Horace Mann Educators Corporation is a diversified insurance holding company focused on serving the financial needs of the education sector. The company combines a broad product suite with a dedicated sales force to deliver tailored solutions for educators and their families. Its strategic emphasis on the education market provides a defensible niche and supports stable, recurring revenue streams.Offers property and casualty insurance, supplemental health coverage, annuities, and life insurance products, wit ...

Core Viewpoint - Horace Mann (HMN) has approved a 3% increase in its quarterly cash dividend, raising it to 36 cents per share, which indicates an annual dividend of $1.44 per share payable on March 31 to shareholders of record as of March 17 [1] Dividend Information - The quarterly cash dividend has been increased by 3% to 36 cents per share [1] - This increase translates to an indicated annual dividend of $1.44 per share [1] - The dividend payment is scheduled for March 31 for shareholders recorded as of March 17 [1]

Company Overview - Horace Mann Educators Corporation operates across four reporting segments: Property & Casualty, Life & Retirement, Supplemental & Group Benefits, and Corporate & Other[49]. - The company serves approximately 14 million households in the U.S. educator market, maintaining business relationships with over half of U.S. K–12 school districts[27]. - In 2025, Horace Mann had approximately 1,800 employees across various locations, including Springfield, Illinois, and Dallas, Texas[40]. - The company acquired Madison National Life Insurance Company in 2022, enhancing its value proposition for school districts[19]. Technology and Innovation - Horace Mann's technology investments include the expansion of Generative AI across Claims, Customer Care, and Operations, expected to improve service quality and operational efficiency[39]. - The company aims to leverage its extensive historical data assets to support data-informed decisions across the organization[43]. - The company leverages AI across multiple areas, including underwriting and claims processing, while adhering to ethical guidelines set by the FTC to ensure compliance with consumer protection laws[147]. Workforce and Culture - In December 2025, a voluntary Early Retirement Offering was announced as part of workforce planning efforts, with no liability recognized as of that date[48]. - The company emphasizes a commitment to ethical conduct, inclusion, and accountability in its workplace culture[42]. - The company has a Total Rewards strategy designed to attract and retain talent through competitive compensation and benefits[46]. Marketing and Customer Engagement - Horace Mann's marketing strategy includes partnerships with professional associations to drive awareness and engagement within the education community[37]. - The company has increased its offering of third-party partner products to meet additional educator needs, such as coverage for small business owners[55]. Financial Performance - The Property & Casualty segment generated $804.4 million in direct premiums for the year ended December 31, 2025, with California contributing 15.4% of total direct insurance premiums[64][56]. - Direct premiums and contract deposits amounted to $639.2 million for the year ended December 31, 2025[99]. - Direct premiums for Supplemental products were $126.0 million for the year ended December 31, 2025[114]. - The top five states for Supplemental business based on direct premiums were California (30.3%), Texas (12.6%), Florida (7.2%), North Carolina (5.2%), and Louisiana (5.1%) for the year ended December 31, 2025[115]. Insurance Products and Services - The Life & Retirement segment offers a variety of products, including fixed, fixed indexed, and variable annuities, specifically targeting educators[82]. - In 2025, 43.7% of net annuity contract deposits were for 403(b) tax-qualified annuities, indicating strong market participation[86]. - The average face amount of individual life insurance policies issued in 2025 was approximately $213,000, with total life insurance in force reaching $21.5 billion[88]. - The company retained approximately 73.1% of gross and assumed group disability, life, and specialty health benefits in 2025[119]. Investment Strategy - The company’s investment strategy focuses on generating income while balancing principal protection and investment risk[127]. - As of December 31, 2025, the total investment portfolio is valued at $7,304.6 million, with publicly traded securities accounting for 74.6% of the total[131]. - The investment grade fixed maturity securities represent 97.7% of the fixed maturity securities portfolio, with an average credit quality of A+[133]. - The company holds $1,569.1 million in investment grade other asset-backed securities, which is 21.5% of the total investment portfolio[131]. Risk Management - The company recognizes climate change as a significant risk, with ongoing assessments to improve climate-related risk models and avoid over-concentration in high-risk areas[150]. - The company’s Enterprise Risk Management (ERM) Committee oversees risk assessments and mitigation strategies, ensuring that all corporate leaders are engaged in managing risks[157]. - The company faces risks from volatile financial markets, which can adversely affect its investment portfolio and result in increased claims during economic downturns[166]. - The estimation of loss reserves is inherently uncertain, with potential adverse effects on financial condition if actual liabilities exceed reserved amounts[200]. Regulatory and Compliance - The company is subject to various federal and state laws regarding privacy, data protection, and cybersecurity, with new regulations requiring material cybersecurity incidents to be reported within four business days[146]. - The company anticipates that changes in regulatory requirements could negatively impact business operations and financial performance[211]. Market Conditions and Competition - The company faces competitive pressures in the personal lines insurance and retirement markets, with numerous competitors targeting the educator marketplace[180]. - Inflation has significantly increased loss costs in auto and property businesses, with potential for further increases impacting future loss costs[199]. - A large-scale pandemic or terrorist acts could adversely affect sales, liquidity, and operating results, impacting the overall financial condition[204].

Core Insights - Horace Mann reported record core earnings per share (EPS) of $4.71 for 2025, with a 12.4% return on equity (ROE), attributed to unusually low catastrophe losses and strong performance across all business segments [3][7] - The company provided 2026 guidance for core EPS in the range of $4.20 to $4.50, indicating nearly 10% growth compared to normalized 2025 earnings [5][12] Financial Performance - The normalized core EPS for 2025 was approximately $3.95, which serves as a baseline for 2026 comparisons [1][7] - Total revenues increased by 7% year-over-year, with net premiums and contract deposits also rising over 7% [3][4] Segment Performance - Property & Casualty (P&C) segment showed significant improvement with a combined ratio of 84.3%, and core earnings of $112 million, more than double the previous year [6][8] - Life & Retirement segment core earnings rose 13% to $61 million, with record life sales up 21% year-over-year [6][9] - Supplemental & Group Benefits segment generated record sales, contributing 25% of core earnings, with core earnings reported at $59 million [9] Marketing and Distribution - The company expanded its distribution and marketing capabilities, achieving a 35% increase in unaided brand awareness from less than 10% the previous year [10] - New-business customer interactions increased by 37% in Q4, and distribution points rose by 15% [10][11] Capital Management - Horace Mann repurchased $21 million of shares in 2025, with an additional $50 million buyback authorization approved [16] - The company reported a tangible book value per share increase of over 9% year-over-year [16] Community Initiatives - In Q4, Horace Mann donated $5 million to the Horace Mann Educators Foundation, supporting various educational initiatives [17]

Financial Data and Key Metrics Changes - The company reported record 2025 full-year core earnings per share of $4.71, a 39% increase over the prior year, with a shareholder return on equity of 12.4% [4][15] - Total revenues increased by 7% year-over-year, with net premiums and contract deposits earned also up more than 7% [4][15] - Core earnings for 2025 were $196 million, reflecting strong underlying profitability across the business [15][19] Business Line Data and Key Metrics Changes - In Property and Casualty (P&C), the underlying combined ratio improved to 84.3%, a 5-point improvement year-over-year, with sales increasing by 6% [5][19] - Auto reported a combined ratio of 96.5%, improving nearly 2 points over the prior year, with policyholder retention stable at 84% [6][19] - Life and Retirement saw record life sales in Q4, up 21% year-over-year, with retirement deposits increasing by 4% [6][21] - Individual Supplemental sales increased nearly 40% year-over-year, while Group Benefits recorded a 33% increase [4][7] Market Data and Key Metrics Changes - The company expanded its distribution organization significantly, increasing points of distribution by 15% across all channels [8] - Unaided brand awareness reached 35% in 2025, up from less than 10% a year ago, indicating strong market recognition [7][8] Company Strategy and Development Direction - The company aims for a 10% average compound annual growth rate in core EPS and a sustainable 12%-13% shareholder return on equity over the next three years [11][26] - Investments in marketing, infrastructure improvements, and product expansion are prioritized to support sustained profitable growth [11][12] - The introduction of the Horace Mann Club aims to provide educators with financial wellness tools and resources, enhancing community engagement [9] Management Comments on Operating Environment and Future Outlook - Management noted that 2025 benefited from unusually light severe weather activity, with pre-tax catastrophe losses of $62 million contributing positively to core earnings [5][10] - The company does not expect a similarly low level of catastrophe losses in 2026 or subsequent years, indicating a cautious outlook [10][18] - Management expressed confidence in achieving long-term financial targets while navigating a competitive environment [26] Other Important Information - The company repurchased $21 million of shares in 2025, the highest annual level since 2022, with an additional $50 million authorization for share repurchases [14][25] - The early retirement offering was taken up by about 8% of eligible employees, aimed at aligning the workforce with future needs [56][59] Q&A Session Summary Question: Distribution initiatives and policy count growth outlook - Management indicated that 2025 was the strongest year for distribution, with significant sales momentum and increased brand awareness [30][31] Question: EPS outlook for 2026 and growth acceleration - Management confirmed expectations for a 10% annual EPS growth rate and anticipated accelerating top-line growth due to investments made [32][34] Question: Catastrophe loss assumptions in guidance - Management clarified that the $90 million catastrophe loss assumption for 2026 is based on a consistent year-over-year approach, not influenced by prior year developments [36][37] Question: Early retirement offering participation - Approximately 8% of eligible employees participated in the early retirement offering, aimed at workforce planning [56][59] Question: Free cash flow conversion targets - The company achieved about 80% free cash flow conversion in 2025 and targets over 75% for 2026, supported by capital-efficient business growth [63][64] Question: Investment in Supplemental and Group segment - Management expressed satisfaction with progress in Individual Supplemental and Group Benefits, with strong sales and distribution efforts [70][72]

Financial Data and Key Metrics Changes - Horace Mann reported record 2025 full-year core earnings per share of $4.71, a 39% increase over the prior year, with a shareholder return on equity of 12.4% [4][15] - Total revenues increased by 7% year-over-year, with net premiums and contract deposits earned also up more than 7% [4][15] - Core earnings for 2025 were $196 million, reflecting strong underlying profitability across the business [15][19] Business Line Data and Key Metrics Changes - In Property and Casualty (P&C), core earnings were $112 million, more than double the prior year, with a reported combined ratio of 89.7, improving over 8 points year-over-year [19] - Auto net written premiums increased to $502 million, with a combined ratio of 96.5, improving nearly 2 points [19] - Life and retirement segment saw core earnings increase by 13% to $61 million, with net premiums written and contract deposits growing to $612 million, up 7% year-over-year [21] - Individual supplemental sales increased nearly 40% year-over-year, while group benefits recorded a 33% increase [6][22] Market Data and Key Metrics Changes - Unaided brand awareness reached 35% in 2025, up from less than 10% a year ago, indicating significant growth in market recognition [7] - New business customer interactions increased by 37% in the fourth quarter, reflecting improved marketing effectiveness [8] Company Strategy and Development Direction - The company aims for a 10% average compound annual growth rate in core EPS and a sustainable 12%-13% shareholder return on equity over the next three years [11][26] - Investments in marketing, infrastructure improvements, and product expansion are prioritized to support sustained profitable growth [12][14] - The introduction of the Horace Mann Club aims to enhance engagement with educators and provide financial wellness tools [9] Management's Comments on Operating Environment and Future Outlook - Management noted that 2025 benefited from unusually light severe weather activity, with pre-tax catastrophe losses of $62 million contributing positively to core earnings [5] - The company expects a normalized core earnings per share guidance range of $4.20-$4.50 for 2026, reflecting a nearly 10% increase [11][17] - Management expressed confidence in achieving long-term financial targets despite potential macroeconomic uncertainties [26] Other Important Information - The company repurchased $21 million of shares in 2025, the highest annual level since 2022, with an additional $50 million authorization in May [14][25] - The early retirement offering was taken up by about 8% of eligible employees, aimed at aligning the workforce with future needs [56][59] Q&A Session Summary Question: Distribution initiatives and policy count growth outlook - Management indicated strong sales momentum driven by distribution efforts, with brand awareness and website traffic significantly increasing [30][31] Question: EPS outlook for 2026 and growth acceleration - Management confirmed expectations for a 10% annual earnings per share growth rate, with anticipated accelerating top-line growth due to investments made [33][34] Question: Catastrophe loss assumptions and reinsurance program - Management clarified that the catastrophe loss guidance for 2026 is based on a consistent approach, not influenced by one year's results [36][37] Question: Early retirement offering participation - Approximately 8% of eligible employees participated in the early retirement offering, aimed at workforce planning [56][59] Question: Investment in supplemental and group segment - Management expressed satisfaction with progress in individual supplemental and group benefits, with strong sales and distribution efforts [70][72]

Financial Data and Key Metrics Changes - Horace Mann reported record full-year core earnings per share of $4.71, a 39% increase over the prior year, with a shareholder return on equity of 12.4% [4][16] - Total revenues increased by 7% year-over-year, with net premiums and contract deposits earned also up more than 7% [4][16] - Core earnings for 2025 were $196 million, reflecting strong underlying profitability across the business [16] Business Line Data and Key Metrics Changes - In Property and Casualty (P&C), core earnings were $112 million, more than double the prior year, with net written premiums increasing by 7% to $830 million [20] - The reported combined ratio for P&C improved to 89.7, an improvement of over 8 points year-over-year [20] - Life and retirement segment saw core earnings increase by 13% to $61 million, with net premiums written and contract deposits growing to $612 million, up 7% year-over-year [22] - Individual supplemental sales increased by nearly 40% year-over-year, while group benefits recorded a 33% increase [6][24] Market Data and Key Metrics Changes - Unaided brand awareness reached 35% in 2025, up from less than 10% a year ago, indicating significant growth in market recognition [8] - New business customer interactions increased by 37% in the fourth quarter, reflecting enhanced marketing and distribution efforts [9] Company Strategy and Development Direction - The company aims for a 10% average compound annual growth rate in core EPS and a sustainable 12%-13% shareholder return on equity over the next three years [12][28] - Investments in marketing, infrastructure improvements, and product expansion are prioritized to support long-term growth [12][13] - The introduction of the Horace Mann Club aims to provide educators with financial wellness tools and resources, enhancing community engagement [10] Management's Comments on Operating Environment and Future Outlook - Management noted that 2025 benefited from unusually light severe weather activity, with pre-tax catastrophe losses of $62 million contributing positively to core earnings [5] - The company expects a normalized core earnings per share guidance range of $4.20-$4.50 for 2026, reflecting a nearly 10% increase [12][18] - Management expressed confidence in achieving long-term financial targets while navigating a competitive environment [28] Other Important Information - The company repurchased $21 million of shares in 2025, the highest annual level since 2022, with an additional $50 million authorization in May [14][27] - The early retirement offering was taken up by about 8% of eligible employees, aimed at aligning the workforce with future needs [58][59] Q&A Session Summary Question: Distribution initiatives and policy count growth outlook - Management highlighted strong sales momentum driven by distribution efforts, with brand awareness and website traffic significantly increasing [31][32] Question: EPS outlook for 2026 and growth acceleration - Management confirmed expectations for a 10% annual earnings per share growth rate, with accelerating top-line growth anticipated as investments yield results [34][36] Question: Catastrophe loss assumptions and reinsurance program - Management clarified that the $90 million catastrophe loss assumption for 2026 is based on consistent year-over-year approaches and does not include prior year development in planning [39][40] Question: Increase in educator household access - Management noted a significant increase in accessible educator households due to strategic marketing and partnerships, contributing to overall growth [44][51] Question: Long-term target for net interest spread in retirement - Management reaffirmed a target of a 200 basis point spread for fixed annuities, although 2025 performance was impacted by underperformance in commercial mortgage loans [52] Question: Early retirement offering participation - Management reported a satisfactory participation rate in the early retirement offering, aimed at workforce planning and future skill alignment [58][61] Question: Investment in supplemental and group segment - Management expressed confidence in the growth and earnings diversification from individual supplemental and group benefits, with favorable benefit ratios expected to normalize [71][76]

Table of Contents | | Page | | --- | --- | | Consolidated Financial Highlights | 3 | | Consolidated Statements of Operations | 4 | | Consolidated Balance Sheets | 5 | | Capital Metrics | 6 | | Property & Casualty Segment | | | Statements of Operations | 7 | | Auto Products | 8 | | Property & Other Products | 9 | | Life & Retirement Segment | | | Statements of Operations | 10 | | Life Insurance Products | 10 | | Retirement Products | 11 | | Account Value Rollforward | 12 | | Supplemental & Group Benefits | | ...

Core Insights - Horace Mann reported revenue of $434.8 million for the quarter ended December 2025, reflecting a 6.3% increase year-over-year, but fell short of the Zacks Consensus Estimate of $443.7 million by 2.01% [1] - The company's EPS was $1.21, down from $1.62 in the same quarter last year, but exceeded the consensus estimate of $1.18 by 2.98% [1] Financial Performance Metrics - Net premiums and contract charges earned were $317.2 million, slightly above the average estimate of $314.07 million from two analysts [4] - Other income was reported at $6.7 million, surpassing the average estimate of $4.77 million based on two analysts [4] - Net investment income was $118 million, which was below the average estimate of $124.82 million from two analysts [4] Stock Performance - Over the past month, shares of Horace Mann have returned -1.4%, while the Zacks S&P 500 composite increased by 1.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - Total revenues for Q4 2025 were $434.8 million, a 6.3% increase from Q4 2024, while full-year revenues reached $1,701.4 million, up 6.7% year-over-year[2]. - Net income for Q4 2025 was $36.2 million, or $0.87 per share, down 5.2% from Q4 2024; full-year net income was $162.1 million, or $3.90 per share, a 57.7% increase compared to the previous year[2][5]. - Core earnings for Q4 2025 were $50.3 million, or $1.21 per share, a decrease of 27.9% from Q4 2024; however, full-year core earnings reached a record $195.8 million, or $4.71 per share, up 38.6% year-over-year[2][5]. - The company reported net investment losses after tax of $(5.6) million for Q4 2025, compared to $(13.7) million in Q4 2024, indicating improved investment performance[2]. Shareholder Value - The company emphasized its strategy to deliver consistent value to shareholders through a diversified business model and a solid balance sheet[6]. - Book value per share increased to $36.47, representing a 15.7% growth year-over-year, while adjusted book value per share rose to $40.21, a 7.1% increase[2][5]. Strategic Goals - Horace Mann aims for sustained, profitable growth in 2026 and beyond, supported by strong underlying results across all segments[4]. - The company plans to enhance customer experience and expand its products and solutions to a larger share of the education market[9]. - Management will discuss the financial results in a webcast on February 4, 2026, providing further insights into company performance and future strategies[7]. Operational Efficiency - The Property & Casualty segment reported a combined ratio of 89.7% for the full year, improving by more than 8 points compared to the prior year[5].