- Net income per share rose 111.4% to $0.93, with core earnings
up 41.0% to $1.10
- Unwavering commitment to education market and multi-year
emphasis on products, distribution and infrastructure setting stage
for success in post-vaccine environment
- Property and Casualty, Supplemental segment results continued
to reflect pandemic-related changes in policyholder behavior;
catastrophe losses added 7.0 points to 86.2% Property and Casualty
combined ratio
- Net investment income rose 16% on strong returns from
alternatives portfolio, contributing to 4.8% increase in total
revenues
- Book value per share up 14.1% and book value excluding net
unrealized gains up 7.6% from a year ago
- Reaffirming 2021 core EPS guidance of $3.00 to $3.20, with ROE
in the range of 9% to 9.5%
- Guidance maintains progress toward long-term objective of
sustainable double-digit ROE
- Expect Auto and Supplemental loss ratios to gradually move
closer to historical levels over the course of 2021 as
pandemic-impacted policyholder behaviors evolve
- Growing contribution of alternatives portfolio boosting net
investment income, particularly for Retirement and Life
segments
- No change to expectation of 9 to 9.5 points of catastrophe
losses on full-year Property and Casualty combined ratio; second
quarter historically has represented half of full-year catastrophes
losses
Horace Mann Educators Corporation (NYSE:HMN) today
reported financial results for the three months ended March 31,
2021:
Horace Mann Consolidated
Financial Highlights
Three Months Ended
March 31,
($ in millions, except per share
amounts)
2021
2020
% Change
Total revenues
$
322.0
$
307.3
4.8
%
Net income
39.3
18.5
112.4
%
Net investment losses after tax
(7.1
)
(14.5
)
N.M.
Core earnings*
46.4
33.0
40.6
%
Per diluted share:
Net income
0.93
0.44
111.4
%
Net investment losses after tax
(0.17
)
(0.34
)
N.M.
Core earnings per diluted share*
1.10
0.78
41.0
%
Book value per share
40.83
35.80
14.1
%
Book value per share excluding net
unrealized
investment gains on fixed maturity
securities*
34.95
32.49
7.6
%
N.M. - Not meaningful.
* These measures are not based on
accounting principles generally accepted in the United States of
America (non-GAAP). They are reconciled to the most directly
comparable GAAP measures in the Appendix to the Investor
Supplement. An explanation of these measures is contained in the
Glossary of Selected Terms included as an exhibit in the Company’s
reports filed with the Securities and Exchange Commission.
“Our strong first quarter results are a solid start to 2021 and
reflect the value that Horace Mann continues to provide to the
education market,” said Horace Mann President and CEO Marita
Zuraitis. “Since the beginning of the COVID-19 pandemic, educators
have worked tirelessly to reach their students — working longer
hours in multiple classroom environments, while still dealing with
the impact of the pandemic on their personal lives. Horace Mann is
a company built on a dedication to educators, and this past year
has only deepened our commitment to helping educators achieve the
lifelong financial success that they deserve.
“The adjustments that we made at Horace Mann over the past year
to adapt to a fully virtual model — online financial workshops,
ease of doing business enhancements, and virtual engagement events
— will only strengthen our market position as we enter the ‘more
normal’ 2021-2022 school year,” Zuraitis continued. “We are also
ready to leverage the steps we have taken in distribution, most
notably the full integration of the Supplemental agency force. We
are seeing encouraging signs of sales momentum, particularly in
product areas such as retirement savings and traditional term and
whole life insurance, as the vaccine rolls out and schools
reopen.
“Increasing the share of educators who we help with financial
solutions is key to achieving a sustainable double-digit return on
equity,” commented Zuraitis. “But we also remain focused on
boosting investment income by deliberately increasing allocation to
higher-yielding alternative investments, as well as remaining
intently focused on optimizing expenses while increasing
efficiencies and synergies to ensure we are responsive to customer
needs.
“This strong start to 2021 is the first step toward achieving
our full-year core EPS guidance of $3.00 to $3.20,” Zuraitis added.
“Our outlook anticipates that Auto and Supplemental loss ratios
will move closer to historical levels over the course of 2021 as
policyholder behavior gradually evolves in a post-vaccine
environment. In addition, our guidance anticipates full-year 2021
Property and Casualty catastrophe losses adding 9 to 9.5 points to
the combined ratio. Although we did not see outsized catastrophe
losses in April, we historically experience about half of our
full-year catastrophe losses in the second quarter.
“Overall, we continue to expect solid progress this year from
strategic actions,” Zuraitis concluded. “Achieving our 2021 ROE
target of 9% to 9.5% will keep us on the path to a sustainable,
long-term double-digit ROE.”
Property and Casualty Segment First-Quarter Combined Ratio at
86.2%
(All comparisons vs. same period in 2020, unless noted
otherwise)
Our Property and Casualty insurance segment primarily markets
private passenger automobile insurance and residential home
insurance. We offer standard automobile coverages, including
liability, collision and comprehensive. Property coverage includes
both homeowners and renters policies. For both automobile and
property coverage, we offer educators a discounted rate and the
Educator Advantage® package of features. The Property and Casualty
segment represented 53% of 2020 total revenues and contributed
$76.5 million to 2020 core earnings.
Three Months Ended
March 31,
($ in millions)
2021
2020
Change
Property and Casualty premiums
written*
$
141.8
$
153.6
-7.7
%
Property and Casualty net income / core
earnings*
27.9
26.6
4.9
%
Property and Casualty combined ratio
86.2
%
88.6
%
-2.4
pts
Property and Casualty underlying loss
ratio*
53.8
%
58.0
%
-4.2
pts
Property and Casualty expense ratio
25.4
%
25.9
%
-0.5
pts
Property and Casualty catastrophe
losses
7.0
%
5.3
%
1.7
pts
Property and Casualty underlying combined
ratio*
79.2
%
83.9
%
-4.7
pts
Auto combined ratio
84.2
%
91.7
%
-7.5
pts
Auto underlying loss ratio*
58.8
%
66.5
%
-7.7
pts
Property combined ratio
90.1
%
82.7
%
7.4
pts
Property underlying loss ratio*
44.0
%
40.7
%
3.3
pts
Property and Casualty premiums written declined due to continued
lower new business. Auto average premiums were down slightly,
driven partly by changes in miles driven, while property average
premiums rose slightly. The auto policy retention rate of 81.9%
improved modestly in the first quarter while the property retention
rate of 87.3% remained in line with recent experience.
Overall, segment core earnings for the quarter rose 4.9%,
largely due to the 2.4 point improvement in the combined ratio,
despite a 1.7 point increase in the catastrophe loss ratio, offset
by higher income tax expense. In the first quarter of 2020, the
company’s tax expense was reduced by a one-time tax benefit of $2.8
million as a result of the CARES Act.
The underlying combined ratio improved by 4.7 points over last
year’s first quarter, largely due to the low underlying auto loss
ratio. The underlying auto loss ratio improved 7.7 points,
reflecting loss costs that continue to reflect changing driving
patterns due to COVID-19, as well as the ongoing benefit of
profitability initiatives. The underlying property loss ratio rose
3.3 points, primarily because of higher non-catastrophe weather
losses and non-weather water losses.
In the first quarter, the company incurred $11.0 million of
catastrophe losses from 13 events that added 7.0 points to the
combined ratio. The company’s full-year 2021 guidance continues to
reflect a catastrophe loss assumption of approximately 9 to 9.5
points on the combined ratio, as second-quarter events historically
have represented approximately 50% of the total catastrophe losses
for the year.
Supplemental Segment Contributed $11.4 million to
First-Quarter Earnings
(All comparisons vs. same period in 2020, unless noted
otherwise)
Our Supplemental insurance segment specializes in marketing
supplemental insurance products, including cancer, heart, hospital,
supplemental disability and accident for the education market. The
segment represented 12% of 2020 total revenues and contributed
$43.1 million to 2020 core earnings.
Three Months Ended
March 31,
($ in millions)
2021
2020
Change
Sales*
$
1.0
$
3.7
-73.0
%
Premiums earned
31.7
33.0
-3.9
%
Supplemental net income / core
earnings*
11.4
10.5
8.6
%
Pretax profit margin (1)
38.7
%
36.0
%
7.5
%
(1)
Measured to total revenues.
Supplemental segment sales were $1.0 million in the first
quarter, continuing to reflect limited school access because of the
COVID-19 pandemic. Sales are expected to increase as school
reopenings extend to more areas. Persistency was up slightly at
91.5%.
Strong core earnings reflected higher net investment income as
well as favorable business trends including some continued
short-term benefit from changes in policyholder behavior due to
COVID-19. Segment expenses include the non-cash impact of
amortization of intangible assets under purchase accounting that
reduced core earnings by $2.9 million pretax. The pretax profit
margin remains above management’s longer-term expectations because
of the pandemic-related changes in policyholder behavior.
Retirement Segment Benefits from Improving Net Investment
Spread
(All comparisons vs. same period in 2020, unless noted
otherwise)
Our Retirement segment primarily markets 403(b) tax-qualified
fixed, fixed index and variable annuities; the Horace Mann
Retirement Advantage® open architecture platform for 403(b)(7) and
other defined contribution plans; and other retirement products to
educators. Horace Mann is one of the largest participants in the
K-12 educator portion of the 403(b) tax-qualified annuity market,
measured by 403(b) net written premium on a statutory accounting
basis. The Retirement segment represented 21% of 2020 total
revenues and contributed $28.2 million to 2020 core earnings.
Three Months Ended
March 31,
($ in millions)
2021
2020
Change
Annuity contract deposits, net*
$
105.8
$
105.8
—
%
Annuity assets under management (1)
4,991.7
4,026.6
24.0
%
Total assets under administration (2)
8,926.1
7,381.3
20.9
%
Retirement net income (loss) / core
earnings*
10.6
(0.9)
N.M.
Retirement core earnings excluding DAC
unlocking*
10.0
2.3
334.8
%
N.M. - Not meaningful.
(1)
Amount reported as of March 31,
2021 excludes $782.8 of assets under management held under modified
coinsurance reinsurance.
(2)
Includes Annuity AUM, Brokerage
and Advisory AUA, and Recordkeeping AUA.
Annuity contract deposits were level with last year’s first
quarter. Horace Mann’s relationships with educators often begins
with our 403(b) retirement savings products, including our
competitively priced annuity products, and we are encouraged by the
cross-sell opportunities they provide. Total cash value persistency
remained strong at 95.1% for variable annuities and 95.0% for fixed
annuities.
Horace Mann currently has $5.0 billion in annuity assets under
management, including $2.2 billion of fixed annuities, $2.3 billion
of variable annuities and $0.5 billion of fixed indexed annuities.
Assets under administration, which includes Retirement Advantage
and other advisory and recordkeeping assets, was up 20.9% from a
year ago, as assets under management rose largely due to strong
stock market performance over the past 12 months.
The net interest spread was 253 points in the first quarter,
reflecting strong investment returns particularly in limited
partnership investments. Core earnings excluding DAC unlocking were
up four-fold primarily due to the strong net interest margin. In
last year’s first quarter, DAC unlocking was negative because of
equity market volatility.
Life Segment First-Quarter Core Earnings Flat with Last
Year
(All comparisons vs. same period in 2020, unless noted
otherwise)
Our Life insurance segment primarily markets traditional term
and whole life insurance products to educators. The Life segment
represented 14% of 2020 total revenues and contributed $10.4
million to 2020 core earnings.
Three Months Ended
March 31,
($ in millions)
2021
2020
Change
Total sales*
$
3.0
$
3.3
-9.1
%
Annualized sales*
2.0
2.0
—
%
Life mortality costs
14.6
10.1
44.6
%
Life net income / core earnings*
0.7
0.6
16.7
%
First-quarter annualized Life sales were unchanged from last
year on steady new sales of recurring term and whole life policies,
and lower new sales of Indexed Universal Life policies. Life core
earnings* reflected first-quarter mortality costs above
expectations offset by higher net investment income. Full-year
persistency for life products of 96.1% improved from the prior year
period.
Investment Portfolio Sees Strong First Quarter due to
Alternatives Portfolio
(All comparisons vs. same period in 2020, unless noted
otherwise)
Our investment strategy is primarily focused on generating
income to support product liabilities, and balances principal
protection and risk. Total net investment income includes net
investment income on the investment portfolio managed by Horace
Mann, as well as accreted investment income on the deposit asset on
reinsurance related to the company’s reinsurance of policy
liabilities related to legacy individual annuities written in 2002
or earlier.
Three Months Ended
March 31,
($ in millions)
2021
2020
Change
Pretax net investment income - investment
portfolio
$
71.1
$
58.6
21.3
%
Pretax investment income - deposit asset
on reinsurance
24.4
23.7
3.0
%
Total pretax net investment income
95.5
82.3
16.0
%
Pretax net investment losses
(9.0)
(18.5)
N.M.
Pretax net unrealized investment gains on
fixed maturity securities
363.6
189.7
91.7
%
Investment yield, excluding limited
partnership interests, pretax - annualized
4.20
%
4.51
%
-0.31
pts
N.M. - Not meaningful.
Total net investment income was up 16.0%. Net investment income
on the managed portfolio rose 21.3%, reflecting the favorable
alternatives portfolio returns in this year’s first quarter
compared with negative mark-to-market adjustments on limited
partnership investments in the first quarter of 2020. This quarter,
favorable returns on limited partnership investments offset
slightly lower yields on fixed maturity investments in the core
portfolio.
Pretax net investment losses were $9.0 million, including $3.2
million in total impairments on investments. The company’s fixed
maturity securities portfolio is in a net unrealized investment
gain position of $363.6 million at March 31, 2021.
Book Value Excluding Net Unrealized Investment Gains Up 8%
Year Over Year
At March 31, 2021, shareholders’ equity was $1.69 billion, or
$40.83 per share. Excluding net unrealized investment gains on
fixed maturity securities, shareholders’ equity was $1.45 billion,
or $34.95 per share.* At March 31, 2021, total debt was $437.4
million, with $135.0 million outstanding on the company’s line of
credit. The ratio of debt-to-capital excluding net unrealized
investment gains* was 23.2%.
During the first quarter, Horace Mann repurchased 39,485 shares
of common stock at an average price of $38.44. As of March 31,
2021, $19.1 million remained authorized for future share
repurchases under the share repurchase program.
Quarterly Webcast
Horace Mann’s senior management will discuss the company’s
first-quarter financial results with investors on May 5, 2021 at
9:00 a.m. Eastern Time. The conference call will be webcast live at
investors.horacemann.com and archived later in the day for
replay.
About Horace Mann
Horace Mann Educators Corporation (NYSE: HMN) is the largest
financial services company focused on providing America’s educators
and school employees with insurance and retirement solutions.
Founded by Educators for Educators® in 1945, the company is
headquartered in Springfield, Illinois. For more information, visit
horacemann.com.
Safe Harbor Statement and Non-GAAP Measures
Statements included in this news release that are not historical
in nature are forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995 and are subject to certain
risks and uncertainties. Horace Mann is not under any obligation to
(and expressly disclaims any such obligation to) update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise. Please refer to the
company’s Annual Report on Form 10-K for the year ended December
31, 2020 and the company’s past and future filings and reports
filed with the Securities and Exchange Commission (SEC) for
information concerning important factors that could cause actual
results to differ materially from those in forward-looking
statements. Information contained in this news release include
measures which are based on methodologies other than accounting
principles generally accepted in the United States of America
(GAAP). Reconciliations of non-GAAP measures to the closest GAAP
measures are contained in the Appendix to the Investor Supplement
and additional descriptions of the non-GAAP measures are contained
in the Glossary of Selected Terms included as an exhibit to the
company’s SEC filings.
HORACE MANN EDUCATORS
CORPORATION
Financial Highlights
(Unaudited)
($ in Millions, except per share
data)
Three Months Ended
March 31,
2021
2020
% Change
EARNINGS
SUMMARY
Net income
$
39.3
$
18.5
112.4
%
Net investment losses, after tax
(7.1
)
(14.5
)
N.M.
Core earnings*
46.4
33.0
40.6
%
Per diluted share:
Net income
$
0.93
$
0.44
111.4
%
Net investment losses, after tax
$
(0.17
)
$
(0.34
)
N.M.
Core earnings*
$
1.10
$
0.78
41.0
%
Weighted average number of shares and
equivalent shares (in millions) -
Diluted
42.1
42.0
0.2
%
RETURN ON
EQUITY
Net income return on equity - LTM (1)
9.3
%
11.3
%
Net income return on equity -
annualized
9.0
%
4.9
%
Core return on equity - LTM* (2)
11.2
%
7.6
%
Core return on equity - annualized*
12.9
%
9.9
%
FINANCIAL
POSITION
Per share: (3)
Book value
$
40.83
$
35.80
14.1
%
Effect of net unrealized investment gains
on fixed maturity securities (4)
$
5.88
$
3.31
77.6
%
Dividends paid
$
0.31
$
0.30
3.3
%
Ending number of shares outstanding (in
millions) (3)
41.5
41.3
0.5
%
Total assets
$
13,745.5
$
11,972.2
14.8
%
Short-term debt
135.0
135.0
—
%
Long-term debt
302.4
298.1
1.4
%
Total shareholders’ equity
1,692.9
1,477.6
14.6
%
ADDITIONAL
INFORMATION
Net investment losses
Before tax
$
(9.0
)
$
(18.5
)
N.M.
After tax
(7.1
)
(14.5
)
N.M.
Per share, diluted
$
(0.17
)
$
(0.34
)
N.M.
N.M. - Not meaningful.
(1)
Based on last twelve months net
income and average quarter-end shareholders’ equity.
(2)
Based on last twelve months core
earnings and average quarter-end shareholders’ equity which has
been adjusted to exclude the fair value adjustment for investments,
net of the related impact on deferred policy acquisition costs and
applicable deferred taxes.
(3)
Ending shares outstanding were
41,466,646 at March 31, 2021 and 41,277,498 at March 31, 2020.
(4)
Net of the related impact on
deferred policy acquisition costs and applicable deferred
taxes.
HORACE MANN EDUCATORS
CORPORATION
Statements of Operations and
Consolidated Data (Unaudited)
($ in Millions)
Three Months Ended
March 31,
2021
2020
% Change
STATEMENTS OF
OPERATIONS
Premiums and contract charges earned
$
227.6
$
236.3
-3.7
%
Net investment income
95.5
82.3
16.0
%
Net investment losses
(9.0)
(18.5)
N.M.
Other income
7.9
7.2
9.7
%
Total revenues
322.0
307.3
4.8
%
Benefits, claims and settlement
expenses
134.3
138.7
-3.2
%
Interest credited
50.6
51.5
-1.7
%
Operating expenses
58.0
60.7
-4.4
%
DAC unlocking and amortization expense
24.1
30.0
-19.7
%
Intangible asset amortization expense
3.3
3.7
-10.8
%
Interest expense
3.5
4.2
-16.7
%
Total benefits, losses and expenses
273.8
288.8
-5.2
%
Income before income taxes
48.2
18.5
160.5
%
Income tax expense
8.9
—
N.M.
Net income
$
39.3
$
18.5
112.4
%
PREMIUMS WRITTEN
AND CONTRACT DEPOSITS*
Property and Casualty
$
141.8
$
153.6
-7.7
%
Supplemental
31.6
32.6
-3.1
%
Annuity contract deposits, net
105.8
105.8
—
%
Life
25.2
24.8
1.6
%
Total
$
304.4
$
316.8
-3.9
%
SEGMENT NET
INCOME (LOSS)
Property and Casualty
$
27.9
$
26.6
4.9
%
Supplemental
11.4
10.5
8.6
%
Retirement
10.6
(0.9)
N.M.
Life
0.7
0.6
16.7
%
Corporate and Other (1)
(11.3)
(18.3)
38.3
%
Net income
$
39.3
$
18.5
112.4
%
N.M. - Not meaningful.
(1)
Corporate and Other includes interest
expense on debt and the impact of net investment gains and losses
and other Corporate level items. The Company does not allocate the
impact of corporate level transactions to the insurance segments
consistent with how management evaluates the results of those
segments. See detail for this segment on page 12.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in Millions)
Three Months Ended
March 31,
2021
2020
Change
PROPERTY and
CASUALTY
Premiums written*
$
141.8
$
153.6
-7.7
%
Premiums earned
155.8
166.5
-6.4
%
Net investment income
10.8
10.3
4.9
%
Other income
2.1
0.8
162.5
%
Losses and loss adjustment expenses
(LAE)
94.7
104.4
-9.3
%
Operating expenses (includes amortization
expense)
39.5
43.2
-8.6
%
Interest expense
0.1
0.2
-50.0
%
Income before income taxes
34.4
29.8
15.4
%
Net income / core earnings*
27.9
26.6
4.9
%
Net investment income, after tax
9.0
8.7
3.4
%
Catastrophe losses
After tax
8.7
7.0
24.3
%
Before tax
11.0
8.8
25.0
%
Prior years’ reserves favorable
development, before tax
Automobile
—
1.0
-100.0
%
Property and other
—
—
N.M.
Total
—
1.0
-100.0
%
Operating statistics:
Loss and loss adjustment expense ratio
60.8
%
62.7
%
-1.9
pts
Expense ratio
25.4
%
25.9
%
-0.5
pts
Combined ratio
86.2
%
88.6
%
-2.4
pts
Effect on the combined ratio of:
Catastrophe losses
7.0
%
5.3
%
1.7
pts
Prior years’ favorable reserve
development
—
%
-0.6
%
0.6
pts
Combined ratio excluding the effects
of
catastrophe losses and prior years’
reserve
development (underlying combined
ratio)*
79.2
%
83.9
%
-4.7
pts
Risks in force (in thousands)
575
616
-6.7
%
Automobile (1)
393
424
-7.3
%
Property
182
192
-5.2
%
Policy renewal rate - 12 months
Automobile
81.9
%
81.3
%
0.6
pts
Property
87.3
%
87.1
%
0.2
pts
N.M. - Not meaningful.
(1)
Includes assumed risks in force of 4.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in Millions)
Three Months Ended
March 31,
2021
2020
Change
SUPPLEMENTAL
Premiums and contract charges earned
$
31.7
$
33.0
-3.9
%
Net investment income
5.3
3.5
51.4
%
Other income
0.7
0.7
—
%
Benefits
9.6
10.7
-10.3
%
Change in reserves
0.1
(0.2)
150.0
%
Interest credited
0.1
—
N.M.
Operating expenses (includes DAC unlocking
and amortization expense)
10.4
10.1
3.0
%
Intangible asset amortization expense
2.9
3.2
-9.4
%
Income before income taxes
14.6
13.4
9.0
%
Net income / core earnings*
11.4
10.5
8.6
%
Benefits ratio (1)
30.6
%
31.8
%
-1.2
pts
Operating expense ratio (2)
27.6
%
27.1
%
0.5
pts
Pretax profit margin (3)
38.7
%
36.0
%
2.7
pts
Premium persistency (rolling 12
months)
91.5
%
89.2
%
2.3
pts
N.M. - Not meaningful.
(1)
Ratio of benefits plus change in
reserves to earned premium.
(2)
Ratio of operating expenses to
total revenues.
(3)
Ratio of income before taxes to
total revenues.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in Millions)
Three Months Ended
March 31,
2021
2020
Change
RETIREMENT
Annuity contract deposits, net*
$
105.8
$
105.8
—
%
Variable
61.6
57.8
6.6
%
Fixed
44.2
48.0
-7.9
%
Contract charges earned
8.6
7.4
16.2
%
Net investment income
36.0
29.8
20.8
%
Interest credited
13.8
15.7
-12.1
%
Net interest margin
22.2
14.1
57.4
%
Investment income - deposit asset on
reinsurance
24.4
23.7
3.0
%
Interest credited - Reinsured block
25.5
24.6
3.7
%
Net interest margin - Reinsured block
(1.1)
(0.9)
-22.2
%
Other income
4.7
5.3
-11.3
%
Mortality loss and other reserve
changes
(1.1)
(1.6)
31.3
%
Operating expenses (includes DAC unlocking
and amortization expense)
20.3
24.9
-18.5
%
Intangible asset amortization expense
0.4
0.5
-20.0
%
Income (loss) before income taxes
12.6
(1.1)
N.M.
Net income (loss) / core earnings
10.6
(0.9)
N.M.
Pretax income increase (decrease) due to
evaluation of:
Deferred policy acquisition costs
$
0.8
$
(4.0)
N.M.
Guaranteed minimum death benefit
reserve
—
(0.3)
N.M.
Retirement contracts in force (in
thousands)
230
229
0.4
%
Annuity accumulated account value on
deposit /
Assets under management
$
4,991.7
$
4,026.6
24.0
%
Variable (1)
2,270.1
1,414.6
60.5
%
Fixed
2,721.6
2,612.0
4.2
%
Annuity accumulated value retention - 12
months
Variable accumulations
95.1
%
94.5
%
0.6
pts
Fixed accumulations
95.0
%
94.0
%
1.0
pts
LIFE
Premiums written and contract
deposits*
$
25.2
$
24.8
1.6
%
Premiums and contract charges earned
31.5
29.4
7.1
%
Net investment income
19.6
15.6
25.6
%
Other income
0.1
—
N.M.
Death benefits/mortality cost/change in
reserves
28.8
22.2
29.7
%
Interest credited
11.2
11.2
—
%
Operating expenses (includes DAC unlocking
and amortization expense)
10.3
10.9
-5.5
%
Income before income taxes
0.9
0.7
28.6
%
Net income / core earnings*
0.7
0.6
16.7
%
Pretax income increase (decrease) due to
evaluation of:
Deferred policy acquisition costs
$
(0.1)
$
0.1
N.M.
Life policies in force (in thousands)
201
201
—
%
Life insurance in force
$
19,936
$
19,295
3.3
%
Lapse ratio - 12 months (Ordinary life
insurance)
3.9
%
4.7
%
-0.8
pts
N.M. - Not meaningful.
(1)
Amount reported as of March 31,
2021 excludes $782.8 of assets under management held under modified
coinsurance reinsurance.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in Millions)
Three Months Ended
March 31,
2021
2020
% Change
CORPORATE AND
OTHER (1)
Components of loss before tax:
Net investment losses
$
(9.0)
$
(18.5)
N.M.
Interest expense
(3.4)
(4.0)
15.0
%
Other operating expenses, net investment
income and other income
(1.9)
(1.8)
-5.6
%
Loss before income taxes
(14.3)
(24.3)
41.2
%
Net loss
(11.3)
(18.3)
38.3
%
INVESTMENTS
Retirement and Life
Fixed maturity securities, at fair
value
(amortized cost, net 2021, $4,635.8; 2020,
$4,284.1)
$
4,920.8
$
4,444.2
10.7
%
Equity securities, at fair value
91.5
70.0
30.7
%
Short-term investments
87.0
69.4
25.4
%
Policy loans
146.8
152.0
-3.4
%
Limited partnership interests
330.1
254.5
29.7
%
Other investments
58.4
26.6
119.5
%
Total Retirement and Life investments
5,634.6
5,016.7
12.3
%
Property and Casualty
Fixed maturity securities, at fair
value
(amortized cost, net 2021, $787.6; 2020,
$853.9)
846.4
881.1
-3.9
%
Equity securities, at fair value
41.4
15.8
162.0
%
Short-term investments
3.6
3.7
-2.7
%
Limited partnership interests
138.0
115.6
19.4
%
Other investments
1.1
1.0
10.0
%
Total Property and Casualty
investments
1,030.5
1,017.2
1.3
%
Supplemental
Fixed maturity securities, at fair
value
(amortized cost, net 2021, $569.4; 2020,
$515.4)
589.1
517.9
13.7
%
Equity securities, at fair value
6.1
1.2
N.M.
Short-term investments
9.0
23.4
-61.5
%
Policy loans
0.8
0.8
—
%
Limited partnership interests
37.1
19.2
93.2
%
Other investments
2.7
1.1
145.5
%
Total Supplemental investments
644.8
563.6
14.4
%
Corporate and Other
Equity securities, at fair value
1.0
—
N.M.
Short-term investments
2.2
3.7
-40.5
%
Total Corporate and Other investments
3.2
3.7
-13.5
%
Total investments
$
7,313.1
$
6,601.2
10.8
%
Net investment income - investment
portfolio
Before tax
$
71.1
$
58.6
21.3
%
After tax
56.6
46.8
20.9
%
Investment income - deposit asset on
reinsurance
Before tax
$
24.4
23.7
3.0
%
After tax
19.3
18.7
3.2
%
N.M. - Not meaningful.
(1)
The Corporate and Other segment
includes interest expense on debt and the impact of investment
gains and losses and other corporate level items. The Company does
not allocate the impact of corporate level transactions to the
insurance segments consistent with how management evaluates the
results of those segments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210504006238/en/
Heather J. Wietzel, Vice President, Investor Relations
217-788-5144 | investorrelations@horacemann.com
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