Horace Mann Estimates Fourth Quarter Impact of Hurricanes, Lowers 2005 Earnings Estimate
14 December 2005 - 9:19AM
PR Newswire (US)
SPRINGFIELD, Ill., Dec. 13 /PRNewswire-FirstCall/ -- Horace Mann
Educators Corporation (NYSE:HMN) estimates its fourth quarter 2005
financial impact from Hurricanes Rita and Wilma will total
approximately $13 million to $16 million pretax, net of anticipated
reinsurance recoveries. The total impact of catastrophe losses and
loss adjustment expenses in the quarter is estimated to be
approximately $16 million to $21 million pretax. Hurricane Rita
occurred in late September. Reflecting additional information
regarding claims from Rita, and due primarily to a reestimation of
the average cost per claim, estimated gross losses have increased
to between $20 million and $22 million, compared to the company's
prior estimate of $10 million. Net of anticipated reinsurance,
current estimated losses and related expenses for Hurricane Rita
are approximately $11 million, compared to $10 million pretax
recorded in net income for the nine months ended September 30,
2005. The company's estimated gross losses from Hurricane Wilma,
which struck Florida in late October as a Category 3 hurricane, are
$12 million to $15 million. Reinsurance recoveries are not
available to offset this level of estimated losses from Wilma due
to the fact that a portion of the company's catastrophe reinsurance
coverage has been fully utilized for Hurricanes Katrina and Rita.
The company's estimated losses for Hurricane Katrina remain
unchanged. In addition to Hurricane Wilma and the additional losses
estimated for Hurricane Rita, the company estimates other fourth
quarter catastrophe costs to be approximately $3 million to $5
million pretax, including severe storms and tornadoes in the
Midwest and a $1.4 million assessment from the Louisiana Citizens
FAIR Plan related primarily to Hurricane Katrina. These catastrophe
amounts represent the estimated net losses both from claims
reported to the company and from future expected claims from
policyholders with hurricane damage. There can be no assurance that
the ultimate costs associated with this and other catastrophic
events will not exceed the company's current estimates. These
estimates will be refined as necessary, as additional information
becomes available. "Horace Mann's favorable non-catastrophe
property and casualty underwriting results in 2005 are continuing
into the fourth quarter," said Louis G. Lower II, President and
Chief Executive Officer. "However, as a result of the greater than
expected level of catastrophe losses to be recorded in the quarter,
we are reducing our estimated 2005 full year net income before
realized investment gains and losses to between $1.50 and $1.60 per
share, compared to our previous guidance of $1.70 to $1.80 per
share," Lower stated. "Catastrophe losses for 2005 are at an
all-time record for the industry and represent the second-highest
annual level experienced by Horace Mann. More importantly, however,
is the significant devastation experienced by the individuals and
families directly effected by these catastrophes," said Lower.
"Horace Mann customers can be assured that we are continuing to
make every effort to ensure timely and equitable claim
settlements." Horace Mann -- the largest national multiline
insurance company focusing on educators' financial needs --
provides auto and homeowners insurance, retirement annuities, life
insurance and other financial solutions. Founded by educators for
educators in 1945, the company is headquartered in Springfield,
Ill. For more information, visit http://www.horacemann.com/ .
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 Quarterly Report on Form 10-Q for the quarter ended
September 30, 2005 and the company's past and future filings and
reports filed with the Securities and Exchange Commission for
information concerning the important factors that could cause
actual results to differ materially from those in forward-looking
statements. DATASOURCE: Horace Mann Educators Corporation CONTACT:
Dwayne D. Hallman, Senior Vice President - Finance of Horace Mann
Educators Corporation, +1-217-788-5708 Web site:
http://www.horacemann.com/
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