Horace Mann Educators Corporation (NYSE:HMN), the largest
financial services company focused on helping America’s educators
and a core small-cap value equity in the Financials sector, today
reported financial results for the three months and full year ended
December 31, 2023:
- Diversified business delivered full-year net income of $45
million, or $1.09 per share, and core earnings* of $64 million, or
$1.54 per share, with reported book value of $28.78 and adjusted
book value* of $36.29 at year end; fourth-quarter net income was
$0.95 per share, with core earnings of $0.84 per share
- Total revenue rose 8% for the year and 16% for the fourth
quarter with net premiums and contract charges earned up 3% and
record net premiums written and contract deposits* up 6% for the
year and fourth quarter, total net investment income up 11% for the
year and 17% for the fourth quarter
- Property & Casualty segment results improved over 2022 with
fourth-quarter segment profit of $9 million; Supplemental &
Group Benefits and Life & Retirement segments continued to
deliver strong results
- Full-year 2024 EPS estimated at $3.00-$3.30 as Property &
Casualty segment expected to return to full-year profitability;
reflects higher year-over-year corporate interest expense following
the 2023 senior debt offering
($ in millions, except per share
amounts)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
% Change
2023
2022
% Change
Total revenues
$
402.9
$
346.4
16.3
%
$
1,491.9
$
1,381.6
8.0
%
Net income (loss)
39.5
(16.7
)
N.M.
45.0
19.8
127.3
%
Net investment gains (losses), after
tax
4.6
(10.0
)
N.M.
(18.8
)
(44.5
)
N.M.
Other expense - goodwill and intangible
asset
impairments, after tax
—
(3.8
)
N.M.
—
(3.8
)
N.M.
Core earnings (loss)*
34.9
(2.9
)
N.M.
63.8
68.1
-6.3
%
Adjusted core earnings*
37.8
(1.5
)
N.M.
72.0
79.8
-9.8
%
Per diluted share:
Net income (loss)
0.95
(0.40
)
N.M.
1.09
0.47
131.9
%
Net investment gains (losses), after
tax
0.11
(0.25
)
N.M.
(0.45
)
(1.07
)
N.M.
Other expense - goodwill and intangible
asset
impairments, after tax
—
(0.09
)
N.M.
—
(0.09
)
N.M.
Core earnings (loss) per diluted
share*
0.84
(0.06
)
N.M.
1.54
1.63
-5.5
%
Adjusted core earnings (loss) per diluted
share*
0.91
(0.04
)
N.M.
1.74
1.91
-8.9
%
Book value per share
28.78
26.85
7.2
%
Adjusted book value per share*
36.29
36.40
-0.3
%
Tangible book value per share*
30.79
30.58
0.7
%
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 enter 2024 focused on helping all educators protect what
they have today and prepare for a successful tomorrow while we also
help school districts and other municipal employers attract and
retain employees by providing more comprehensive benefits,” said
Horace Mann President & CEO Marita Zuraitis. “We are
diversifying to expand our reach in our core markets while managing
our businesses to deliver consistent and reliable value to
shareholders with a solid balance sheet and a compelling
dividend.
“We remain highly confident in our ability to achieve the
company’s long-term objectives of expanding our share of the
education market and achieving a sustainable double-digit ROE in
2025.” Zuraitis added. “We are executing on our plan. In
particular, 2023 results and our 2024 guidance clearly reflect the
benefit of the property and casualty rate and non-rate underwriting
actions we are taking. Our expectations for 2024 keep us on track
to a core return on equity for the year near 9%.”
Details of the company’s guidance and outlook are included in
the Q4 2023 investor presentation available on the
Quarterly Results page of
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 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 reflect benefit of
rate and non-rate actions
(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 46% of total revenues in 2023.
($ in millions)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
Property & Casualty net premiums
written*
$
176.0
$
153.5
14.7
%
$
684.4
$
617.5
10.8
%
Property & Casualty net income (loss)
/
core earnings (loss)*
8.8
(25.0
)
135.2
%
(35.5
)
(44.4
)
20.0
%
Property & Casualty combined ratio
100.9
%
128.0
%
-27.1 pts
113.3
%
115.3
%
-2.0 pts
Property & Casualty underlying loss
ratio*
71.1
%
81.6
%
-10.5 pts
71.2
%
71.3
%
-0.1 pts
Property & Casualty expense ratio
26.9
%
29.4
%
-2.5 pts
27.0
%
27.4
%
-0.4 pts
Property & Casualty catastrophe
losses
2.9
%
8.0
%
-5.1 pts
15.1
%
13.0
%
2.1 pts
Property & Casualty underlying
combined ratio*
98.0
%
111.0
%
-13.0 pts
98.2
%
98.7
%
-0.5 pts
Auto combined ratio
112.7
%
143.6
%
-30.9 pts
111.7
%
119.0
%
-7.3 pts
Auto underlying loss ratio*
84.7
%
99.8
%
-15.1 pts
81.7
%
82.8
%
-1.1 pts
Property combined ratio
80.1
%
101.0
%
-20.9 pts
116.1
%
108.8
%
7.3 pts
Property underlying loss ratio*
47.0
%
49.9
%
-2.9 pts
52.2
%
50.1
%
2.1 pts
Including a profit of $8.8 million in the fourth quarter, the
Property & Casualty segment’s net loss for the full year was in
line with the company’s recent guidance, reflecting elevated
catastrophe and non-catastrophe weather activity for much of the
year. Property & Casualty net premiums written were up 10.8%
for the year and 14.7% for the quarter. Segment net investment
income was up 20.7% for the year and 32.9% for the quarter.
The year-over-year improvement in the fourth-quarter combined
ratio demonstrated the benefit of the company’s rate and non-rate
underwriting actions as well as catastrophe losses below our
five-year average for the fourth quarter. Catastrophe losses for
the quarter were $5.0 million, pretax, and catastrophe losses for
the full-year were $97.6 million, pretax, In total, there were
seven events designated as catastrophes by Property Claims Services
(PCS) in this year’s fourth quarter versus 13 events in last year’s
fourth quarter.
The year-over-year increase in average written premiums for auto
policies improved again in the fourth quarter to 16.7%. The
fourth-quarter auto underlying loss ratio improved 15.1 points
year-over-year to 84.7%, but reflected typical seasonality in auto
loss trends even 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 13.2% in the fourth quarter, as rate
increases taken over the past two years and inflation adjustments
to coverage values continue to take effect. The fourth-quarter
property underlying loss ratio improved to 47.0%.
Life & Retirement segment full-year net income of $72
million
(All comparisons vs. same period in 2022, unless noted
otherwise)
The Life & Retirement segment markets 403(b) tax-qualified
fixed, fixed indexed and variable annuities; the Horace Mann
Retirement Advantage® open architecture platform for 403(b)(7) and
other defined contribution plans; and other retirement products to
educators as well as traditional term and whole life insurance
products. Horace Mann is one of the largest participants in the
K-12 educator portion of the 403(b) tax-qualified annuity market,
measured by 403(b) net premiums written on a statutory accounting
basis. The Life & Retirement segment represented 36% of total
revenues in 2023.
($ in millions)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
Life & Retirement net income
$
19.2
$
6.7
N.M.
$
71.5
$
63.8
12.1
%
Life & Retirement core earnings*
19.2
10.5
82.9
%
71.5
67.6
5.8
%
Life & Retirement adjusted core
earnings*
19.2
8.8
118.2
%
68.2
66.9
1.9
%
Life annualized sales*
2.7
3.1
-12.9
%
9.3
9.3
—
%
Life mortality costs
16.4
14.9
10.1
%
69.4
68.6
1.2
%
Net annuity contract deposits*
108.3
105.0
3.1
%
455.9
429.3
6.2
%
Annuity assets under management(1)
5,186.9
4,837.9
7.2
%
Total assets under administration(2)
8,687.1
8,120.3
7.0
%
(1)
Amount reported as of December 31, 2023
excludes $711.7 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 for the full year was
ahead of recent guidance, as segment net investment income rose
13.6% in the fourth-quarter and 9.3% for the full-year, benefiting
from higher returns on floating rate securities. The net interest
spread on our fixed annuity business remained near our longer-term
targeted range of 220 to 230 basis points. The spread was affected
by lower limited partnership returns as well as higher FHLB
borrowing costs as credit spreads tightened year over year. The net
dollar contribution from our FHLB funding agreements remained
stable compared with 2022, with FHLB borrowing costs reflected in
interest credited.
For the Retirement business, net annuity contract deposits were
up 6.2% for the year to $455.9 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.
Horace Mann currently has $5.2 billion in annuity assets under
management, including $2.2 billion of fixed annuities, $2.6 billion
of variable annuities and $0.4 billion of fixed indexed annuities.
Assets under administration, which includes Horace Mann Retirement
Advantage® and other advisory and recordkeeping assets, continue to
benefit from the strong equity markets.
Life annualized sales were $9.3 million for the year. Life
insurance in force rose to $20.5 billion at year-end.
Supplemental & Group Benefits segment full-year net
income of $55 million
(All comparisons vs. same period in 2022, unless noted
otherwise)
The Supplemental & Group Benefits segment markets
employer-sponsored group solutions for districts and other public
employers, as well as worksite direct products typically
distributed through the employer channel. The worksite business
provides group term life, disability and specialty health insurance
along with supplemental products including cancer, heart, hospital,
supplemental disability and accident coverages. The Supplemental
& Group Benefits segment represented 19% of total revenues in
2023.
($ in millions)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
Supplemental & Group Benefits net
income /
core earnings*
$
13.3
$
17.0
-21.8
%
$
54.9
$
65.9
-16.7
%
Supplemental & Group Benefits
adjusted
core earnings*
16.2
20.1
-19.4
%
66.4
78.3
-15.2
%
Pretax profit margin(1)
23.3
%
30.9
%
-7.6 pts
24.3
%
28.5
%
-4.2 pts
Net premiums earned
$
64.6
$
68.3
-5.4
%
$
259.8
$
275.5
-5.7
%
Worksite direct products sales*
4.4
3.4
29.4
%
15.1
9.2
64.1
%
Employer-sponsored products sales*
1.1
1.1
—
%
11.1
6.9
60.9
%
Worksite direct products benefit ratio
36.3
%
16.9
%
19.4 pts
29.1
%
23.0
%
6.1 pts
Employer-sponsored products benefit
ratio
36.2
%
33.3
%
2.9 pts
41.4
%
41.8
%
-0.4 pts
(1)
Measured to total revenues.
Supplemental & Group Benefits segment full-year net income
was $54.9 million, at the top end of recent guidance. The full-year
benefit ratio for the worksite direct product line continued to
move toward the longer-term target although utilization remains
below historical levels. The full-year benefit ratio for the
employer-sponsored product lines was in line with the prior year
but also remains below the longer-term target.
The non-cash impact of amortization of intangible assets under
purchase accounting reduced full-year 2023 core earnings by $14.6
million, pretax, vs. $15.7 million in 2022. Segment net investment
income rose 31.6% in the fourth-quarter and 16.8% for the
full-year.
Total segment sales for the year were $26.2 million, up 62.7%
over the prior year, with worksite direct supplemental product
sales of $15.1 million and employer-sponsored products of $11.1
million. Fourth-quarter sales reflected normal seasonality in this
business area. Persistency remains relatively stable for the
segment.
Consolidated Results
The Corporate & Other segment reduced total revenues by
$20.6 million in 2023, largely due to realized investment losses
related to proactive repositioning of the portfolio to enhance book
yield. Interest expense was $8.6 million for the fourth quarter of
2023 compared to $5.9 million for the fourth quarter of 2022.
Total net investment income rose 11% in 2023
(All comparisons vs. same period in 2022, unless noted
otherwise)
Horace Mann’s investment strategy is primarily focused on
generating income to support product liabilities, and balances
principal protection and risk. Total net investment income includes
net investment income on the investment portfolio managed by Horace
Mann, as well as accreted investment income on the deposit asset on
reinsurance related to the company’s reinsurance of policy
liabilities related to legacy individual annuities written in 2002
or earlier.
($ in millions)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
Pretax net investment income - investment
portfolio
$
90.9
$
74.1
22.7
%
$
339.9
$
297.4
14.3
%
Pretax investment income - deposit
asset
on reinsurance
26.1
26.1
—
%
104.9
103.5
1.4
%
Total pretax net investment income
117.0
100.2
16.8
%
444.8
400.9
11.0
%
Pretax net investment gains (losses)
5.7
(12.7
)
N.M
(24.0
)
(56.5
)
N.M.
Pretax net unrealized investment gains
(losses) on fixed
maturity securities
(417.6
)
(571.9
)
N.M.
Investment yield, excluding limited
partnership interests,
pretax - annualized
4.94
%
4.01
%
0.93 pts
4.74
%
4.26
%
0.48 pts
N.M. - Not meaningful.
For the full year, total net investment income rose 11.0% and
net investment income on the managed portfolio increased 14.3%,
ahead of recent guidance due to strong fourth-quarter results. The
full-year increase reflected the benefit of the higher interest
rate environment on floating rate investments. Investment yield on
the portfolio excluding limited partnership interests was 4.74%,
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 $417.6 million pretax at December 31,
2023, primarily due to higher interest rates. Net investment gains
were $4.6 million after tax for the quarter.
Adjusted book value per share of $36.29 at year end
At December 31, 2023, shareholders’ equity was $1.18 billion, or
$28.78 per share, as the net unrealized investment losses on fixed
maturity securities continued to reflect the higher interest rate
environment. Excluding the unrealized losses and effect of net
reserve remeasurements attributable to discount rates*,
shareholders’ equity was $1.48 billion, or $36.29 per share*.
During 2023, Horace Mann repurchased 196,934 shares at an average
price of $32.85. As of December 31, 2023, $34.9 million remained
authorized for future repurchases under the share repurchase
program.
At December 31, 2023, total debt was $546.0 million, reflecting
$300.0 million of 7.25% senior notes issued in September 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 26.9% at
December 31, 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
fourth-quarter and full-year financial results with investors on
February 8, 2024 at 11:00 a.m. Eastern Time. The conference call
will be webcast live at investors.horacemann.com and available
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
December 31,
Twelve Months Ended
December 31,
2023
2022
% Change
2023
2022
% Change
Earnings Summary
Net income (loss)
$
39.5
$
(16.7
)
N.M.
$
45.0
$
19.8
127.3
%
Net investment gains (losses), after
tax
4.6
(10.0
)
N.M.
(18.8
)
(44.5
)
N.M.
Other expense - goodwill and intangible
asset impairments, after tax
—
(3.8
)
N.M.
—
(3.8
)
N.M.
Core earnings (loss)*
34.9
(2.9
)
N.M.
63.8
68.1
-6.3
%
Adjusted core earnings (loss)*
37.8
(1.5
)
N.M.
72.0
79.8
-9.8
%
Per diluted share:(1)
Net income (loss)
$
0.95
$
(0.40
)
N.M.
$
1.09
$
0.47
131.9
%
Net investment gains (losses), after
tax
0.11
(0.25
)
N.M.
(0.45
)
(1.07
)
N.M.
Other expense - goodwill and intangible
asset
impairments, after tax
—
(0.09
)
N.M.
—
(0.09
)
N.M.
Core earnings (loss)*
0.84
(0.06
)
N.M.
1.54
1.63
-5.5
%
Adjusted core earnings (loss)*
0.91
(0.04
)
N.M.
1.74
1.91
-8.9
%
Weighted average number of shares and
equivalent
shares (in millions) - Basic
41.3
41.4
-0.2
%
41.3
41.6
-0.7
%
Weighted average number of shares and
equivalent
shares (in millions) - Diluted
41.5
41.6
-0.2
%
41.4
41.8
-1.0
%
Return on Equity
Net income return on equity - LTM(2)
4.0
%
1.6
%
4.0
%
1.6
%
Net income return on equity -
annualized
14.2
%
(6.1
)%
Core return on equity - LTM*(3)
4.3
%
4.5
%
4.3
%
4.5
%
Core return on equity - annualized*
9.5
%
(0.8
)%
Adjusted core return on equity -
LTM*(4)
4.9
%
5.2
%
4.9
%
5.2
%
Adjusted core return on equity -
annualized*
10.3
%
(0.4
)%
Financial Position
Per share:(5)
Book value
$
28.78
$
26.85
7.2
%
Effect of net unrealized investment
(losses) on
fixed maturity securities
(8.04
)
(10.99
)
N.M.
Per share impact of net reserve
remeasurements attributable to discount
rates*
0.53
1.44
N.M.
Adjusted book value*
$
36.29
$
36.40
-0.3
%
Dividends paid
$
0.33
$
0.32
3.1
%
$
1.32
$
1.28
3.1
%
Ending number of shares outstanding (in
millions)(5)
40.8
40.9
-0.2
%
Total assets
$
14,045.5
$
13,306.1
5.6
%
Short-term debt
—
249.0
-100.0
%
Long-term debt
546.0
249.0
119.3
%
Total shareholders’ equity
1,175.3
1,098.3
7.0
%
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 40,836,734
at December 31, 2023 and 40,904,312 at December 31, 2022.
HORACE MANN EDUCATORS
CORPORATION
Consolidated Statements of
Operations and Data (Unaudited)
($ in millions, except per share
data)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
Consolidated Statements of
Operations
Net premiums and contract charges
earned
$
274.5
$
259.1
5.9
%
$
1,057.1
$
1,027.7
2.9
%
Net investment income
117.0
100.2
16.8
%
444.8
400.9
11.0
%
Net investment gains (losses)
5.7
(12.7
)
N.M.
(24.0
)
(56.5
)
N.M.
Other income
5.7
(0.2
)
N.M.
14.0
9.5
47.4
%
Total revenues
402.9
346.4
16.3
%
1,491.9
1,381.6
8.0
%
Benefits, claims and settlement
expenses
181.5
201.3
-9.8
%
769.1
747.0
3.0
%
Interest credited
53.6
47.5
12.8
%
205.7
173.4
18.6
%
Operating expenses
82.5
86.1
-4.2
%
318.1
315.5
0.8
%
DAC amortization expense
25.8
22.5
14.7
%
101.2
88.2
14.7
%
Intangible asset amortization expense
3.7
4.2
-11.9
%
14.8
16.8
-11.9
%
Interest expense
8.6
5.9
45.8
%
29.7
19.4
53.1
%
Other expense - goodwill and intangible
asset impairments
—
4.8
N.M.
—
4.8
N.M.
Total benefits, losses and expenses
355.7
372.3
-4.5
%
1,438.6
1,365.1
5.4
%
Income (loss) before income taxes
47.2
(25.9
)
N.M.
53.3
16.5
N.M.
Income tax expense (benefit)
7.7
(9.2
)
N.M.
8.3
(3.3
)
N.M.
Net income (loss)
$
39.5
$
(16.7
)
N.M.
$
45.0
$
19.8
127.3
%
Net Premiums Written and Contract
Deposits*
Property & Casualty
$
176.0
$
153.5
14.7
%
$
684.4
$
617.5
10.8
%
Life & Retirement
140.5
136.8
2.7
%
573.3
544.8
5.2
%
Supplemental & Group Benefits
63.7
67.9
-6.2
%
259.8
274.7
-5.4
%
Total
$
380.2
$
358.2
6.1
%
$
1,517.5
$
1,437.0
5.6
%
Segment Net Income (Loss)
Property & Casualty
$
8.8
$
(25.0
)
135.2
%
$
(35.5
)
$
(44.4
)
20.0
%
Life & Retirement
19.2
6.7
186.6
%
71.5
63.8
12.1
%
Supplemental & Group Benefits
13.3
17.0
-21.8
%
54.9
65.9
-16.7
%
Corporate & Other(1)
(1.8
)
(15.4
)
88.3
%
(45.9
)
(65.5
)
29.9
%
Consolidated net income
$
39.5
$
(16.7
)
N.M.
$
45.0
$
19.8
127.3
%
Net investment losses
Before tax
$
5.7
$
(12.7
)
N.M.
$
(24.0
)
$
(56.5
)
N.M.
After tax
4.6
(10.0
)
N.M.
(18.8
)
(44.5
)
N.M.
Per share, diluted
$
0.11
$
(0.25
)
N.M.
$
(0.45
)
$
(1.07
)
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
December 31,
Twelve Months Ended
December 31,
2023
2022
% Change
2023
2022
% Change
Property & Casualty
Net premiums written*
$
176.0
$
153.5
14.7
%
$
684.4
$
617.5
10.8
%
Net premiums earned
171.5
155.7
10.1
%
645.6
608.2
6.1
%
Net investment income
11.3
8.5
32.9
%
37.9
31.4
20.7
%
Other income
0.5
0.7
-28.6
%
2.8
3.4
-17.6
%
Losses and loss adjustment expenses
(LAE)
127.0
153.5
-17.3
%
557.0
534.3
4.2
%
Operating expenses (includes
amortization
expense)
46.1
45.8
0.7
%
174.6
166.9
4.6
%
Loss before income taxes
10.2
(34.4
)
129.7
%
(45.3
)
(58.2
)
22.2
%
Net income (loss) / core income
(loss)*
8.8
(25.0
)
135.2
%
(35.5
)
(44.4
)
20.0
%
Net investment income, after tax
9.2
7.0
31.4
%
31.1
26.4
17.8
%
Catastrophe losses
After tax
3.9
9.8
-60.2
%
77.1
63.2
22.0
%
Before tax
5.0
12.4
-59.7
%
97.6
80.0
22.0
%
Prior years’ reserve development, before
tax(1)
Auto
—
14.0
N.M.
—
28.0
N.M.
Property and other
—
—
N.M.
—
(6.0
)
N.M.
Total
—
14.0
N.M.
—
22.0
N.M.
Operating statistics:
Loss and loss adjustment expense ratio
74.0
%
98.6
%
-24.6 pts
86.3
%
87.9
%
-1.6 pts
Expense ratio
26.9
%
29.4
%
-2.5 pts
27.0
%
27.4
%
-0.4 pts
Combined ratio
100.9
%
128.0
%
-27.1 pts
113.3
%
115.3
%
-2.0 pts
Effect on the combined ratio of:
Catastrophe losses
2.9
%
8.0
%
-5.1 pts
15.1
%
13.0
%
2.1 pts
Prior years’ reserve development(1)
—
%
9.0
%
-9.0 pts
—
%
3.6
%
-3.6 pts
Combined ratio excluding the effects
of
catastrophe losses and prior years’
reserve
development (underlying combined
ratio)*
98.0
%
111.0
%
-13.0 pts
98.2
%
98.7
%
-0.5 pts
Risks in force (in thousands)
526
538
-2.2
%
Auto(2)
358
367
-2.5
%
Property
168
171
-1.8
%
Household Retention - LTM
Auto(3)
86.3
%
87.0
%
-0.7 pts
Property(3)
90.3
%
89.6
%
0.7 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
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
Life & Retirement
Net premiums written and contract
deposits*
$
140.5
$
136.8
2.7
%
$
573.3
$
544.8
5.2
%
Net premiums and contract charges
earned
38.4
35.1
9.4
%
151.7
144.0
5.3
%
Net investment income
95.8
84.3
13.6
%
369.9
338.3
9.3
%
Other income
4.9
3.6
36.1
%
17.0
17.0
—
%
Death benefits / mortality cost(1)
16.4
14.9
10.1
%
69.4
68.6
1.2
%
Interest credited
52.4
46.9
11.7
%
201.8
172.1
17.3
%
Change in reserves
15.8
15.5
1.9
%
53.8
52.9
1.7
%
Operating expenses
26.0
27.8
-6.5
%
98.7
102.4
-3.6
%
DAC amortization expense
6.2
5.9
5.1
%
28.1
23.0
22.2
%
Intangible asset amortization expense
—
0.3
-100.0
%
0.2
1.1
-81.8
%
Other expense - goodwill and intangible
asset impairments
—
4.8
N.M.
—
4.8
N.M.
Income before income taxes
22.3
6.9
N.M.
86.6
74.4
16.4
%
Income tax expense
3.1
0.2
N.M.
15.1
10.6
42.5
%
Net income
19.2
6.7
N.M.
71.5
63.8
12.1
%
Core earnings*
19.2
10.5
82.9
%
71.5
67.6
5.8
%
Adjusted core earnings*
19.2
8.8
118.2
%
68.2
66.9
1.9
%
Life policies in force (in thousands)
162
162
—
%
Life insurance in force
$
20,476
$
20,030
2.2
%
Lapse ratio - 12 months(1)
4.3
%
4.0
%
0.3 pts
Annuity contracts in force (in
thousands)
223
228
-2.2
%
Horace Mann Retirement Advantage®
contracts in
force (in thousands)
19
17
11.8
%
Total Persistency - LTM
91.5
%
93.7
%
-2.2 pts
N.M. - Not meaningful.
(1)
Ordinary life insurance.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in millions)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
Supplemental & Group
Benefits
Net premiums and contract charges
earned
$
64.6
$
68.3
-5.4
%
$
259.8
$
275.5
-5.7
%
Net investment income
10.4
7.9
31.6
%
38.9
33.3
16.8
%
Other income
(2.9
)
(5.0
)
42.0
%
(11.1
)
(13.4
)
17.2
%
Benefits, settlement expenses and change
in reserves
22.3
17.4
28.2
%
88.9
91.2
-2.5
%
Interest credited
1.2
0.6
100.0
%
3.9
1.3
N.M.
Operating expenses (includes DAC
amortization expense)
28.2
27.2
3.7
%
110.5
103.2
7.1
%
Intangible asset amortization expense
3.7
3.9
-5.1
%
14.6
15.7
-7.0
%
Income before income taxes
16.7
22.1
-24.4
%
69.7
84.0
-17.0
%
Net income / core earnings*
13.3
17.0
-21.8
%
54.9
65.9
-16.7
%
Adjusted core earnings*
16.2
20.1
-19.4
%
66.4
78.3
-15.2
%
Benefit ratio(1)
36.2
%
26.2
%
10.0 pts
35.7
%
33.5
%
2.2 pts
Operating expense ratio(2)
39.1
%
38.4
%
0.7 pts
38.4
%
35.0
%
3.4 pts
Pretax profit margin(3)
23.3
%
30.9
%
-7.6 pts
24.3
%
28.5
%
-4.2 pts
Worksite Direct products benefit ratio
36.3
%
16.9
%
19.4 pts
29.1
%
23.0
%
6.1 pts
Worksite Direct premium persistency
(rolling 12 months)
91.4
%
90.4
%
1.0 pts
91.4
%
90.4
%
1.0 pts
Employer-sponsored products benefit
ratio
36.2
%
33.3
%
2.9 pts
41.4
%
41.8
%
-0.4 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
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
Corporate & Other(1)
Components of loss before tax:
Net investment gains (losses)
$
5.7
$
(12.7
)
N.M.
$
(24.0
)
$
(56.5
)
N.M.
Interest expense
(8.6
)
(5.9
)
-45.8
%
(29.7
)
(19.4
)
-53.1
%
Other operating expenses, net investment
income
and other income
0.9
(1.9
)
147.4
%
(4.0
)
(7.8
)
48.7
%
Loss before income taxes
(2.0
)
(20.5
)
90.2
%
(57.7
)
(83.7
)
31.1
%
Net loss
(1.8
)
(15.4
)
88.3
%
(45.9
)
(65.5
)
29.9
%
Core loss*
(6.4
)
(5.4
)
-18.5
%
(27.1
)
(21.0
)
-29.0
%
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
December 31,
Twelve Months Ended
December 31,
2023
2022
% Change
2023
2022
% Change
Investments
Life & Retirement
Fixed maturity securities, at fair value
(amortized
cost, net 2023, $4,293.5; 2022,
$4,404.7)
$
3,960.3
$
3,960.1
—
%
Equity securities, at fair value
62.8
75.6
-16.9
%
Short-term investments
36.5
70.4
-48.2
%
Policy loans
140.5
138.4
1.5
%
Limited partnership interests
816.1
697.2
17.1
%
Other investments
86.7
62.0
39.8
%
Total Life & Retirement
investments
5,102.9
5,003.7
2.0
%
Property & Casualty
Fixed maturity securities, at fair value
(amortized
cost, net 2023, $659.6; 2022, $591.6)
640.8
551.3
16.2
%
Equity securities, at fair value
16.5
16.7
-1.2
%
Short-term investments
49.1
18.2
N.M.
Limited partnership interests
200.6
190.1
5.5
%
Other investments
1.0
1.0
—
%
Total Property & Casualty
investments
908.0
777.3
16.8
%
Supplemental & Group Benefits
Fixed maturity securities, at fair value
(amortized
cost, net 2023, $699.6; 2022, $760.4)
634.0
673.4
-5.9
%
Equity securities, at fair value
5.9
6.3
-6.3
%
Short-term investments
45.3
20.0
126.5
%
Policy loans
0.9
0.9
—
%
Limited partnership interests
122.1
96.4
26.7
%
Other investments
8.2
7.6
7.9
%
Total Supplemental & Group Benefits
investments
816.4
804.6
1.5
%
Corporate & Other
Fixed maturity securities, at fair value
(amortized
cost, net 2023, $0.2; 2022, $0.2)
0.2
0.2
—
%
Equity securities, at fair value
1.0
1.0
—
%
Short-term investments
2.0
0.8
150.0
%
Total Corporate & Other
investments
3.2
2.0
60.0
%
Total investments
$
6,830.5
$
6,587.6
3.7
%
Net investment income - investment
portfolio
Before tax
$
90.9
$
74.1
22.7
%
$
339.9
$
297.4
14.3
%
After tax
72.0
58.9
22.2
%
269.6
236.6
13.9
%
Investment income - deposit asset on
reinsurance
Before tax
$
26.1
26.1
—
%
$
104.9
103.5
1.4
%
After tax
20.7
20.6
0.5
%
82.9
81.7
1.5
%
N.M. - Not meaningful.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240207363192/en/
Heather J. Wietzel, Vice President, Investor Relations
217-788-5144 | investorrelations@horacemann.com
Horace Mann Educators (NYSE:HMN)
Graphique Historique de l'Action
De Déc 2024 à Jan 2025
Horace Mann Educators (NYSE:HMN)
Graphique Historique de l'Action
De Jan 2024 à Jan 2025
