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 1.0billionofrecordkeepingassetsunderadministrationasofDecember31,2024[93].EmployeeEngagementandBenefits−In2024,741,000 annually to employee health savings accounts and provides mental and physical health resources[52]. Financial Performance - The Property & Casualty segment generated 741.5millionindirectpremiumsfortheyearendedDecember31,2024,withatotalof345,593autorisksand166,991propertyrisksinforce[65][64].−Directpremiumsandcontractdepositsfortheemployer−sponsoredsegmenttotaled159.4 million, while the worksite direct segment totaled 121.8million[107][108].−Theaveragefaceamountofindividuallifeinsurancepoliciesissuedwasapproximately204,000, with life insurance in force rising to 21.1billionatyear−end2024[88].−TotalaccumulatedfixedandvariableannuitycashvalueondepositatDecember31,2024,was5.5 billion, net of reinsurance[89]. Catastrophe and Risk Management - Catastrophe losses for 2024 amounted to 94.9million,withsignificanteventsincludingHurricaneHelenecausing27.8 million in losses[68]. - The company maintains a catastrophe excess of loss reinsurance coverage with a retention of 35.0million,providing8925.0 million and 35.0millionfor2024[74].−Thecompanyisactivelymonitoringtrendsinclimate−relatedrisks,whichareexpectedtoimpactinsuranceclaimsandcostsduetomorefrequentandsevereweatherevents[147].−Thecompanyutilizespropertyandcasualtycatastrophemodelsandthird−partysoftwareforcashflowprojectionstosupportitsriskanalysisandcapitaladequacyevaluations[152].InvestmentStrategy−ThetotalinvestmentsasofDecember31,2024,amountto6,916.4 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].
Horace Mann(HMN)2025-02-28 00:11