Company Overview - The company serves approximately 1 million households, with about 80% of its customer base being educators[25]. - The company has approximately 1,750 employees across four offices in the U.S.[36]. - The company focuses on a niche market strategy tailored for educators, which allows for precise underwriting and targeted marketing[30]. Acquisitions and Market Share - In 2019, the company increased its market share by acquiring NTA Life Enterprises, LLC, and in 2022, it acquired Madison National Life Insurance Company, Inc.[18]. - The company acquired Benefit Consultants Group, Inc. in 2019, migrating the administration of its retirement platform to the BCG platform, which had $1.0 billion of recordkeeping assets under administration as of December 31, 2024[93]. Employee Engagement and Benefits - In 2024, 74% of employees participated in the biennial employee experience survey, highlighting strengths in manager trust and support[42]. - The Total Rewards strategy includes competitive compensation, comprehensive benefits, and robust employee training, with all employees eligible for benefits with no waiting period[49][50]. - Over 70% of employees have the opportunity to work remotely, with 87% agreeing they have the flexibility needed to balance work and personal responsibilities[53]. - The company offers up to $1,000 annually to employee health savings accounts and provides mental and physical health resources[52]. Financial Performance - The Property & Casualty segment generated $741.5 million in direct premiums for the year ended December 31, 2024, with a total of 345,593 auto risks and 166,991 property risks in force[65][64]. - Direct premiums and contract deposits for the employer-sponsored segment totaled $159.4 million, while the worksite direct segment totaled $121.8 million[107][108]. - The average face amount of individual life insurance policies issued was approximately $204,000, with life insurance in force rising to $21.1 billion at year-end 2024[88]. - Total accumulated fixed and variable annuity cash value on deposit at December 31, 2024, was $5.5 billion, net of reinsurance[89]. Catastrophe and Risk Management - Catastrophe losses for 2024 amounted to $94.9 million, with significant events including Hurricane Helene causing $27.8 million in losses[68]. - The company maintains a catastrophe excess of loss reinsurance coverage with a retention of $35.0 million, providing 89% coverage for losses between $25.0 million and $35.0 million for 2024[74]. - The company is actively monitoring trends in climate-related risks, which are expected to impact insurance claims and costs due to more frequent and severe weather events[147]. - The company utilizes property and casualty catastrophe models and third-party software for cash flow projections to support its risk analysis and capital adequacy evaluations[152]. Investment Strategy - The total investments as of December 31, 2024, amount to $6,916.4 million, with publicly traded securities comprising 72.9% of the total investment portfolio[126]. - The investment strategy focuses on generating income while balancing principal protection and investment risk, primarily through investment grade fixed maturity securities[122]. - The investment grade fixed maturity securities represent 95.1% of the fixed maturity securities portfolio, with an average credit quality of A+ and an average option-adjusted duration of 5.6 years[129]. Regulatory and Compliance - The company is subject to various federal and state laws regarding privacy, data protection, and cybersecurity, which may require additional compliance efforts[141]. - The regulatory landscape for artificial intelligence (AI) is evolving, with the company leveraging AI in underwriting, claims processing, and customer engagement while ensuring compliance with ethical guidelines[142]. - The evolving regulatory environment regarding cybersecurity and data protection may increase compliance costs and expose the company to liabilities in the event of a significant cyber-attack[207]. Challenges and Risks - The company's financial condition and results of operations are significantly affected by volatile financial markets and adverse economic environments, which can lead to increased claims and reduced demand for products[160]. - Interest rate fluctuations could materially impact the company's financial condition, with low rates reducing investment income and high rates increasing borrowing costs[164][167]. - Higher inflation over the past few years has significantly increased loss costs in auto and property businesses, with the potential for further increases if inflation remains elevated[191]. - Climate change presents risks that could lead to increased frequency and severity of weather-related catastrophes, resulting in higher overall losses and potentially higher reinsurance costs[199]. Cybersecurity - Cybersecurity threats have increased in frequency and sophistication, posing risks to the company's information technology systems and potentially leading to operational disruptions and reputational damage[204]. - The company cannot guarantee that its insurance coverage will be adequate for all financial and non-financial consequences from a cybersecurity event[209].

3 Full-year 2024 Investor Presentation February 5, 2025 Information as of December 31, 2024, unless otherwise noted Safe Harbor Statement and Non-GAAP Measures Certain statements included in this presentation, 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 educat ...

Financial Data and Key Metrics Changes - The company reported record fourth-quarter core earnings of $1.62 per share, a 93% increase over the prior year [9] - Full-year 2024 core EPS was $3.18, more than doubling 2023 earnings, with a core return on equity of 8.8% [9][23] - The full-year combined ratio for property and casualty (P&C) was 98%, a 15-point improvement over the prior year [9] Business Line Data and Key Metrics Changes - P&C net premiums earned increased by 14%, with premiums and contract deposits rising by 8% over the prior year [10][11] - Full-year core earnings for the P&C segment were $49.1 million, an $85 million improvement over the prior year [28] - In the life and retirement segment, core earnings were $56.3 million, down from the prior year due to lower net interest margins [35] Market Data and Key Metrics Changes - The company experienced a 29% increase in annual segment sales, reaching $100.9 million [32] - Net written premiums in auto increased by 11.8% to $490.7 million, while property net written premiums rose by 17.7% to $288.6 million [32][33] - The company reported a pre-tax profit margin of 35.7% in individual supplemental, down one percentage point from the prior year but still above profitability targets [39] Company Strategy and Development Direction - The company aims to achieve a mid-90s combined ratio in P&C while mitigating earnings volatility [14] - Strategic investments will focus on driving profitable growth while maintaining business profitability [13] - The company plans to introduce a next-generation cancer product in the individual supplemental line later this year [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 core earnings guidance of $3.60 to $3.90 per share, with a return on equity of at least 10% [13][25] - The company anticipates catastrophe losses of $90 million for 2025, reflecting expected benefits from underwriting actions [26] - Management highlighted the importance of improved weather risk modeling and operational efficiencies in driving future growth [15][20] Other Important Information - The company recorded $18 million in reserves related to non-core legacy commercial exposures [42] - Adjusted book value at year-end 2024 was $37.54, reflecting intrinsic value adjustments [45] - The company plans to host an Investor Day in May to discuss strategic initiatives in detail [50] Q&A Session Summary Question: Confidence in CML returns improving - Management expressed confidence in the direction of the commercial mortgage loan (CML) portfolio, citing improved economic conditions and valuation adjustments [54] Question: Catastrophe losses and business growth impact - Management noted that catastrophe losses are expected to be lower due to effective mitigation efforts and adjustments based on historical averages [57][60] Question: Updates on growth execution across business lines - Management indicated excitement about presenting detailed growth plans at the upcoming Investor Day, emphasizing strong growth numbers in 2024 [64][67] Question: Industry pricing and property side options - Management highlighted the company's long-standing relationship with educators and the importance of product bundling while managing volatility [70][75] Question: Changes to deductibles and roof schedules - Management confirmed positive impacts from changes in deductibles and roof schedules, contributing to improved reserve development [78][81] Question: Impact of lower utilization in supplemental business - Management noted favorable morbidity experience and strong demand for supplemental products, with record sales in the fourth quarter [88][90] Question: Lower auto frequency and pricing strategy - Management acknowledged lower frequency of claims but emphasized a cautious approach to pricing, focusing on maintaining competitive rates [94][95] Question: Confidence in 2025 EPS guidance - Management expressed strong confidence in the 2025 EPS guidance, citing reduced variability in earnings projections due to successful profit restoration efforts [100][102]

Core Viewpoint - Horace Mann (HMN) reported quarterly earnings of $1.62 per share, significantly exceeding the Zacks Consensus Estimate of $0.99 per share, and showing an increase from $0.84 per share a year ago [1][2]. Earnings Performance - The earnings surprise for the quarter was 63.64%, with the company having surpassed consensus EPS estimates two times over the last four quarters [2]. - The company posted revenues of $409 million for the quarter, which was 2.48% below the Zacks Consensus Estimate, and a slight increase from $402.9 million year-over-year [3]. Stock Performance - Horace Mann shares have declined approximately 2.9% since the beginning of the year, contrasting with the S&P 500's gain of 2.7% [4]. - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [7]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.98, with projected revenues of $422.55 million, and for the current fiscal year, the estimate is $3.82 on $1.74 billion in revenues [8]. - The trend of estimate revisions for Horace Mann has been favorable leading up to the earnings release, which may influence future stock movements [6][7]. Industry Context - The Insurance - Multi line industry, to which Horace Mann belongs, is currently ranked in the bottom 45% of over 250 Zacks industries, suggesting potential challenges ahead [9].

Financial Performance - Total revenues for Q4 2024 were $409.0 million, a 1.5% increase from $402.9 million in Q4 2023; full-year revenues rose 6.9% to $1,595.2 million from $1,491.9 million[2] - Net income for Q4 2024 was $38.2 million, down 3.3% from $39.5 million in Q4 2023; however, full-year net income surged 128.4% to $102.8 million from $45.0 million[2] - Core earnings for Q4 2024 reached $67.6 million, a 93.7% increase from $34.9 million in Q4 2023; full-year core earnings increased 107.1% to $132.1 million from $63.8 million[2] Ratios and Metrics - The Property & Casualty combined ratio improved to 97.9% for the full year, a 15-point improvement over the previous year[5] - Core ROE for the last twelve months was 8.8%, an increase of 4.5 percentage points from the previous year[2] Premiums and Charges - Net premiums and contract charges earned increased by 8% for the year and 10% for the quarter[5] Shareholder Value - The company reported a book value per share of $31.51, up 9.5% from $28.78 in the previous year[2] - Adjusted book value per share was $37.54 at year-end, reflecting a 3.4% increase from $36.29[2] - Adjusted core EPS for 2025 is estimated to be in the range of $3.60 to $3.90, with expectations of double-digit shareholder return on equity[6] Non-Core Costs - The company recorded $15.7 million in after-tax costs related to non-core legacy commercial liability policies in Q4 2024[3]

Company Overview - Horace Mann Educators Corporation (HMN) is experiencing significant attention from investors due to high implied volatility in its options market, particularly the Feb 21, 2025 $35.00 Call option [1] Implied Volatility Insights - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant price change for Horace Mann Educators shares [2] - High implied volatility may also signal an upcoming event that could lead to a substantial rally or sell-off [2] Analyst Sentiment - Currently, Horace Mann Educators holds a Zacks Rank 2 (Buy) within the Insurance-Multi line industry, which is in the top 28% of the Zacks Industry Rank [3] - Over the past 60 days, no analysts have raised their earnings estimates for the current quarter, while two have lowered their estimates, resulting in a decrease of the Zacks Consensus Estimate from $1.10 to $0.99 per share [3] Trading Strategy Implications - The high implied volatility may indicate a developing trading opportunity, as options traders often seek to sell premium on options with elevated implied volatility to capture decay [4] - Seasoned traders typically hope that the underlying stock does not move as much as initially expected by expiration [4]

Company Overview - Horace Mann Educators Corporation (HMN) has a market capitalization of $1.5 billion and is the largest multiline financial services company focused on America's educators, operating in a niche market with a diversified earnings model [2] - HMN's share price as of January 8, 2025, was $37.76, down 12.7% from its 52-week high of $43.26, indicating a short-term bearish trend as it trades below its 50-day simple moving average [1][3] Performance Metrics - HMN shares have gained 8.7% over the past three months, outperforming its industry's decrease of 2.3%, the sector's rise of 2.6%, and the S&P 500 composite's gain of 3.2% during the same period [5] - The Zacks average price target for HMN is $44 per share, suggesting a potential upside of 15.6% from the recent closing price [8] Growth Projections - The Zacks Consensus Estimate for HMN's 2025 earnings is $3.82, reflecting a year-over-year improvement of 11.1% on revenues projected to be about $10 billion, which is a 6.1% increase [9] - HMN aims to achieve a combined ratio of 97% to 98% in 2025, supported by solid retention and a well-planned approach to auto rate increases [10] Financial Health - The company estimates generating about $50 million in excess capital annually to support growth initiatives, share buybacks, and dividend increases, with free cash flow conversion remaining above 100% [13] - HMN's return on invested capital (ROIC) has improved but was 1.2% in the trailing 12 months, below the industry average of 2.4% [15] - The return on equity (ROE) for HMN was 8.1% in the trailing 12 months, also below the industry average of 15.3%, with a target of achieving double-digit ROE by 2025 [16] Valuation - HMN shares are trading at a discount with a book-to-price ratio of 1.2X compared to the industry average of 2.3X, earning a Value Score of A [17] - Despite being cheaper than the industry average, HMN shares are still considered expensive compared to competitors like Brighthouse Financial, Inc. and Lincoln National Corporation [17] Dividend Policy - HMN has increased dividends for 16 consecutive years at a compound annual growth rate (CAGR) of 14%, with a current dividend yield of 3.6%, higher than the industry average of 2.5% [19] - The company targets a 50% dividend payout over the medium term, indicating a strong commitment to returning value to shareholders [19] Market Position - The K-12 educator market presents substantial growth potential for HMN, which is well-positioned to capitalize on strategic initiatives aimed at profitability and maintaining a solid capital position [18]

| --- | --- | --- | --- | |-----------------------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Third Quarter 2024 | | | | | | | | | | Investor Presentation | | | | | | | | | | | | | | | November 4, 2024 | | | | | | | | | | | | | | | | | | | | | | | | Information as of September 30, 2024, unless otherwise noted Safe Harbor Statement and Non-GAAP Measures Certain statements included in this presentation, including those regarding our earnings outlook, expected catast ...

Horace Mann (HMN) came out with quarterly earnings of $0.76 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.44 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this provider of auto and homeowners' insurance for teachers and other educators would post earnings of $0.18 per share when it actually produced earnings of $0.20, delivering a surprise of 11.11%.Over the last four quarters, the company has surpassed co ...

Wall Street expects a year-over-year increase in earnings on higher revenues when Horace Mann (HMN) reports results for the quarter ended September 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on November 4, 2024, might help the stock move higher if these key numbers are better than ...