|
|
Write-off software development
costs
|
-
|
|
-
|
|
N.M.
|
|
-
|
|
1.3%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior years' reserves favorable
(adverse)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
development, pretax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary automobile
|
$
1.9
|
|
$
5.7
|
|
-66.7%
|
|
$
5.7
|
|
$
16.4
|
|
-65.2%
|
|
|
|
Total property
|
2.7
|
|
0.2
|
|
N.M.
|
|
4.6
|
|
4.1
|
|
12.2%
|
|
|
|
Other property and
casualty
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
4.6
|
|
5.9
|
|
-22.0%
|
|
10.3
|
|
20.5
|
|
-49.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
% Change
|
|
2011
|
|
2010
|
|
% Change
|
|
ANNUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract deposits
|
$
115.0
|
|
$
106.8
|
|
7.7%
|
|
$
433.9
|
|
$
395.5
|
|
9.7%
|
|
|
Variable
|
28.0
|
|
28.4
|
|
-1.4%
|
|
109.0
|
|
110.2
|
|
-1.1%
|
|
|
Fixed
|
|
87.0
|
|
78.4
|
|
11.0%
|
|
324.9
|
|
285.3
|
|
13.9%
|
|
Contract charges
earned
|
4.5
|
|
4.4
|
|
2.3%
|
|
18.9
|
|
17.4
|
|
8.6%
|
|
Net investment income
|
47.8
|
|
42.7
|
|
11.9%
|
|
182.8
|
|
167.9
|
|
8.9%
|
|
Net interest margin (without realized investment gains and losses)
|
18.3
|
|
15.1
|
|
21.2%
|
|
69.2
|
|
61.6
|
|
12.3%
|
|
Other income
|
0.3
|
|
0.3
|
|
-
|
|
2.3
|
|
3.2
|
|
-28.1%
|
|
Mortality loss and other reserve
changes
|
(0.3)
|
|
(0.1)
|
|
200.0%
|
|
(1.9)
|
|
(1.3)
|
|
46.2%
|
|
Operating expenses (includes
policy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
acquisition expenses
amortized)
|
7.5
|
|
6.8
|
|
10.3%
|
|
43.3
|
|
36.3
|
|
19.3%
|
|
Income before tax
|
15.3
|
|
12.9
|
|
18.6%
|
|
45.2
|
|
44.6
|
|
1.3%
|
|
Net income
|
10.9
|
|
8.9
|
|
22.5%
|
|
31.4
|
|
31.6
|
|
-0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income increase
(decrease) due to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluation of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred policy acquisition
costs
|
$
2.7
|
|
$
3.3
|
|
-18.2%
|
|
$
(2.9)
|
|
$
2.4
|
|
N.M.
|
|
|
|
Guaranteed minimum death benefit reserve
|
0.1
|
|
0.2
|
|
-50.0%
|
|
(0.3)
|
|
0.2
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity contracts in force (in
thousands)
|
|
|
|
|
|
|
184
|
|
180
|
|
2.2%
|
|
Accumulated value on
deposit
|
|
|
|
|
|
|
$
4,320.8
|
|
$
4,106.1
|
|
5.2%
|
|
|
Variable
|
|
|
|
|
|
|
1,273.8
|
|
1,375.7
|
|
-7.4%
|
|
|
Fixed
|
|
|
|
|
|
|
|
3,047.0
|
|
2,730.4
|
|
11.6%
|
|
Annuity accumulated value
retention - 12 months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable
accumulations
|
|
|
|
|
|
|
93.5%
|
|
92.6%
|
|
N.M.
|
|
|
Fixed accumulations
|
|
|
|
|
|
|
94.9%
|
|
94.4%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums and contract
deposits
|
$
27.4
|
|
$
27.4
|
|
-
|
|
$
98.6
|
|
$
99.4
|
|
-0.8%
|
|
Premiums and contract charges
earned
|
25.5
|
|
25.5
|
|
-
|
|
100.7
|
|
99.5
|
|
1.2%
|
|
Net investment income
|
17.6
|
|
16.9
|
|
4.1%
|
|
69.6
|
|
68.7
|
|
1.3%
|
|
Income before tax
|
8.4
|
|
6.5
|
|
29.2%
|
|
30.1
|
|
31.1
|
|
-3.2%
|
|
Net income
|
5.5
|
|
4.5
|
|
22.2%
|
|
19.0
|
|
20.2
|
|
-5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income increase
(decrease) due to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluation of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred policy acquisition
costs
|
$
(0.8)
|
|
$
(0.1)
|
|
N.M.
|
|
$
(1.5)
|
|
$
(0.5)
|
|
200.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life policies in force (in
thousands)
|
|
|
|
|
|
|
204
|
|
208
|
|
-1.9%
|
|
Life insurance in
force
|
|
|
|
|
|
|
$
14,161
|
|
$
13,940
|
|
1.6%
|
|
Lapse ratio - 12
months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Ordinary life
insurance)
|
|
|
|
|
|
|
4.7%
|
|
4.8%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE AND OTHER
(A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of income (loss)
before tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment gains
(losses)
|
$
5.0
|
|
$
(1.5)
|
|
N.M.
|
|
$
37.7
|
|
$
23.8
|
|
58.4%
|
|
|
Interest expense
|
(3.6)
|
|
(3.6)
|
|
-
|
|
(14.0)
|
|
(14.0)
|
|
-
|
|
|
Other operating expenses, net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and other income
|
(2.0)
|
|
(1.0)
|
|
100.0%
|
|
(4.6)
|
|
(5.5)
|
|
-16.4%
|
|
Income (loss) before
tax
|
(0.6)
|
|
(6.1)
|
|
-90.2%
|
|
19.1
|
|
4.3
|
|
N.M.
|
|
Net income (loss)
|
(0.6)
|
|
(4.2)
|
|
-85.7%
|
|
14.3
|
|
2.1
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
% Change
|
|
2011
|
|
2010
|
|
% Change
|
|
INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity and Life
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at fair value
(amortized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cost 2011, $4,225.1; 2010,
$3,756.8)
|
|
|
|
|
|
|
$
4,621.1
|
|
$
3,929.4
|
|
17.6%
|
|
|
Equity securities, at fair
value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(cost 2011, $9.7; 2010,
$6.5)
|
|
|
|
|
|
|
10.7
|
|
7.3
|
|
46.6%
|
|
|
Short-term
investments
|
|
|
|
|
|
|
56.7
|
|
166.5
|
|
-65.9%
|
|
|
Short-term investments,
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
lending collateral
|
|
|
|
|
|
|
-
|
|
-
|
|
-
|
|
|
Policy loans and
other
|
|
|
|
|
|
|
128.5
|
|
122.1
|
|
5.2%
|
|
|
|
|
Total Annuity and Life
investments
|
|
|
|
|
|
|
4,817.0
|
|
4,225.3
|
|
14.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at fair value
(amortized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cost 2011, $759.3; 2010,
$776.4)
|
|
|
|
|
|
|
800.7
|
|
786.1
|
|
1.9%
|
|
|
Equity securities, at fair
value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(cost 2011, $13.4; 2010,
$14.3)
|
|
|
|
|
|
|
16.1
|
|
16.8
|
|
-4.2%
|
|
|
Short-term
investments
|
|
|
|
|
|
|
25.1
|
|
22.6
|
|
11.1%
|
|
|
Short-term investments,
securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
lending collateral
|
|
|
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
|
Total Property & Casualty investments
|
|
|
|
|
|
|
841.9
|
|
825.5
|
|
2.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate investments
|
|
|
|
|
|
|
18.6
|
|
22.8
|
|
-18.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments
|
|
|
|
|
|
|
5,677.5
|
|
5,073.6
|
|
11.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before tax
|
$
74.6
|
|
$
68.8
|
|
8.4%
|
|
$
288.3
|
|
$
272.1
|
|
6.0%
|
|
|
After tax
|
50.4
|
|
46.5
|
|
8.4%
|
|
194.8
|
|
184.3
|
|
5.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment gains
(losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
by investment portfolio included
in the
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other segment
income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
$
3.0
|
|
$
1.6
|
|
87.5%
|
|
$
12.2
|
|
$
6.5
|
|
87.7%
|
|
|
Annuity
|
-
|
|
(4.7)
|
|
-100.0%
|
|
12.3
|
|
11.1
|
|
10.8%
|
|
|
Life
|
|
2.0
|
|
1.6
|
|
25.0%
|
|
13.2
|
|
6.0
|
|
120.0%
|
|
|
Corporate and Other
|
-
|
|
-
|
|
-
|
|
-
|
|
0.2
|
|
-100.0%
|
|
|
|
Total, before tax
|
5.0
|
|
(1.5)
|
|
N.M.
|
|
37.7
|
|
23.8
|
|
58.4%
|
|
|
|
Total, after tax
|
3.3
|
|
(0.9)
|
|
N.M.
|
|
24.4
|
|
15.4
|
|
58.4%
|
|
|
|
|
Per share, diluted
|
$
0.08
|
|
$
(0.03)
|
|
N.M.
|
|
$
0.59
|
|
$
0.37
|
|
59.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N.M. - Not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 5
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Horace Mann Educators Corporation