[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) Presents Horace Mann Educators Corporation's unaudited consolidated financial statements for Q1 2024, including balance sheets, income, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) | Balance Sheet Items ($ in millions) | March 31, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | **Total Investments** | $6,857.9 | $6,830.5 | | **Total Assets** | $14,236.3 | $14,049.9 | | **Total Liabilities** | $13,024.9 | $12,874.6 | | **Total Shareholders' Equity** | $1,211.4 | $1,175.3 | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) | Income Statement Items ($ in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Total Revenues** | $386.0 | $353.9 | | Net Premiums and Contract Charges Earned | $275.2 | $255.9 | | Net Investment Income | $105.4 | $100.4 | | **Total Benefits, Losses and Expenses** | $353.0 | $345.8 | | **Income Before Income Taxes** | $33.0 | $8.1 | | **Net Income** | $26.5 | $6.6 | | **Diluted Net Income Per Share** | $0.64 | $0.16 | | **Comprehensive Income (Loss)** | $48.2 | $58.6 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Items ($ in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $74.5 | $86.4 | | **Net Cash Used in Investing Activities** | $(59.5) | $(95.3) | | **Net Cash Used in Financing Activities** | $(24.3) | $(6.5) | | **Net Decrease in Cash** | $(9.3) | $(15.4) | | **Cash at End of Period** | $20.4 | $27.4 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies, investment performance, fair value measurements, and segment results - The company operates in four reporting segments: Property & Casualty, Life & Retirement, Supplemental & Group Benefits, and Corporate & Other[20](index=20&type=chunk) - As of March 31, 2024, the company had outstanding unfunded investment commitments of **$524.6 million**, primarily in limited partnership interests[105](index=105&type=chunk) - The company is involved in litigation related to legacy commercial lines claims, including asbestos and environmental claims, following the liquidation of R&Q Reinsurance Company; potential loss could be material, but an estimate cannot be reasonably provided at this time[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=42&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial performance, including consolidated results, segment performance, investments, and liquidity [Consolidated Financial Highlights](index=43&type=section&id=Consolidated%20Financial%20Highlights) - Net income for Q1 2024 increased by **$19.9 million** to **$26.5 million**, a **301.5% increase** from Q1 2023, primarily due to improved Property & Casualty segment results[114](index=114&type=chunk) Consolidated Financial Highlights | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenues | $386.0M | $353.9M | | Net Income | $26.5M | $6.6M | | Diluted EPS | $0.64 | $0.16 | | Book Value Per Share | $29.57 | $27.87 | [Consolidated Results of Operations](index=44&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated Q1 2024 results show increased revenues and income before taxes, driven by higher premiums and lower benefits expenses - Net premiums and contract charges earned increased by **$19.3 million**, primarily from the Property & Casualty segment implementing and earning in rate increases[116](index=116&type=chunk) - Net investment income rose by **$5.0 million**, driven by stronger income from the fixed income portfolio, though partially offset by weaker returns in certain commercial mortgage and real estate funds[117](index=117&type=chunk) - Benefits, claims and settlement expenses declined by **$6.9 million**, mainly due to moderated catastrophe and non-catastrophe weather activity in the Property & Casualty segment[121](index=121&type=chunk) [Outlook for 2024](index=46&type=section&id=Outlook%20for%202024) The company reaffirms its full-year 2024 guidance, projecting net income per diluted share, core return on equity, and segment targets - **Consolidated Outlook:** - Full-year 2024 net income is estimated to be between **$3.00** and **$3.30** per diluted share[132](index=132&type=chunk) - Core return on equity is expected to be near **9%**[133](index=133&type=chunk) - Net investment income is projected to be at the low end of the **$465 million** to **$475 million** range[132](index=132&type=chunk) - **Segment Outlook:** - **Property & Casualty:** Net income of **$36M** to **$41M**, with a combined ratio near **100%**[132](index=132&type=chunk) - **Life & Retirement:** Net income of **$77M** to **$81M**, with fixed annuity spread above the **220-230 bps** target range[133](index=133&type=chunk) - **Supplemental & Group Benefits:** Net income of **$47M** to **$50M**, with a pretax profit on revenue between **20%** and **21%**[137](index=137&type=chunk) [Results of Operations by Segment](index=47&type=section&id=Results%20of%20Operations%20by%20Segment) Details performance across Property & Casualty, Life & Retirement, Supplemental & Group Benefits, and Corporate & Other segments [Property & Casualty](index=48&type=section&id=Property%20%26%20Casualty) The Property & Casualty segment achieved profitability in Q1 2024, driven by increased premiums and reduced catastrophe losses P&C Metrics | P&C Metrics | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income (Loss) | $10.6M | $(11.6)M | | Net Premiums Written | $172.1M | $149.1M | | Combined Ratio | 100.8% (Auto), 97.7% (Property) | 110.9% (Auto), 115.8% (Property) | | Catastrophe Losses | $16.2M | $22.4M | - The auto underlying loss ratio improved by **9.0 points** to **71.7%**, reflecting a **17.5%** year-over-year increase in average written premiums[144](index=144&type=chunk) - The property underlying loss ratio was **45.0%**, benefiting from a **16.1%** increase in average written premiums and a decline in non-catastrophe weather losses[145](index=145&type=chunk) [Life & Retirement](index=52&type=section&id=Life%20%26%20Retirement) The Life & Retirement segment's net income decreased due to a lower net interest spread, impacted by valuation adjustments L&R Metrics | L&R Metrics | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income | $11.7M | $14.0M | | Net Premiums Written & Deposits | $131.6M | $136.1M | | Net Investment Income | $85.8M | $87.9M | - The segment's net income decline was primarily driven by a lower net interest spread on fixed annuities[149](index=149&type=chunk)[150](index=150&type=chunk) - Total annuity assets under management were **$5.3 billion**, and life insurance in force rose to **$20.6 billion**[152](index=152&type=chunk) [Supplemental & Group Benefits](index=54&type=section&id=Supplemental%20%26%20Group%20Benefits) The Supplemental & Group Benefits segment's net income declined due to lower investment income and a higher benefits ratio S&GB Metrics | S&GB Metrics | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income | $11.0M | $14.0M | | Total Revenues | $69.0M | $71.2M | | Benefits Ratio | 35.6% | 33.3% | | Pretax Profit Margin | 20.2% | 24.9% | - The decline in net income was driven by lower net investment income and a higher benefits ratio, particularly in the worksite direct product line[157](index=157&type=chunk)[158](index=158&type=chunk) [Corporate & Other](index=56&type=section&id=Corporate%20%26%20Other) The Corporate & Other segment reported a reduced net loss in Q1 2024, primarily due to net investment gains Corporate & Other Metrics | Corporate & Other Metrics ($ in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Loss | $(6.8) | $(9.8) | | Total Revenues | $0.2 | $0.1 | | Interest Expense | $8.7 | $6.6 | | Net Investment Gains (Losses), Pretax | $2.2 | $(3.9) | [Investment Results](index=56&type=section&id=Investment%20Results) Net investment income increased in Q1 2024, driven by the fixed income portfolio, despite rising unrealized losses - Net investment income from the managed portfolio increased **7.0%** to **$79.9 million**, reflecting stronger income from fixed income, partially offset by weaker returns in commercial mortgage and limited partnership portfolios[164](index=164&type=chunk) - Pretax net unrealized investment losses on fixed maturity securities increased to **$442.7 million** as of March 31, 2024, up from **$417.6 million** at year-end 2023, primarily due to a **32 basis point** increase in US Treasury rates[164](index=164&type=chunk)[166](index=166&type=chunk) - The fixed maturity securities portfolio totaled **$5.3 billion** in fair value, was **92.6%** investment grade, and had an average quality rating of **A+**[169](index=169&type=chunk) [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and capital, with positive operating cash flow and a manageable debt-to-capital ratio - Net cash provided by operating activities was **$74.5 million** for Q1 2024, a decrease of **$11.9 million** from Q1 2023[177](index=177&type=chunk)[179](index=179&type=chunk) - Total capital was **$1,757.6 million**, including **$546.2 million** of long-term debt; the debt-to-capital ratio was **31.1%** (or **26.7%** excluding net unrealized investment losses and net reserve remeasurements)[193](index=193&type=chunk) - The company paid dividends of **$0.34 per share**, totaling **$13.9 million** in Q1 2024; no shares were repurchased, with **$34.9 million** remaining authorized[195](index=195&type=chunk)[196](index=196&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is market value risk, managed by coordinating asset and liability cash flows and durations - The primary market risk is market value risk, stemming from potential decreases in the value of invested assets[207](index=207&type=chunk) - Interest rate risk is a significant exposure, affecting the spread between interest earned on investments and interest credited on insurance and investment contracts[208](index=208&type=chunk) - Risk is managed by matching the projected cash inflows of assets with the projected cash outflows of liabilities and maintaining reasonable durations[210](index=210&type=chunk) [Item 4. Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal control - Based on an evaluation as of March 31, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures are effective[212](index=212&type=chunk) - There were no changes during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[213](index=213&type=chunk) [PART II - OTHER INFORMATION](index=68&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) The company faces litigation and claims related to legacy commercial lines policies following the R&Q Reinsurance Company liquidation - The company is defending against a lawsuit and various claims related to legacy commercial lines policies from the late 1960s and early 1970s[102](index=102&type=chunk) - These claims arose following the March 2023 liquidation of R&Q Reinsurance Company (R&Q), which had assumed the obligations[102](index=102&type=chunk)[103](index=103&type=chunk) - The company states that while potential losses could be material, it is not possible to provide a reasonable estimate of any resultant payment at this stage[104](index=104&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2023 Annual Report on Form 10-K - There are no material changes to the risk factors disclosed in the 2023 Annual Report on Form 10-K[217](index=217&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased in Q1 2024, with $34.9 million remaining authorized for future repurchases - No shares were repurchased during the three months ended March 31, 2024[218](index=218&type=chunk) - As of March 31, 2024, **$34.9 million** remained authorized for future share repurchases[218](index=218&type=chunk) [Item 5. Other Information](index=68&type=section&id=Item%205.%20Other%20Information) CEO Marita Zuraitis adopted a new Rule 10b5-1 trading plan for share sales and option exercises - CEO Marita Zuraitis adopted a new 10b5-1 trading plan on March 14, 2024[220](index=220&type=chunk) - The plan allows for the sale of up to **32,000 shares** and the exercise of up to **28,051 vested options**, and it expires no later than March 31, 2025[220](index=220&type=chunk) [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including corporate documents, material contracts, and required certifications

Exhibit 99.2 News release for immediate release Contact information: Rachael Luber, Assistant Vice President, Investor Relations 217-788-5163 | investorrelations@horacemann.com Horace Mann reports first-quarter 2024 results 217-789-2500 www.horacemann.com • Diversified business delivered first-quarter net income of $27 million, or $0.64 per share, and core earnings* of $25 million, or $0.60 per share, with reported book value of $29.57 and adjusted book value* of $36.52 at quarter end • Total revenue rose 9 ...

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Horace Mann (HMN) . This company, which is in the Zacks Insurance - Multi line industry, shows potential for another earnings beat.This provider of auto and homeowners' insurance for teachers and other educators has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The avera ...

PART I [ITEM 1. Business Overview](index=3&type=section&id=ITEM%201.%20I%20Business) Horace Mann Educators Corporation provides insurance and financial solutions to educators through diversified segments and a tailored strategy - Horace Mann Educators Corporation (HMEC) is an insurance holding company, founded in 1945, focused on serving educators and their communities[11](index=11&type=chunk)[13](index=13&type=chunk)[19](index=19&type=chunk) - The company operates through two divisions (Retail and Worksite) and four reporting segments (Property & Casualty, Life & Retirement, Supplemental & Group Benefits, Corporate & Other)[19](index=19&type=chunk)[20](index=20&type=chunk)[59](index=59&type=chunk) - HMEC's corporate strategy focuses on being the company of choice for educators, offering tailored insurance and financial solutions leveraging its niche market and over **75 years of experience**[24](index=24&type=chunk)[30](index=30&type=chunk) - The company serves approximately **1 million households**, with about **80% of its customer base being educators**[25](index=25&type=chunk) - In 2023, the Property & Casualty segment generated **$650.4 million in direct premiums** and had **358,215 auto risks** and **168,219 property risks in force**[69](index=69&type=chunk)[70](index=70&type=chunk) Property & Casualty Catastrophe Losses (Pretax) | Year | Total ($ in millions) | | :--- | :-------------------- | | 2023 | 97.6 | | 2022 | 80.0 | | 2021 | 78.2 | | 2020 | 84.4 | | 2019 | 52.0 | - The Life & Retirement segment reported **$610.7 million in direct premiums and contract deposits** in 2023, with **223,118 annuity contracts** and **$20.5 billion life insurance in force**[91](index=91&type=chunk)[97](index=97&type=chunk)[101](index=101&type=chunk) - The Supplemental & Group Benefits segment reported **$153.9 million in direct premiums** for employer-sponsored products and **$120.1 million for worksite direct products** in 2023[110](index=110&type=chunk)[111](index=111&type=chunk) Investment Portfolio Composition (December 31, 2023) | Category | % of Total Fair Value | | :------------------------------------------- | :-------------------- | | Publicly Traded Fixed Maturity Securities | 71.6% | | Other Invested Assets (e.g., Limited Partnerships) | 28.4% | | **Total Investments** | **100.0%** | - As of December 31, 2023, the fixed maturity securities portfolio was **92.6% investment grade** with an average credit quality of **A+** and an average option-adjusted duration of **6.0 years**[129](index=129&type=chunk) - The aggregate amount of dividends payable from insurance subsidiaries in 2024 without prior regulatory approval is approximately **$112.3 million**[131](index=131&type=chunk) [ITEM 1A. Risk Factors](index=25&type=section&id=ITEM%201A.%20I%20Risk%20Factors) The company faces broad, interconnected risks from volatile financial markets, competition, operations, and regulations, potentially impacting its financial condition - Volatile financial markets and adverse economic conditions can negatively impact investment portfolio value, benefit/claim liabilities, product demand, and borrowing costs[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) - Changes in interest rates can reduce investment income, increase policy benefit reserves, and decrease the fair value of fixed income securities, potentially leading to lower profitability[160](index=160&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk) - The insurance and financial services markets are highly competitive, with larger competitors possessing greater resources and diversified product lines, potentially impacting HMEC's ability to grow and maintain profitability[169](index=169&type=chunk)[170](index=170&type=chunk) - Catastrophe events (e.g., hurricanes, wildfires) and non-catastrophe severe weather events are inherently unpredictable and can lead to significant losses, impacting Property & Casualty underwriting results[181](index=181&type=chunk)[183](index=183&type=chunk) - Property & Casualty loss reserves are estimates with a high degree of uncertainty, and if inadequate, could adversely affect financial condition and results of operations, especially with rising inflation[185](index=185&type=chunk)[187](index=187&type=chunk)[189](index=189&type=chunk) - Cybersecurity breaches pose a significant risk, potentially leading to operational disruptions, data loss, regulatory violations, reputational damage, and increased compliance costs[200](index=200&type=chunk)[201](index=201&type=chunk) - Defaults by third-party debtors (e.g., security issuers, reinsurers) could reduce profitability or negatively affect investment values, with municipal bond portfolios being particularly vulnerable during economic downturns[211](index=211&type=chunk)[212](index=212&type=chunk) - Downgrades in claims-paying, financial strength, or credit ratings could lead to substantial business loss, increased capital costs, and reduced borrowing flexibility[221](index=221&type=chunk)[222](index=222&type=chunk) - Changes in tax laws, extensive state and federal regulation, and evolving privacy/cybersecurity laws can increase costs, limit operating flexibility, and impact product profitability[223](index=223&type=chunk)[226](index=226&type=chunk)[232](index=232&type=chunk) [ITEM 1B. Unresolved Staff Comments](index=37&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments - The company has no unresolved staff comments[240](index=240&type=chunk) [ITEM 1C. Cybersecurity](index=38&type=section&id=ITEM%201C.%20Cybersecurity) The company maintains a cybersecurity risk management program, overseen by the CISO and Audit Committee, to protect systems and data, acknowledging inherent limitations - The company maintains a cybersecurity risk management program, overseen by the Chief Information Security Officer (CISO), to address network, system, application, and data breaches[242](index=242&type=chunk)[243](index=243&type=chunk) - The Board of Directors, through its Audit Committee, exercises oversight of cybersecurity risk and receives regular reports from the CISO[245](index=245&type=chunk) - Despite employing security technologies and conducting risk assessments, the company acknowledges that internal controls provide only reasonable, not absolute, assurance against material financial loss from cybersecurity events[247](index=247&type=chunk) [ITEM 2. Properties](index=38&type=section&id=ITEM%202.%20Properties) The company owns three buildings in Springfield, Illinois, including its headquarters, and leases additional office space in other states, all deemed suitable for operations - As of December 31, 2023, the company owned three buildings in Springfield, Illinois (headquarters, warehouse, and another building) totaling approximately **248,000 square feet**[248](index=248&type=chunk) - The company also leases office space in Dallas, Texas, Cherry Hill, New Jersey, and Madison, Wisconsin, which are utilized by its reporting segments[248](index=248&type=chunk) - Management believes its properties and facilities are suitable and adequate for current operations[248](index=248&type=chunk) [ITEM 3. Legal Proceedings](index=39&type=section&id=ITEM%203.%20Legal%20Proceedings) The company is involved in legal proceedings, including a lawsuit against HMIC for legacy commercial claims following R&Q Reinsurance's liquidation, with potential material but unestimable financial impact - In 2023, Horace Mann Insurance Company (HMIC) was named as a defendant in a lawsuit and received demands related to legacy, long-tail commercial lines claims (asbestos, environmental, sexual molestation)[729](index=729&type=chunk) - These matters arose following the March 23, 2023, Order of Liquidation of R&Q Reinsurance Company, which had assumed obligations under a retrocession treaty[729](index=729&type=chunk)[730](index=730&type=chunk) - The amounts claimed against HMIC, if successful, could be material, but a reasonable estimate of any resultant payment is not possible due to the preliminary nature of the matters[731](index=731&type=chunk) [ITEM 4. Mine Safety Disclosures](index=39&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to Horace Mann Educators Corporation[251](index=251&type=chunk) PART II [ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=39&type=section&id=ITEM%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NYSE (HMN), with historical market and dividend data provided, alongside details of its active share repurchase program - Horace Mann Educators Corporation's common stock is traded on the New York Stock Exchange (NYSE) under the symbol HMN[3](index=3&type=chunk)[252](index=252&type=chunk) Common Stock Market Price and Dividends Paid Per Share | Fiscal Period | High ($) | Low ($) | Dividends Paid Per Share ($) | | :--------------- | :------- | :------ | :--------------------------- | | **2023:** | | | | | Fourth Quarter | 33.79 | 28.67 | 0.33 | | Third Quarter | 30.12 | 27.94 | 0.33 | | Second Quarter | 33.85 | 29.04 | 0.33 | | First Quarter | 38.10 | 32.33 | 0.33 | | **2022:** | | | | | Fourth Quarter | 40.13 | 35.01 | 0.32 | | Third Quarter | 39.51 | 32.60 | 0.32 | | Second Quarter | 42.62 | 34.22 | 0.32 | | First Quarter | 42.95 | 36.58 | 0.32 | - As of February 16, 2024, the company had approximately **32,000 holders** of its common stock[258](index=258&type=chunk) Issuer Purchases of Equity Securities (2023) | Period | Total Number of Shares Purchased | Average Price Paid per Share ($) | Approximate Dollar Value Remaining Under Programs ($) | | :------------- | :------------------------------- | :------------------------------- | :---------------------------------------------------- | | Fourth Quarter | — | — | 34.9 million | | Third Quarter | 33,000 | 28.73 | 34.9 million | | Second Quarter | 35,394 | 32.47 | 35.8 million | | First Quarter | 128,540 | 34.01 | 36.9 million | - As of December 31, 2023, **$34.9 million** remained authorized for future share repurchases under the 2022 Program[260](index=260&type=chunk)[386](index=386&type=chunk) [ITEM 6. [Reserved]](index=41&type=section&id=ITEM%206.%20%5BReserved%5D) This item is reserved and contains no content [ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=42&type=section&id=ITEM%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The MD&A analyzes the company's consolidated financial performance for 2023, highlighting increased net income from investment results, detailing segment performance, critical estimates, and a positive 2024 outlook - Net income increased by **$25.2 million (127.3%)** in 2023 compared to the prior year, primarily due to lower net investment losses and higher net investment income[270](index=270&type=chunk) Consolidated Financial Highlights | Metric | 2023 ($ in millions) | 2022 ($ in millions) | Change % | | :-------------------------------------- | :------------------- | :------------------- | :--------- | | Total revenues | 1,491.9 | 1,381.6 | 8.0% | | Net income (loss) | 45.0 | 19.8 | 127.3% | | Net income (loss) per diluted share | 1.09 | 0.47 | 131.9% | | Book value per share | 28.78 | 26.85 | 7.2% | | Net income return on equity - last twelve months | 4.0% | 1.6% | 2.4 pts | - Net premiums and contract charges earned increased by **$29.4 million (2.9%)** in 2023, driven by Property & Casualty rate and inflation adjustments[274](index=274&type=chunk) - Net investment income increased by **$43.9 million (11.0%)** in 2023, primarily from higher returns on floating rate fixed maturity securities[275](index=275&type=chunk) Annualized Investment Yield (Excluding Limited Partnership Interests) | Metric | 2023 | 2022 | | :------------------------------------------ | :---- | :---- | | Investment yield, excluding limited partnership interests, pretax - annualized* | 4.7% | 4.3% | | Investment yield, excluding limited partnership interests, after tax - annualized* | 3.8% | 3.4% | - The company anticipates 2024 full-year net income to be in the range of **$3.00 to $3.30 per diluted share**, generating a core return on equity near **9%**[295](index=295&type=chunk) - Property & Casualty segment's net loss for 2023 reflected elevated catastrophe and non-catastrophe weather activity, with net premiums written up **10.8%** and net investment income up **20.7%**[331](index=331&type=chunk)[333](index=333&type=chunk) - Life & Retirement segment's net income rose **12.1%** in 2023, driven by a **9.3% increase in net investment income**, though the fixed annuity net interest spread declined to **218 basis points**[341](index=341&type=chunk) - Supplemental & Group Benefits segment's net income was **$54.9 million** in 2023, with net investment income rising **16.8%** and total segment sales up **62.7%**[349](index=349&type=chunk)[350](index=350&type=chunk) - Net cash provided by operating activities increased by **$130.6 million (76.2%)** in 2023, while net cash used in financing activities increased by **$160.0 million (334.7%)**[367](index=367&type=chunk)[369](index=369&type=chunk)[373](index=373&type=chunk) - Total capital was **$1,721.3 million** as of December 31, 2023, with long-term debt of **$546.0 million**, resulting in a debt-to-total capital ratio of **31.7%**, slightly above the long-term target of **25.0%**[381](index=381&type=chunk) [ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk](index=66&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is market value, managed by matching asset and liability durations; sensitivity analysis shows interest rate changes significantly impact shareholders' equity - Market value risk is the company's primary market risk exposure, managed by coordinating projected cash inflows of assets with projected cash outflows of liabilities[402](index=402&type=chunk)[404](index=404&type=chunk) - As of December 31, 2023, the duration of the fixed maturity securities portfolio was approximately **6.0 years**, and the duration of insurance liabilities and debt was approximately **6.5 years**[408](index=408&type=chunk) - A hypothetical immediate decrease of **100 basis points** in interest rates could result in an increase in shareholders' equity of approximately **$79.0 million** after tax (**6.5%**)[410](index=410&type=chunk) - A hypothetical immediate increase of **100 basis points** in interest rates could result in a decrease in shareholders' equity of approximately **$57.7 million** after tax (**4.8%**)[410](index=410&type=chunk) - The company estimates that pretax net income in 2024 and 2025 would decrease by approximately **$7.1 million** for each **100 basis point decline** in reinvestment rates[412](index=412&type=chunk) [ITEM 8. Financial Statements and Supplementary Data](index=71&type=section&id=ITEM%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for 2021-2023, including balance sheets, income, equity, and cash flows, with detailed notes on accounting policies, investments, and segment information, recast due to ASU 2018-12 adoption - KPMG LLP issued an unqualified opinion on the company's consolidated financial statements and internal control over financial reporting as of December 31, 2023[417](index=417&type=chunk)[418](index=418&type=chunk) - The company adopted ASU 2018-12 (Targeted Improvements to the Accounting for Long-Duration Contracts) effective January 1, 2023, on a modified retrospective basis, with prior year balances recast to conform to the new standard[419](index=419&type=chunk)[445](index=445&type=chunk)[531](index=531&type=chunk) Consolidated Balance Sheet Highlights (December 31, 2023 vs. 2022) | Metric | 2023 ($ in millions) | 2022 ($ in millions) | | :----------------------------------------- | :------------------- | :------------------- | | Total investments | 6,830.5 | 6,587.6 | | Total assets | 14,049.9 | 13,306.1 | | Total policy liabilities | 7,831.4 | 7,808.7 | | Total liabilities | 12,874.6 | 12,207.8 | | Total shareholders' equity | 1,175.3 | 1,098.3 | Consolidated Statements of Operations Highlights (Year Ended December 31) | Metric | 2023 ($ in millions) | 2022 ($ in millions) | 2021 ($ in millions) | | :----------------------------------------- | :------------------- | :------------------- | :------------------- | | Net premiums and contract charges earned | 1,057.1 | 1,027.7 | 888.8 | | Net investment income | 444.8 | 400.9 | 422.5 | | Total revenues | 1,491.9 | 1,381.6 | 1,329.3 | | Total benefits, losses and expenses | 1,438.6 | 1,365.1 | 1,119.2 | | Net income | 45.0 | 19.8 | 170.4 | Consolidated Statements of Cash Flows Highlights (Year Ended December 31) | Metric | 2023 ($ in millions) | 2022 ($ in millions) | 2021 ($ in millions) | | :----------------------------------------- | :------------------- | :------------------- | :------------------- | | Net cash provided by operating activities | 302.1 | 171.5 | 204.9 | | Net cash used in investing activities | (107.4) | (214.6) | (302.0) | | Net cash provided by (used in) financing activities | (207.8) | (47.8) | 208.5 | | Net increase (decrease) in cash | (13.1) | (90.9) | 111.4 | - As of December 31, 2023, the fixed maturity securities portfolio had **$480.5 million** of pretax gross unrealized investment losses on **$3,894.7 million** of fair value, primarily due to higher interest rates[355](index=355&type=chunk)[362](index=362&type=chunk)[550](index=550&type=chunk) - The company issued **$300.0 million** aggregate principal amount of **7.25% Senior Notes** due September 15, 2028, and used the net proceeds to fully repay the **$249.0 million** outstanding borrowings under its Revolving Credit Facility[374](index=374&type=chunk)[388](index=388&type=chunk)[696](index=696&type=chunk)[697](index=697&type=chunk) - Goodwill impairment charges of **$2.0 million** and intangible asset impairment charges of **$2.8 million** were recognized in 2022, primarily related to lower than anticipated revenues from the Benefit Consultants Group, Inc. (BCG) reporting unit[286](index=286&type=chunk)[681](index=681&type=chunk)[691](index=691&type=chunk) - The company's insurance subsidiaries' statutory capital and surplus were above required levels as of December 31, 2023 and 2022[135](index=135&type=chunk)[725](index=725&type=chunk) [ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=153&type=section&id=ITEM%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure - There were no changes in or disagreements with accountants on accounting and financial disclosure[764](index=764&type=chunk) [ITEM 9A. Controls and Procedures](index=153&type=section&id=ITEM%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes, affirmed by KPMG LLP's unqualified opinion - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[765](index=765&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended December 31, 2023, that materially affected or are reasonably likely to materially affect internal control over financial reporting[766](index=766&type=chunk) - Management assessed its internal control over financial reporting as effective at December 31, 2023, based on the Internal Control - Integrated Framework (2013) issued by COSO[769](index=769&type=chunk)[770](index=770&type=chunk) - KPMG LLP, an independent registered public accounting firm, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2023[771](index=771&type=chunk)[772](index=772&type=chunk) [ITEM 9B. Other Information](index=156&type=section&id=ITEM%209B.%20Other%20Information) This item is not applicable to the company - This item is not applicable[779](index=779&type=chunk) [ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=156&type=section&id=ITEM%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - This item is not applicable[780](index=780&type=chunk) PART III [ITEM 10. Directors, Executive Officers and Corporate Governance](index=156&type=section&id=ITEM%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance, including the code of ethics, is incorporated by reference from the 2024 Proxy Statement - Information on Directors, Executive Officers, and Corporate Governance is incorporated by reference from the 2024 Annual Meeting of Shareholders Proxy Statement[785](index=785&type=chunk) - The company has adopted a code of ethics and conduct that applies to its principal executive officer, principal financial officer, principal accounting officer, all other employees, and Board members[785](index=785&type=chunk) [ITEM 11. Executive Compensation](index=156&type=section&id=ITEM%2011.%20Executive%20Compensation) Executive compensation details, including director compensation and equity plans, are incorporated by reference from the company's 2024 Proxy Statement - Information on Executive Compensation, including Director Compensation and Compensation Discussion and Analysis, is incorporated by reference from the 2024 Annual Meeting of Shareholders Proxy Statement[783](index=783&type=chunk) [ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=156&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Security ownership details for beneficial owners and management, plus equity compensation plan information, are incorporated by reference from the 2024 Proxy Statement - Information on Security Ownership of Certain Beneficial Owners and Management and Equity Compensation Plan Information is incorporated by reference from the 2024 Annual Meeting of Shareholders Proxy Statement[786](index=786&type=chunk) [ITEM 13. Certain Relationships and Related Transactions and Director Independence](index=157&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2024 Proxy Statement - Information on Certain Relationships and Related Transactions and Director Independence is incorporated by reference from the 2024 Annual Meeting of Shareholders Proxy Statement[787](index=787&type=chunk) [ITEM 14. Principal Accountant Fees and Services](index=157&type=section&id=ITEM%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the company's 2024 Proxy Statement - Information on Principal Accountant Fees and Services is incorporated by reference from the 2024 Annual Meeting of Shareholders Proxy Statement[788](index=788&type=chunk) PART IV [ITEM 15. Exhibits and Financial Statement Schedules](index=157&type=section&id=ITEM%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed with the Form 10-K, including consolidated financials, supplementary insurance data, and corporate governance documents - The report includes consolidated financial statements and supplementary schedules (Summary of Investments, Condensed Financial Information of Registrant, Supplementary Insurance Information, Reinsurance)[790](index=790&type=chunk) - Exhibits include the company's Restated Certificate of Incorporation, Amended and Restated Bylaws, Indentures for Senior Notes, Credit Agreement, and various executive compensation plans[811](index=811&type=chunk)[812](index=812&type=chunk)[814](index=814&type=chunk) - Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 by the CEO and CFO are included[817](index=817&type=chunk)[818](index=818&type=chunk) [ITEM 16. Form 10-K Summary](index=169&type=section&id=ITEM%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K Summary is provided - No Form 10-K Summary is provided[819](index=819&type=chunk) [Signatures](index=170&type=section&id=Signatures) The Annual Report on Form 10-K is duly signed by the President and CEO, Marita Zuraitis, and other principal officers and directors, affirming compliance - The Annual Report on Form 10-K is signed by Marita Zuraitis, President and Chief Executive Officer, and other principal officers and directors, as required by the Securities Exchange Act of 1934[821](index=821&type=chunk)[822](index=822&type=chunk)

Financial Performance - Total revenues for Q3 2023 increased by 10.5% to $378.7 million compared to $342.6 million in Q3 2022[168] - Net income for Q3 2023 decreased by 42.6% to $11.7 million, down from $20.4 million in Q3 2022[171] - Net premiums and contract charges earned rose by 3.3% to $266.0 million for Q3 2023, compared to $257.4 million in Q3 2022[171] - Net investment income increased by 21.8% to $118.9 million for Q3 2023, up from $97.6 million in Q3 2022[171] - Benefits, claims, and settlement expenses increased by 19.2% to $199.2 million for Q3 2023, compared to $167.1 million in Q3 2022[171] - Interest credited rose by 17.6% to $52.7 million for Q3 2023, compared to $44.8 million in Q3 2022[171] - Operating expenses remained relatively stable, increasing by only 0.1% to $75.7 million for Q3 2023[171] Investment Performance - The annualized investment yield, excluding limited partnership interests, was 4.8% for Q3 2023, up from 4.3% in Q3 2022[173] - Net investment income from the managed investment portfolio rose by 29.5% to $91.8 million for the three months ended September 30, 2023, compared to $70.9 million in the same period of 2022[234] - Total net investment income increased by 21.8% to $118.9 million for the three months ended September 30, 2023, compared to $97.6 million in the same period of 2022[234] Segment Performance - Net income for the Property & Casualty segment is now anticipated to be a loss between $32 million and $37 million, primarily due to third-quarter weather losses[193] - Anticipated net income for the Life & Retirement segment in 2023 is projected to be in the range of $63 million to $65 million, with a targeted spread of 220 to 230 basis points[195] - Net income for the Supplemental & Group Benefits segment is now expected to be between $52 million and $55 million, reflecting strong performance in the third quarter[197] - Life & Retirement segment net income for Q3 2023 was $20.9 million, reflecting an 18.1% increase compared to $17.7 million in Q3 2022[217] - Supplemental & Group Benefits segment net income was $15.8 million for the quarter, reflecting a 23.7% decrease from $20.7 million in 2022[228] Premiums and Sales - Property & Casualty segment net premiums written increased by 13.2% to $188.4 million in Q3 2023, compared to $166.4 million in Q3 2022[210] - Average written premiums for auto policies rose by 15.9% in Q3 2023, up from 11.4% in Q2 2023[212] - Average written premiums for property policies increased by 11.3% in Q3 2023, driven by rate increases and inflation adjustments[213] - Sales of worksite direct supplemental products increased by 59.1% to $3.5 million, while sales of employer-sponsored products rose by 109.1% to $4.6 million[230] Expenses and Liabilities - Interest expense increased by $2.2 million and $7.6 million for the three and nine months ended September 30, 2023, primarily due to rising floating interest rates on the Revolving Credit Facility[183] - Corporate interest expense is now expected to be between $29 million and $30 million for the full year[197] - The benefits ratio for the Supplemental & Group Benefits segment increased to 32.3% for the quarter, up from 25.1% in the prior year[228] Cash Flow and Capital - For the nine months ended September 30, 2023, net cash provided by operating activities was $199.2 million, a 72.0% increase from $115.8 million in the prior year[247] - Net cash used in investing activities decreased to $85.6 million from $295.9 million in the prior year, reflecting a significant reduction in investment outflows[249] - Net cash used in financing activities increased by $204.5 million compared to the prior year, primarily due to increased cash outflows from benefits and withdrawals[253] - As of September 30, 2023, total capital was $1,597.4 million, with long-term debt amounting to $546.1 million, representing 34.2% of total capital[261] Shareholder Information - Total dividends paid to shareholders for the nine months ended September 30, 2023, was $40.4 million, with quarterly dividends of $0.33 per share approved in March, May, and September[264] - The company repurchased 196,934 shares of common stock at an average price of $32.85, with $34.9 million remaining authorized for future repurchases[265] Risk Management - Significant market value risk exists due to potential decreases in the value of invested assets, influenced by changes in yields and liquidity[278] - Interest rate changes may lead to losses or reduced income levels based on the difference between earned interest rates and credited interest rates on liabilities[280] - The company manages market value risk by aligning projected cash inflows of assets with projected cash outflows of liabilities[281] - Investment risk from variable annuity deposits is borne by contractholders, not the company[281] Ratings and Outlook - All insurance financial strength ratings for the Property & Casualty and Life insurance subsidiaries are rated 'A' (stable) by A.M. Best as of October 31, 2023[276] - HMEC's parent company is rated 'bbb' (stable) by A.M. Best and 'BBB' (stable) by S&P[276] - HMEC's Property & Casualty group has a negative outlook from Fitch and Moody's, rated 'A' and 'A2' respectively[276]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 1-10890 HORACE MANN EDUCATORS CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction ...

Horace Mann Educators Corporation (NYSE:HMN) Q2 2023 Earnings Conference Call August 2, 2023 12:30 PM ET Company Participants Heather Wietzel - Vice President, Investor Relations Marita Zuraitis - President and Chief Executive Officer Bret Conklin - Executive Vice President and Chief Financial Officer Mark Desrochers - Senior Vice President, Head, P&C and Corporate Chief Actuary Conference Call Participants Matt Carletti - JMP John Barnidge - Piper Sandler Meyer Shields - KBW Operator Hello and welcome to t ...

or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 1-10890 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 HORACE MANN EDUCATORS CORPORATION FORM 10-Q (Exact name of registrant as specified in its charter) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 (State or other jurisdiction ...

Financial Data and Key Metrics Changes - The company reported first quarter core earnings of $0.23 per share, consistent with pre-announcement expectations, but impacted by outsized catastrophe losses [13][22] - Catastrophe losses contributed 14.7 points to the combined ratio, significantly higher than 4.8 points from the previous year's first quarter [23] - Total net investment income was $74.7 million, a 2.3% increase from the previous year, driven by higher contributions from floating rate investments [65] Business Line Data and Key Metrics Changes - Life product sales increased by 22% year-over-year, benefiting from worksite representatives during enrollment activities [7] - The Supplemental and Group Benefits segment is expected to contribute 25% of total earned premiums and contract deposits, with the highest quarterly sales since 2019 [15] - Property segment average written premiums rose by 9.8% year-over-year, with an underlying loss ratio improving to 50.2% [27] Market Data and Key Metrics Changes - The company expects nationwide premium increases of 17% to 20% in the Property segment due to rate increases and non-rate actions [8] - Auto average premiums increased by 8% year-over-year, with a target of 18% to 20% rate increases for 2023 [56][58] - The company anticipates a combined ratio for auto between 106% and 107% in 2023, improving to 97% to 98% in 2024 [57] Company Strategy and Development Direction - The company is focused on increasing educator household acquisition and expanding its share in the education market [4] - A commitment to corporate social responsibility is evident, with initiatives aimed at supporting educators and reducing carbon emissions [19][50] - The hiring of a new COO is aimed at supporting market share expansion in the retail division [52] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2023 outlook, expecting core EPS to be in the range of $2 to $2.30, with a long-term target of $4 EPS in 2024 [9][67] - The company is monitoring loss trends closely and is prepared to adjust pricing or underwriting plans as necessary [26][72] - Management highlighted the importance of maintaining strong relationships with customers and transparency regarding rate increases [49] Other Important Information - The company identified $160 million in public service loan forgiveness opportunities for educators, totaling over $600 million in the student loan solutions program [20] - The net unrealized investment loss position of fixed maturity securities decreased to $453.3 million at quarter end, reflecting stabilization in the interest rate environment [35] Q&A Session Summary Question: What actions are being taken to address issues in auto and home? - Management discussed controlling distribution and implementing non-rate actions to manage underwriting effectively [72][100] Question: How does the company view its market share in the broader educator market? - The company sees potential for growth beyond the K-12 public space, leveraging relationships with other community service sectors [78] Question: Can you elaborate on the lift in covered lives and cross-sold products? - Management confirmed strong momentum in sales and cross-selling opportunities, particularly in the employer-sponsored and worksite direct channels [85][86] Question: Why haven't planned auto rate increases changed despite peers' trends? - Management explained that their preferred driver base and proactive underwriting strategies differentiate them from peers [91][92] Question: What is the outlook for the Supplemental segment's benefit ratio? - Management anticipates a return to more normalized benefit ratios post-pandemic, with adjustments to guidance as necessary [128]

Portfolio composition(1) $6.6 billion fair value | --- | --- | --- | |-------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | • | | $5.4 billion fixed-maturity portfolio | | | • | 69% A-rated or higher | | | • | A+ weighted-average credit quality | | | • | <3% below-investment grade exposure (2) | | | • | 6.3 average duration | | | • | 4.12% Q1 c ...