SPRINGFIELD, Ill., April 24, 2013 /PRNewswire/ -- Horace Mann
Educators Corporation (NYSE: HMN) today reported financial results
for the three months ended March 31,
2013:
Horace
Mann Financial Highlights
|
|
Three
months ended
March
31,
|
($ in
millions, except per share amounts)
|
2013
|
2012
|
Change
|
Total
revenues
|
$254.6
|
$244.7
|
4.0%
|
Net
income
|
27.0
|
26.7
|
1.1%
|
Net income
per diluted share
|
0.66
|
0.64
|
3.1%
|
Operating
income*
|
22.6
|
26.4
|
-14.4%
|
Operating
income per diluted share*
|
0.55
|
0.64
|
-14.1%
|
Book value
per share
|
31.81
|
27.37
|
16.2%
|
Book value
per share excluding the fair
value adjustment for investments*
|
22.38
|
20.31
|
10.2%
|
Property
and Casualty segment net income
|
10.2
|
13.2
|
-22.7%
|
Property and Casualty combined
ratio
|
97.2%
|
95.0%
|
2.2
pts
|
Property and Casualty underlying
combined ratio*
|
95.4%
|
93.6%
|
1.8
pts
|
Annuity
segment net income
|
$
11.1
|
$
11.6
|
-4.3%
|
Life
segment net income
|
4.3
|
5.2
|
-17.3%
|
* These
measures are not based on accounting principles generally accepted
in the United States ("non-GAAP"). They are reconciled to the most
directly comparable GAAP measures in the supplemental numerical
pages of this document. 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 SEC.
|
"Horace Mann's first quarter
operating income was $0.55 per share
-- consistent with our expectations, and a solid start for the
year," said Horace Mann's President
and CEO Peter H. Heckman. "In
property and casualty, while the combined ratio was higher compared
to first quarter 2012, both written and earned premiums increased,
retention ratios improved, catastrophe losses were modest and prior
years' reserves continued to develop favorably. In our
annuity business, assets under management were up 9% over prior
year, more than offsetting the impact of modest spread compression,
and earnings benefited from another quarter of positive deferred
policy acquisition cost unlocking. And, in our life segment,
first quarter sales of Horace Mann
products increased 28% compared to a year earlier, while earnings
were negatively impacted by higher -- but more typical -- mortality
losses."
Property and Casualty Segment
The property and casualty segment recorded net income of
$10.2 million for the quarter
compared to $13.2 million for the
same period in 2012. The total property and casualty combined
ratio of 97.2% and the underlying combined ratio of 95.4% each
increased approximately 2 percentage points compared to the first
quarter of 2012. Pretax catastrophe losses in the current
quarter of $5.7 million, or 4.2
points, were comparable to a year ago. Favorable prior years'
reserve development totaling $3.3
million, or 2.4 points, was recorded in the first quarter,
compared to $4.0 million of favorable
development recorded in the first quarter of 2012. The
combined ratio increase reflected a decrease in anticipated current
accident year auto salvage and subrogation recoveries, as well as
an anticipated increase in the expense ratio.
Total property and casualty premiums written of $131.9 million increased 3% compared to the three
months ended March 31, 2012, driven
by increases in average property and auto premiums per policy.
True new auto sales units -- units associated with new
Horace Mann auto policyholders --
increased 1% in the current quarter. Reflecting a lower level
of sales from additional vehicles added to existing policies, total
new auto units decreased 4% compared to a year earlier. For
property, new sales units increased 7% compared to the first
quarter of 2012. In addition, auto and property policy
renewal rates for the current period were approximately 2
percentage points higher than prior year.
Annuity Segment
Annuity segment net income was $11.1
million for the three months ended March 31, 2013, decreasing $0.5 million compared to the same period in
2012. Primarily reflecting growth in assets under management,
the net interest margin earned on fixed annuity assets increased 4%
compared to the first quarter of 2012, with the related net
interest spread of 2.01% decreasing 10 basis points. The
evaluation of deferred policy acquisition costs in the quarter had
a $1.6 million pretax positive impact
on annuity segment earnings compared to a $2.6 million positive impact in the prior year,
with the decrease primarily due to financial market
performance. Total accumulated account value of $4.9 billion increased 9% compared to
March 31, 2012, and total cash value
persistency of 95.1% improved nearly 1 percentage point compared to
a year earlier.
For the three months ended March 31,
2013, annuity deposits received of $90.2 million decreased 2% compared to the prior
year, primarily due to a decrease in scheduled deposit receipts in
the current period.
Horace Mann's annuity sales
decreased 3% compared to first quarter 2012. Within this
result, annuity sales by Horace
Mann's agency force increased 5%, while sales from the
supplemental independent agent distribution channel declined 31%
year-over-year.
Life Segment
Life segment net income of $4.3
million for the first quarter decreased $0.9 million compared to the same period in 2012,
including an increase in mortality losses in the current period, as
well as a slight decrease in investment income. Life
persistency of 96% improved slightly compared to 12 months
earlier.
Life segment insurance premiums and contract deposits of
$23.0 million were comparable to the
three months ended March 31,
2012.
New life sales continued to be strong compared to the prior
year, with a growth rate of 28% in sales of Horace Mann-manufactured products -- consistent
with the company's strategic intent to significantly increase its
underwritten, mortality-based business.
Investment Results
Total net investment income increased 2% compared to the three
months ended March 31, 2012.
Pretax net realized investment gains were $6.9 million in the current quarter and included
no impairment write-downs on securities.
Horace Mann's net unrealized
investment gains on fixed maturity and equity securities of
$639.4 million at March 31, 2013 increased 38% compared to a year
ago, but decreased modestly compared to December 31, 2012.
Capital Management
During the first quarter of 2013, the company repurchased 89,649
shares of its common stock at an aggregate cost of $1.8 million, or an average price per share of
$20.53, under its $50 million share repurchase program. As of
March 31, 2013, the program had a
remaining authorization of $30.4
million. There were 39,667,063 shares outstanding on
March 31, 2013.
Webcast Conference Call
Horace Mann's senior management
will discuss the company's first quarter performance with investors
and analysts on April 25, 2013 at
9:30 a.m. Eastern Time. The
conference call will be webcast live on the Internet at
www.horacemann.com and archived later in the day for replay, which
will be available for one month.
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, 2012 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. The
information contained in this press release includes financial
measures which are based on methodologies other than United States generally accepted accounting
principles ("GAAP"). Reconciliations of non-GAAP measures to
the closest GAAP measures are contained in the supplemental
numerical pages of this release and additional descriptions of the
non-GAAP measures are contained in the Glossary of Selected Terms
included as an exhibit to the company's SEC filings.
HORACE
MANN EDUCATORS CORPORATION
|
Financial
Highlights (Unaudited)
|
(Dollars
in Millions, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
%
Change
|
EARNINGS SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
27.0
|
|
$
26.7
|
|
1.1%
|
|
Net
realized investment gains, after tax
|
|
4.4
|
|
0.3
|
|
N.M.
|
Operating
income (A)
|
|
22.6
|
|
26.4
|
|
-14.4%
|
|
|
|
|
|
|
|
|
|
|
Per
diluted share:
|
|
|
|
|
|
|
|
Net
income
|
|
$
0.66
|
|
$
0.64
|
|
3.1%
|
|
|
Net
realized investment gains, after tax
|
|
$
0.11
|
|
$
-
|
|
N.M.
|
|
Operating
income (A)
|
|
$
0.55
|
|
$
0.64
|
|
-14.1%
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
and equivalent shares (in millions) -
Diluted
|
|
41.1
|
|
41.5
|
|
-1.0%
|
|
|
|
|
|
|
|
|
|
|
Return on
equity (B)
|
|
8.7%
|
|
7.3%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
premiums written and contract deposits
|
|
$
245.1
|
|
$
242.8
|
|
0.9%
|
|
|
|
|
|
|
|
|
|
|
Property
& Casualty combined ratio
|
|
97.2%
|
|
95.0%
|
|
N.M.
|
Property
& Casualty combined ratio excluding the effects of
catastrophe costs and prior years' reserve development
("underlying combined ratio") (A)
|
|
95.4%
|
|
93.6%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL POSITION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
(C):
|
|
|
|
|
|
|
|
Book
value
|
|
$
31.81
|
|
$
27.37
|
|
16.2%
|
|
|
Effect of
the fair value adjustment for investments (D)
|
|
$
9.43
|
|
$
7.06
|
|
33.6%
|
|
Book value
excluding the fair value adjustment for investments (A)
|
|
$
22.38
|
|
$
20.31
|
|
10.2%
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
$
0.195
|
|
$
0.13
|
|
50.0%
|
|
|
|
|
|
|
|
|
|
|
Ending
number of shares outstanding (in millions) (C)
|
|
39.7
|
|
39.8
|
|
-0.3%
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
8,457.4
|
|
$
7,697.0
|
|
9.9%
|
Short-term
debt
|
|
38.0
|
|
38.0
|
|
-
|
Long-term
debt
|
|
199.8
|
|
199.8
|
|
-
|
Total
shareholders' equity
|
|
1,261.7
|
|
1,088.8
|
|
15.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exclusive
agencies (E)
|
|
620
|
|
555
|
|
11.7%
|
Employee
agents (F)
|
|
129
|
|
172
|
|
-25.0%
|
|
Total
|
|
|
749
|
|
727
|
|
3.0%
|
N.M. - Not
meaningful.
|
(A)
|
These
measures are not based on accounting principles generally accepted
in the United States ("non-GAAP"). 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 SEC.
|
(B)
|
Based on
trailing 12-month net income and average quarter-end shareholders'
equity.
|
(C)
|
Ending
shares outstanding were 39,667,063 at March 31, 2013 and 39,773,363
at March 31, 2012.
|
(D)
|
Net of the
related impact on deferred policy acquisition costs and the
applicable deferred taxes.
|
(E)
|
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.
|
(F)
|
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.
|
- 1
-
|
|
HORACE
MANN EDUCATORS CORPORATION
|
Statements
of Operations and Supplemental Consolidated Data
(Unaudited)
|
(Dollars
in Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
%
Change
|
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
premiums and contract charges earned
|
|
$
169.2
|
|
$
165.5
|
|
2.2%
|
Net
investment income
|
|
77.4
|
|
75.7
|
|
2.2%
|
Net
realized investment gains
|
|
6.9
|
|
0.4
|
|
N.M.
|
Other
income
|
|
1.1
|
|
3.1
|
|
-64.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
254.6
|
|
244.7
|
|
4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits,
claims and settlement expenses
|
|
112.7
|
|
107.9
|
|
4.4%
|
Interest
credited
|
|
41.4
|
|
40.0
|
|
3.5%
|
Policy
acquisition expenses amortized
|
|
20.1
|
|
17.8
|
|
12.9%
|
Operating
expenses
|
|
38.8
|
|
37.9
|
|
2.4%
|
Interest
expense
|
|
3.6
|
|
3.6
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
benefits, losses and expenses
|
|
216.6
|
|
207.2
|
|
4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
|
38.0
|
|
37.5
|
|
1.3%
|
|
Income tax
expense
|
|
11.0
|
|
10.8
|
|
1.9%
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
27.0
|
|
$
26.7
|
|
1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF PREMIUMS WRITTEN
|
|
|
|
|
|
|
AND CONTRACT
DEPOSITS
__
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
& Casualty
|
|
|
|
|
|
|
|
Automobile
and property (voluntary)
|
|
$
131.5
|
|
$
127.2
|
|
3.4%
|
|
Involuntary and other property &
casualty
|
|
0.4
|
|
0.5
|
|
-20.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Property & Casualty
|
|
131.9
|
|
127.7
|
|
3.3%
|
|
|
|
|
|
|
|
|
|
|
Annuity
deposits
|
|
90.2
|
|
92.0
|
|
-2.0%
|
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
|
23.0
|
|
23.1
|
|
-0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
245.1
|
|
$
242.8
|
|
0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF SEGMENT NET INCOME
(LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
& Casualty
|
|
$
10.2
|
|
$
13.2
|
|
-22.7%
|
|
|
|
|
|
|
|
|
|
|
Annuity
|
|
|
11.1
|
|
11.6
|
|
-4.3%
|
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
|
4.3
|
|
5.2
|
|
-17.3%
|
|
|
|
|
|
|
|
|
|
|
Corporate
and other (A)
|
|
1.4
|
|
(3.3)
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
27.0
|
|
26.7
|
|
1.1%
|
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
5.
|
- 2
-
|
|
HORACE
MANN EDUCATORS CORPORATION
|
Supplemental Business Segment Overview
(Unaudited)
|
(Dollars
in Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
%
Change
|
PROPERTY & CASUALTY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums
written
|
|
$
131.9
|
|
$
127.7
|
|
3.3%
|
Premiums
earned
|
|
137.9
|
|
135.0
|
|
2.1%
|
Net
investment income
|
|
9.0
|
|
8.9
|
|
1.1%
|
Other
income
|
|
-
|
|
1.6
|
|
-100.0%
|
Losses and
loss adjustment expenses (LAE)
|
|
96.4
|
|
93.2
|
|
3.4%
|
Operating expenses (includes policy acquisition
expenses amortized)
|
|
37.7
|
|
35.1
|
|
7.4%
|
Income
before tax
|
|
12.8
|
|
17.2
|
|
-25.6%
|
Net
income
|
|
10.2
|
|
13.2
|
|
-22.7%
|
|
|
|
|
|
|
|
|
|
|
Net
investment income, after tax
|
|
7.6
|
|
7.5
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs, after tax (A)
|
|
3.7
|
|
3.8
|
|
-2.6%
|
|
Catastrophe losses and LAE, before tax
|
|
5.7
|
|
5.9
|
|
-3.4%
|
|
Reinsurance reinstatement premiums, before
tax
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Prior years' reserves favorable (adverse)
development, pretax
|
|
|
|
|
|
|
|
|
Voluntary
automobile
|
|
$
3.3
|
|
$
3.3
|
|
-
|
|
|
Total
property
|
|
-
|
|
0.7
|
|
-100.0%
|
|
|
Other
property and casualty
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
3.3
|
|
4.0
|
|
-17.5%
|
|
|
|
|
|
|
|
|
|
|
Operating
statistics:
|
|
|
|
|
|
|
|
Loss and
loss adjustment expense ratio
|
|
69.9%
|
|
69.0%
|
|
N.M.
|
|
Expense
ratio
|
|
27.3%
|
|
26.0%
|
|
N.M.
|
|
Combined
ratio
|
|
97.2%
|
|
95.0%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on
the combined ratio of:
|
|
|
|
|
|
|
|
|
|
Catastrophe costs (A)
|
|
4.2%
|
|
4.4%
|
|
N.M.
|
|
|
|
Prior
years' reserve development
|
|
-2.4%
|
|
-3.0%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio excluding the effects of
catastrophe costs and prior years' reserve development ("underlying
combined ratio") (B)
|
|
95.4%
|
|
93.6%
|
|
N.M.
|
N.M. - Not
meaningful.
|
(A)
|
Includes
allocated loss adjustment expenses and catastrophe reinsurance
reinstatement premiums.
|
(B)
|
These
measures are not based on accounting principles generally accepted
in the United States ("non-GAAP"). See
footnote (A) on page 1 of these supplemental numerical
pages.
|
- 3
-
|
|
HORACE
MANN EDUCATORS CORPORATION
|
Supplemental Business Segment Overview
(Unaudited)
|
(Dollars
in Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
%
Change
|
PROPERTY & CASUALTY - continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Operating Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile
and property detail:
|
|
|
|
|
|
|
|
Premiums
written (voluntary) (A)
|
|
$
131.5
|
|
$
127.2
|
|
3.4%
|
|
|
Automobile
|
|
92.3
|
|
89.4
|
|
3.2%
|
|
|
Property
|
|
39.2
|
|
37.8
|
|
3.7%
|
|
|
|
|
|
|
|
|
|
|
|
Premiums
earned (voluntary) (A)
|
|
137.6
|
|
134.6
|
|
2.2%
|
|
|
Automobile
|
|
90.9
|
|
88.7
|
|
2.5%
|
|
|
Property
|
|
46.7
|
|
45.9
|
|
1.7%
|
|
|
|
|
|
|
|
|
|
|
|
Policies
in force (voluntary) (in thousands)
|
|
721
|
|
723
|
|
-0.3%
|
|
|
Automobile
|
|
483
|
|
485
|
|
-0.4%
|
|
|
Property
|
|
238
|
|
238
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Policy
renewal rate (voluntary) - 12 months
|
|
|
|
|
|
|
|
|
Automobile
|
|
85.0%
|
|
83.2%
|
|
N.M.
|
|
|
Property
|
|
89.7%
|
|
87.7%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
automobile operating statistics:
|
|
|
|
|
|
|
|
|
Loss and
loss adjustment expense ratio
|
|
73.7%
|
|
71.8%
|
|
N.M.
|
|
|
Expense
ratio
|
|
27.9%
|
|
27.0%
|
|
N.M.
|
|
|
Combined
ratio
|
|
101.6%
|
|
98.8%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on
the combined ratio of:
|
|
|
|
|
|
|
|
|
|
Catastrophe costs (B)
|
|
0.4%
|
|
0.5%
|
|
N.M.
|
|
|
|
Prior
years' reserve development
|
|
-3.6%
|
|
-3.7%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio excluding the effects of
catastrophe costs and prior years' reserve development ("underlying
combined ratio") (C)
|
|
104.8%
|
|
102.0%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Total
property operating statistics:
|
|
|
|
|
|
|
|
|
Loss and
loss adjustment expense ratio
|
|
61.6%
|
|
63.1%
|
|
N.M.
|
|
|
Expense
ratio
|
|
26.3%
|
|
24.1%
|
|
N.M.
|
|
|
Combined
ratio
|
|
87.9%
|
|
87.2%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on
the combined ratio of:
|
|
|
|
|
|
|
|
|
|
Catastrophe costs (B)
|
|
11.4%
|
|
11.9%
|
|
N.M.
|
|
|
|
Prior
years' reserve development
|
|
0.0%
|
|
-1.4%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio excluding the effects of
catastrophe costs and prior years' reserve development ("underlying
combined ratio") (C)
|
|
76.5%
|
|
76.7%
|
|
N.M.
|
N.M. - Not
meaningful.
|
(A)
|
Amounts
are net of additional ceded premiums to reinstate the Company's
property and casualty catastrophe reinsurance coverage,
if any, as quantified on page 3.
|
(B)
|
Includes
allocated loss adjustment expenses and catastrophe reinsurance
reinstatement premiums.
|
(C)
|
These
measures are not based on accounting principles generally accepted
in the United States ("non-GAAP"). See
footnote (A) on page 1 of these supplemental numerical
pages.
|
- 4
-
|
|
HORACE
MANN EDUCATORS CORPORATION
|
Supplemental Business Segment Overview
(Unaudited)
|
(Dollars
in Millions)
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2013
|
|
2012
|
|
%
Change
|
ANNUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
deposits
|
|
$
90.2
|
|
$
92.0
|
|
-2.0%
|
|
Variable
|
|
30.3
|
|
27.2
|
|
11.4%
|
|
Fixed
|
|
59.9
|
|
64.8
|
|
-7.6%
|
Contract
charges earned
|
|
5.1
|
|
5.0
|
|
2.0%
|
Net
investment income
|
|
51.3
|
|
49.5
|
|
3.6%
|
Net
interest margin (without realized investment gains and
losses)
|
|
20.6
|
|
19.9
|
|
3.5%
|
Other
income
|
|
0.7
|
|
0.7
|
|
-
|
Mortality
loss and other reserve changes
|
|
(0.3)
|
|
0.2
|
|
N.M.
|
Operating
expenses (includes policy acquisition expenses
amortized)
|
|
9.6
|
|
8.5
|
|
12.9%
|
Income
before tax
|
|
16.5
|
|
17.3
|
|
-4.6%
|
Net
income
|
|
11.1
|
|
11.6
|
|
-4.3%
|
|
|
|
|
|
|
Pretax
income increase (decrease) due to evaluation of:
|
|
|
|
|
|
|
|
|
Deferred
policy acquisition costs
|
|
$
1.6
|
|
$
2.6
|
|
-38.5%
|
|
|
Guaranteed
minimum death benefit reserve
|
|
0.1
|
|
0.2
|
|
-50.0%
|
|
|
|
|
|
|
|
Annuity
contracts in force (in thousands)
|
|
190
|
|
185
|
|
2.7%
|
Accumulated value on deposit / Assets under
management
|
|
$
4,927.3
|
|
$
4,533.1
|
|
8.7%
|
|
Variable
|
|
1,508.3
|
|
1,409.1
|
|
7.0%
|
|
Fixed
|
|
3,419.0
|
|
3,124.0
|
|
9.4%
|
Annuity
accumulated value retention - 12 months
|
|
|
|
|
|
|
|
Variable
accumulations
|
|
94.3%
|
|
93.7%
|
|
N.M.
|
|
Fixed
accumulations
|
|
95.5%
|
|
95.0%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums
and contract deposits
|
|
$
23.0
|
|
$
23.1
|
|
-0.4%
|
Premiums
and contract charges earned
|
|
26.2
|
|
25.5
|
|
2.7%
|
Net
investment income
|
|
17.3
|
|
17.5
|
|
-1.1%
|
Income
before tax
|
|
6.8
|
|
8.1
|
|
-16.0%
|
Net
income
|
|
4.3
|
|
5.2
|
|
-17.3%
|
|
|
|
|
|
|
Pretax
income increase (decrease) due to evaluation of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
policy acquisition costs
|
|
$
-
|
|
$
(0.1)
|
|
-100.0%
|
|
|
|
|
|
|
|
Life
policies in force (in thousands)
|
|
201
|
|
204
|
|
-1.5%
|
Life
insurance in force
|
|
$
14,701
|
|
$
14,260
|
|
3.1%
|
Lapse
ratio - 12 months
|
|
|
|
|
|
|
|
(Ordinary
life insurance)
|
|
4.3%
|
|
4.6%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE AND OTHER (A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components
of income (loss) before tax:
|
|
|
|
|
|
|
|
Net
realized investment gains
|
|
$
6.9
|
|
$
0.4
|
|
N.M.
|
|
Interest
expense
|
|
(3.6)
|
|
(3.6)
|
|
-
|
|
Other operating expenses, net investment income
and other income
|
|
(1.4)
|
|
(1.9)
|
|
-26.3%
|
Income
(loss) before tax
|
|
1.9
|
|
(5.1)
|
|
N.M.
|
Net income
(loss)
|
|
1.4
|
|
(3.3)
|
|
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.
|
- 5
-
|
|
HORACE
MANN EDUCATORS CORPORATION
|
Supplemental Business Segment Overview
(Unaudited)
|
(Dollars
in Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
%
Change
|
INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity
and Life
|
|
|
|
|
|
|
|
Fixed
maturities, at fair value (amortized cost 2013, $4,736.2;
2012, $4,274.4)
|
|
$
5,312.0
|
|
$
4,684.2
|
|
13.4%
|
|
Equity securities, at fair value (cost 2013,
$5.5; 2012, $10.9)
|
|
5.2
|
|
11.5
|
|
-54.8%
|
|
Short-term
investments
|
|
19.6
|
|
19.3
|
|
1.6%
|
|
Short-term investments, securities lending
collateral
|
|
-
|
|
-
|
|
-
|
|
Policy
loans
|
|
135.7
|
|
129.2
|
|
5.0%
|
|
Other
investments
|
|
53.6
|
|
26.2
|
|
104.6%
|
|
|
|
Total
Annuity and Life investments
|
|
5,526.1
|
|
4,870.4
|
|
13.5%
|
|
|
|
|
|
|
|
|
|
|
Property
& Casualty
|
|
|
|
|
|
|
|
Fixed maturities, at fair value (amortized cost
2013, $773.7; 2012, $767.1)
|
|
831.7
|
|
815.9
|
|
1.9%
|
|
Equity securities, at fair value (cost 2013,
$47.6; 2012, $13.4)
|
|
53.5
|
|
16.3
|
|
228.2%
|
|
Short-term
investments
|
|
0.7
|
|
34.7
|
|
-98.0%
|
|
Short-term
investments, securities lending collateral
|
|
-
|
|
-
|
|
-
|
|
|
|
Total
Property & Casualty investments
|
|
885.9
|
|
866.9
|
|
2.2%
|
|
|
|
|
|
|
|
|
|
|
Corporate
investments
|
|
14.1
|
|
20.2
|
|
-30.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
investments
|
|
6,426.1
|
|
5,757.5
|
|
11.6%
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
|
|
|
|
|
Before
tax
|
|
$
77.4
|
|
$
75.7
|
|
2.2%
|
|
After
tax
|
|
52.1
|
|
51.0
|
|
2.2%
|
|
|
|
|
|
|
|
|
|
|
Net
realized investment gains
|
|
|
|
|
|
|
by
investment portfolio included in the
|
|
|
|
|
|
|
Corporate
and Other segment income
|
|
|
|
|
|
|
|
Property
& Casualty
|
|
$
3.5
|
|
$
2.7
|
|
29.6%
|
|
Annuity
|
|
2.7
|
|
(2.9)
|
|
N.M.
|
|
Life
|
|
|
0.7
|
|
0.6
|
|
16.7%
|
|
Corporate
and Other
|
|
-
|
|
-
|
|
-
|
|
|
Total,
before tax
|
|
6.9
|
|
0.4
|
|
N.M.
|
|
|
Total,
after tax
|
|
4.4
|
|
0.3
|
|
N.M.
|
|
|
|
Per share,
diluted
|
|
$
0.11
|
|
$
-
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N.M. - Not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 6
-
|
SOURCE Horace Mann Educators Corporation