Horace Mann(US:HMN)2025-11-07 17:57Financial Performance - Total revenues for Q3 2025 increased by 6.4% to $438.5 million compared to $412.1 million in Q3 2024[120] - Net income for Q3 2025 rose by 70.0% to $58.3 million, up from $34.3 million in Q3 2024[120] - Net premiums and contract charges earned increased by 7.3% to $310.3 million for Q3 2025, compared to $289.1 million in Q3 2024[121] - Total net investment income increased by 5.8% to $119.6 million for Q3 2025, up from $113.0 million in Q3 2024[121] - Benefits, claims, and settlement expenses decreased by 10.6% to $171.0 million in Q3 2025, compared to $191.3 million in Q3 2024[121] - Operating expenses increased by 16.2% to $96.3 million for Q3 2025, reflecting investments in growth and higher incentives[121] - Book value per share increased by 11.7% to $35.31 as of September 30, 2025, compared to $31.60 a year earlier[120] Property & Casualty Segment - For the three months ended September 30, 2025, net premiums written in the Property & Casualty segment increased by 9.3% to $232.1 million compared to $212.3 million in the same period of 2024[150] - The net income for the Property & Casualty segment for the three months ended September 30, 2025, was $31.8 million, reflecting a 200.0% increase from $10.6 million in the prior year[151] - The combined ratio for the Property & Casualty segment improved to 87.8% for the three months ended September 30, 2025, compared to 91.4% in the same period of 2024[151] - Catastrophe losses decreased by 70.9% for the three months ended September 30, 2025, amounting to $9.9 million compared to $34.0 million in the prior year[150] - Net investment income for the Property & Casualty segment increased by 68.2% to $14.8 million for the three months ended September 30, 2025, compared to $8.8 million in the same period of 2024[150] Life & Retirement Segment - Life & Retirement segment net premiums written and contract deposits increased by 9.4% to $170.4 million for the three months ended September 30, 2025[163] - Net income for the Life & Retirement segment rose by 14.2% to $16.9 million for the three months ended September 30, 2025, primarily due to favorable benefits in the Life segment[163] - Net annuity contract deposits for the Retirement business increased by 9.3% to $138.6 million for the quarter[164] - Life insurance in force increased to $21.4 billion at quarter-end, reflecting strong persistency[165] - The company has $5.9 billion in annuity assets under management, including $2.2 billion in fixed annuities[165] Supplemental & Group Benefits Segment - The Supplemental & Group Benefits segment represented 18% of total revenues in 2024, indicating its significance in the overall revenue structure[168] - Supplemental & Group Benefits revenues for Q3 2025 were $75.6 million, a 4.4% increase from $72.4 million in Q3 2024[172] - Net premiums earned for Q3 2025 were $66.4 million, up 5.9% from $62.7 million in Q3 2024, while net investment income increased by 9.9% to $11.1 million[172] - Total sales for the three months ended September 30, 2025, increased by $4.7 million, with Individual Supplemental product sales rising 40.5% and Group Benefits products increasing 90.9%[174] - The benefits ratio for Supplemental & Group Benefits decreased by 5.1 percentage points to 30.9% in Q3 2025 compared to 36.0% in Q3 2024[172] Investment and Capital Management - The company has outstanding commitments of $23.0 million related to the purchase of transferable tax credits as of September 30, 2025[135] - The company issued $300.0 million in Senior Notes at a 4.70% interest rate, with proceeds used to repay existing debt and for general corporate purposes[198] - The company maintained a diversified fixed maturity securities portfolio with 4,018 investment positions[186] - The total corporate bonds amounted to $1.84 billion in fair value, with unrealized losses of $149.2 million[184] - The company held $1.3 billion in cash and liquid securities as of September 30, 2025, which could be rapidly liquidated under normal market conditions[202] Shareholder Returns - Total dividends paid to shareholders for the nine months ended September 30, 2025, was $42.9 million, with quarterly dividends of $0.35 per share approved in March, May, and September 2025[209] - The company repurchased 343,301 shares of common stock for a total cost of $13.9 million at an average price of $40.70 per share during the nine months ended September 30, 2025[210] Risk Management - Significant interest rate changes expose the company to potential losses or reduced income levels, impacting the difference between earned interest rates on investments and credited interest rates on liabilities[222] - The company manages market value risk by aligning projected cash inflows of assets with projected cash outflows of liabilities, maintaining reasonable durations for assets and liabilities[223] - The company aims to maximize income while ensuring investment quality, liquidity, and diversification in its asset management strategy[223] Ratings and Regulatory - The insurance financial strength ratings for HMEC's subsidiaries are all rated 'A' (stable) by A.M. Best, Fitch, and Moody's, with the parent company rated 'bbb' by A.M. Best and 'BBB' by Fitch[219] - The ratings assigned by agencies can affect the company's access to capital and cost of capital, impacting its competitive position[218] - The financial ratings are subject to change, which could influence the company's market strategies and investment decisions[218]