SPRINGFIELD, Ill., July 30 /PRNewswire-FirstCall/ -- Horace Mann
Educators Corporation (NYSE:HMN) today reported net income of $18.6
million (46 cents per share) and $32.0 million (79 cents per share)
for the three and six months ended June 30, 2009, respectively,
compared to $4.5 million (11 cents per share) and $18.8 million (45
cents per share) for the same periods in 2008. Included in net
income were net realized gains on securities of $11.0 million ($7.2
million after tax, or 18 cents per share) and $10.2 million ($6.6
million after tax, or 16 cents per share) for the three and six
months ended June 30, 2009, respectively. In the same periods in
2008, net income included net realized investment losses of $8.1
million ($5.1 million after tax, or 12 cents per share) and $10.5
million ($6.7 million after tax, or 16 cents per share),
respectively. All per-share amounts are stated on a diluted basis.
"As the financial markets have begun to stabilize and improve, our
confidence in the quality of our investment portfolio has been
substantiated. Spread narrowing in the credit markets has
significantly improved our unrealized loss position, with reported
book value per share increasing 26 percent sequentially to $14.34.
Meanwhile, book value per share excluding FAS 115 is now slightly
higher than a year ago - just prior to the meltdown of the
financial markets. Key balance sheet ratios, including risk based
capital, remain consistent with our ratings, which have now been
reaffirmed by all three primary rating agencies," said Louis G.
Lower, President and Chief Executive Officer. "That financial
stability, combined with Horace Mann's established position in our
educator niche market, contributed to another very strong quarter
in annuity sales, which increased 50 percent compared to a year
ago. While the recession's impact on new car sales continued to
pressure applications for true new auto units, we're beginning to
close the gap to prior year and would expect continued improvement,
as our growth in total points of distribution and recent growth in
agent count build on the momentum we've established to transform
our distribution system to a new, more powerful model. Finally,
while catastrophes and non-catastrophe weather impacted our
property results, the underlying profitability in all of our
segments remained solid and generally consistent with
expectations." "Net income before realized investment gains and
losses was 28 cents per share for the second quarter," continued
Lower. "For the current accident year and excluding catastrophes,
our property and casualty combined ratio of approximately 94
percent in the quarter was about 2 percentage points higher than
the prior year period, largely reflecting the increase in
non-catastrophe weather-related losses. In addition, combined
annuity and life segment pretax earnings increased approximately 10
percent in the second quarter, compared to prior year, due to the
positive impact of market performance on the valuations of deferred
policy acquisition costs and the guaranteed minimum death benefit
reserve." Segment Earnings The property and casualty segment
recorded net income of $3.6 million for the quarter, an increase of
$1.7 million compared to the same period in 2008. Pretax
catastrophe costs in the current quarter were $15.1 million
compared to $22.4 million incurred in the second quarter of 2008.
The second quarter 2009 property and casualty combined ratio was
103.8 percent, including 11.1 percentage points due to catastrophe
costs, compared to 106.7 percent, including 16.6 percentage points
due to catastrophe costs, in the prior year period. Favorable prior
years' reserve development totaling $2.1 million was recorded in
the second quarter, which represented 1.5 percentage points on the
combined ratio, compared to $2.4 million, or 1.8 percentage points
on the combined ratio, recorded in the second quarter of 2008.
Annuity segment net income was $6.3 million for the three months
ended June 30, 2009, reflecting an increase of $1.2 million
compared to the same period in 2008. In the second quarter, the
positive market performance had a favorable impact on both the
valuation of annuity deferred policy acquisition costs and the
level of guaranteed minimum death benefit reserves. In contrast,
however, financial market performance over the past 12 months
adversely affected the level of charges and fees earned on variable
contract deposits in the quarter compared to prior year, which
offset the higher interest margin earned on fixed annuity assets in
the current period. Total annuity net fund flows continued to be
positive in the quarter, as they were throughout 2008, and total
cash value persistency of nearly 94 percent increased about 2
percentage points compared to a year earlier." Life segment net
income of $5.0 million for the second quarter decreased $0.2
million compared to the same period in 2008, as an increase in
mortality costs offset the growth in investment income. Life
persistency remained in excess of 94 percent. Segment Revenues The
company's total premiums written and contract deposits increased 8
percent and 3 percent compared to the three and six months ended
June 30, 2008, respectively, primarily reflecting increases in
annuity deposit receipts in the current periods. Total property and
casualty premiums written increased 2 percent compared to both the
three and six months ended June 30, 2008, primarily reflecting
increases in average property and auto premiums per policy. Annuity
new contract deposits received increased 22 percent and 8 percent
compared to the three and six months ended June 30, 2008,
respectively. Life segment insurance premiums and contract deposits
decreased 2 percent compared to the prior year three and six
months. Sales and Distribution For both the three and six months
ended June 30, 2009, total new auto sales units were 5 percent
lower in the current periods than in the prior year. "In spite of
the adverse prior year comparisons in total units, average agent
true new auto productivity increased in the current periods," said
Lower. Flexible premium annuity sales increased 32 percent in the
quarter and 68 percent for the six months compared to the
respective prior year periods. Coupled with year-to-date growth of
44 percent in single premium rollover deposits, including both
Horace Mann and partner company products, total annuity sales
increased 50 percent compared to the first six months of 2008.
"Horace Mann has approved annuity payroll reduction capabilities in
approximately one-third of the 15,500 public school districts in
the United States. This access will continue to benefit the
Company's marketing opportunities," said Lower. While the 684
Horace Mann agents at June 30, 2009 reflected a 5 percent decrease
compared to a year earlier, the number of agents increased again in
the current quarter, resulting in a 2 percent increase in agent
count since year-end 2008. Including 474 licensed producers who
work for the agents, Horace Mann's total points of distribution
increased to 1,158, a growth of 11 percent over a year earlier. "We
are encouraged by the increase in the number of agents in the first
half of the year. Based on current trends, we anticipate showing
year-over-year agent growth by the end of next quarter. That
expectation, coupled with the positive impact that our new Agency
Business Model is having on productivity and the recent
enhancements made to our field sales management structure, bodes
well for Horace Mann's future growth prospects," said Lower.
Investment Gains and Losses In the second quarter of 2009, pretax
net realized investment gains were $11.0 million, which included
$3.8 million of credit-related impairment write-downs, primarily
associated with a single collateralized debt obligation security,
and $4.1 million of realized impairment losses on securities that
were disposed of during the quarter, primarily financial
institution and telecommunications sector securities. The
impairment amounts were largely offset by $6.1 million of realized
gains on previously impaired securities that were disposed of
during the quarter, primarily financial sector securities. In
addition, the second quarter reflected approximately $13 million of
realized gains on other security sales. Horace Mann's net
unrealized investment losses on fixed maturity and equity
securities of $171.3 million at June 30, 2009 improved
significantly compared to the $359.6 million and $327.2 million
levels recorded at March 31, 2009 and December 31, 2008,
respectively. "Credit spreads improved across virtually all asset
classes in the second quarter, with our investment grade corporate
bond portfolio experiencing the most significant reduction in net
unrealized losses. Some of the more highly stressed asset classes
also showed improvement, including our financial institution bond
and preferred stock holdings and our CMBS portfolio," said Lower.
"In light of this widespread improvement in the credit markets,
coupled with our insignificant exposure to sub-prime, Alt-A and
other lower-quality structured securities, we remain very
comfortable with the underlying credit quality of our investment
portfolio and have a high level of confidence that any future
investment losses relating to the current economic environment will
be very manageable." 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 period ended March
31, 2009 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. HORACE
MANN EDUCATORS CORPORATION Digest of Earnings and Highlights
(Unaudited) (Dollars in Millions, Except Per Share Data) Quarter
Ended Six Months Ended June 30, June 30, 2009 2008 % Change 2009
2008 % Change DIGEST OF EARNINGS Net income $18.6 $4.5 313.3% $
32.0 $ 18.8 70.2% Net income per share: Basic $0.48 $0.11 336.4% $
0.82 $ 0.46 78.3% Diluted $0.46 $0.11 318.2% $ 0.79 $ 0.45 75.6%
Weighted average number of shares and equivalent shares (in
millions) (A): Basic 39.2 40.1 -2.2% 39.2 40.6 -3.4% Diluted 40.5
41.2 -1.7% 40.5 41.7 -2.9% HIGHLIGHTS Operations Insurance premiums
written and contract deposits $264.7 $245.0 8.0% $486.0 $469.6 3.5%
Return on equity (B) 4.8% 8.5% N.M. Property & Casualty GAAP
combined ratio 103.8% 106.7% N.M. 99.2% 100.2% N.M. Effect of
catastrophe costs on the Property & Casualty combined ratio
11.1% 16.6% N.M. 7.2% 10.4% N.M. Dedicated agents (C) 684 721 -5.1%
Licensed producers (D) 474 322 47.2% Total points of distribution
1,158 1,043 11.0% Additional Per Share Information Dividends paid
$0.0525 $0.105 -50.0% $0.105 $ 0.21 -50.0% Book value (E) $14.34
$15.13 -5.2% Financial Position Total assets $5,828.2 $6,053.0
-3.7% Short-term debt 38.0 - N.M. Long-term debt 199.6 199.5 0.1%
Total shareholders' equity 561.8 591.1 -5.0% N.M. - Not meaningful.
(A) During the three months ended March 31, 2008, the Company
repurchased 1,636,376 shares of its common stock at an aggregate
cost of $29.5 million, or an average cost of $18.01 per share.
During the three months ended June 30, 2008, the Company
repurchased 1,561,849 shares of its common stock at an aggregate
cost of $24.8 million, or an average cost of $15.93 per share. (B)
Based on trailing 12-month net income and average quarter-end
shareholders' equity. (C) Agents under contract with the Company to
market only the Company's products and limited additional
third-party vendor products authorized by the Company. (D) Includes
licensed producers working in dedicated agents' offices and
excludes independent agents. (E) Book value per share excluding the
fair value adjustment for investments was $16.86 at June 30, 2009
and $16.71 at June 30, 2008. Ending shares outstanding were
39,176,856 at June 30, 2009 and 39,061,788 at June 30, 2008. - 1 -
HORACE MANN EDUCATORS CORPORATION Statements of Operations and
Supplemental GAAP Consolidated Data (Unaudited) (Dollars in
Millions) Quarter Ended Six Months Ended June 30, June 30, 2009
2008 % Change 2009 2008 % Change STATEMENTS OF OPERATIONS Insurance
premiums and contract charges earned $163.5 $163.8 -0.2% $326.0
$326.3 -0.1% Net investment income 61.0 57.8 5.5% 118.9 114.4 3.9%
Net realized investment gains (losses) 11.0 (8.1) N.M. 10.2 (10.5)
N.M. Other income 1.9 2.7 -29.6% 4.8 5.3 -9.4% Total revenues 237.4
216.2 9.8% 459.9 435.5 5.6% Benefits, claims and settlement
expenses 118.2 122.1 -3.2% 226.0 229.0 -1.3% Interest credited 34.5
32.6 5.8% 68.2 64.7 5.4% Policy acquisition expenses amortized 19.1
18.8 1.6% 42.1 39.8 5.8% Operating expenses 35.0 33.3 5.1% 70.7
68.1 3.8% Amortization of intangible assets - 1.6 -100.0% 0.2 2.8
-92.9% Interest expense 3.5 3.4 2.9% 7.0 6.8 2.9% Total benefits,
losses and expenses 210.3 211.8 -0.7% 414.2 411.2 0.7% Income
before income taxes 27.1 4.4 515.9% 45.7 24.3 88.1% Income tax
expense (benefit) 8.5 (0.1) N.M. 13.7 5.5 149.1% Net income $18.6
$4.5 313.3% $ 32.0 $ 18.8 70.2% ANALYSIS OF PREMIUMS WRITTEN AND
CONTRACT DEPOSITS Property & Casualty Automobile and property
(voluntary) $139.7 $137.7 1.5% $267.9 $264.3 1.4% Involuntary and
other property & casualty 1.0 0.8 25.0% 1.9 1.0 90.0% Total
Property & Casualty 140.7 138.5 1.6% 269.8 265.3 1.7% Annuity
deposits 98.9 80.8 22.4% 167.6 154.7 8.3% Life 25.1 25.7 -2.3% 48.6
49.6 -2.0% Total $264.7 $245.0 8.0% $486.0 $469.6 3.5% ANALYSIS OF
SEGMENT NET INCOME (LOSS) Property & Casualty $3.6 $1.9 89.5% $
16.0 $ 14.9 7.4% Annuity 6.3 5.1 23.5% 7.5 8.1 -7.4% Life 5.0 5.2
-3.8% 8.4 7.8 7.7% Corporate and other (A) 3.7 (7.7) N.M. 0.1
(12.0) N.M. Net income 18.6 4.5 313.3% 32.0 18.8 70.2% Catastrophe
costs, after tax, included above (B) (9.8) (14.5) -32.4% (12.7)
(18.0) -29.4% N.M. - Not meaningful. (A) The Corporate and Other
segment includes interest expense on debt and the impact of
realized 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 4. (B) Includes allocated loss adjustment
expenses and catastrophe reinsurance reinstatement premiums. See
also page 3. - 2 - HORACE MANN EDUCATORS CORPORATION Supplemental
Business Segment Overview (Unaudited) (Dollars in Millions) Quarter
Ended Six Months Ended June 30, June 30, 2009 2008 % Change 2009
2008 % Change PROPERTY & CASUALTY Premiums written $140.7
$138.5 1.6% $269.8 $265.3 1.7% Premiums earned 135.8 134.5 1.0%
270.8 267.5 1.2% Net investment income 8.5 9.1 -6.6% 16.8 18.3
-8.2% Other income 0.6 0.5 20.0% 2.0 1.1 81.8% Losses and loss
adjustment expenses (LAE) 106.7 111.0 -3.9% 200.3 202.7 -1.2%
Operating expenses (includes policy acquisition expenses amortized)
34.2 32.5 5.2% 68.4 65.2 4.9% Income before tax 4.0 0.6 566.7% 20.9
19.0 10.0% Net income 3.6 1.9 89.5% 16.0 14.9 7.4% Net investment
income, after tax 7.2 7.6 -5.3% 14.2 15.3 -7.2% Catastrophe costs,
after tax (A) 9.8 14.5 -32.4% 12.7 18.0 -29.4% Catastrophe losses
and LAE, before tax 15.1 22.4 -32.6% 19.6 27.8 -29.5% Reinsurance
reinstatement premiums, before tax - - - - - - Operating
statistics: Loss and loss adjustment expense ratio 78.5% 82.5% N.M.
73.9% 75.8% N.M. Expense ratio 25.3% 24.2% N.M. 25.3% 24.4% N.M.
Combined ratio 103.8% 106.7% N.M. 99.2% 100.2% N.M. Effect on the
combined ratio of: Catastrophe costs 11.1% 16.6% N.M. 7.2% 10.4%
N.M. Claims office consoli- dation costs (all in LAE) 0.2% - N.M.
1.2% - N.M. Automobile and property detail: Premiums written
(voluntary) (B) $139.7 $137.7 1.5% $267.9 $264.3 1.4% Automobile
91.7 90.3 1.6% 184.6 182.1 1.4% Property 48.0 47.4 1.3% 83.3 82.2
1.3% Premiums earned (voluntary) (B) 135.3 134.1 0.9% 269.7 267.4
0.9% Automobile 92.3 91.1 1.3% 184.0 182.0 1.1% Property 43.0 43.0
- 85.7 85.4 0.4% Policies in force (voluntary) (in thousands) 793
799 -0.8% Automobile 531 535 -0.7% Property 262 264 -0.8% Policy
renewal rate (voluntary) Automobile (6 months) 91.5% 91.3% N.M.
Property (12 months) 89.3% 88.8% N.M. Voluntary automobile
operating statistics: Loss and loss adjustment expense ratio 69.3%
71.7% N.M. 69.9% 71.4% N.M. Expense ratio 25.2% 24.3% N.M. 25.5%
24.3% N.M. Combined ratio 94.5% 96.0% N.M. 95.4% 95.7% N.M. Effect
on the combined ratio of: Catastrophe costs 0.9% 2.5% N.M. 0.7%
1.4% N.M. Claims office consolidation costs (all in LAE) 0.2% -
N.M. 1.5% - N.M. Total property operating statistics: Loss and loss
adjustment expense ratio 98.5% 106.2% N.M. 82.7% 86.2% N.M. Expense
ratio 25.3% 23.9% N.M. 24.8% 24.4% N.M. Combined ratio 123.8%
130.1% N.M. 107.5% 110.6% N.M. Effect on the combined ratio of:
Catastrophe costs 33.6% 47.5% N.M. 21.6% 29.8% N.M. Claims office
consolidation costs (all in LAE) 0.2% - N.M. 0.8% - N.M. Prior
years' reserves favorable (adverse) development, pretax Voluntary
automobile $2.5 $2.2 13.6% $ 5.0 $ 3.5 42.9% Total property (0.4)
0.2 N.M. - 0.6 -100.0% Other property and casualty - - N.M. 0.5 1.0
-50.0% Total 2.1 2.4 -12.5% 5.5 5.1 7.8% N.M. - Not meaningful. (A)
Includes allocated loss adjustment expenses and catastrophe
reinsurance reinstatement premiums. (B) Amounts are net of
additional ceded premiums to reinstate the Company's property and
casualty catastrophe reinsurance coverage, if any, as quantified
above. - 3 - HORACE MANN EDUCATORS CORPORATION Supplemental
Business Segment Overview (Unaudited) (Dollars in Millions) Quarter
Ended Six Months Ended June 30, June 30, 2009 2008 % Change 2009
2008 % Change ANNUITY Contract deposits $98.9 $80.8 22.4% $167.6
$154.7 8.3% Variable 29.8 35.3 -15.6% 56.0 70.9 -21.0% Fixed 69.1
45.5 51.9% 111.6 83.8 33.2% Contract charges earned 3.4 4.9 -30.6%
6.6 9.6 -31.3% Net investment income 37.0 34.0 8.8% 71.8 67.1 7.0%
Net interest margin (without realized investment gains and losses)
12.4 10.9 13.8% 23.2 21.4 8.4% Other income 0.6 1.4 -57.1% 1.4 2.7
-48.1% Mortality loss and other reserve changes 0.9 0.4 125.0% 0.3
(0.1) N.M. Operating expenses (includes policy acquisition expenses
amortized) 8.0 8.7 -8.0% 20.5 20.2 1.5% Amortization of intangible
assets - 1.3 -100.0% - 2.2 -100.0% Income before tax 9.3 7.6 22.4%
11.0 11.2 -1.8% Net income 6.3 5.1 23.5% 7.5 8.1 -7.4% Pretax
income increase (decrease) due to valuation of: Deferred policy
acquisition costs $1.3 $0.2 550.0% $(1.7) $(2.1) -19.0% Value of
acquired insurance in force - (0.3) -100.0% - (0.2) -100.0%
Guaranteed minimum death benefit reserve 0.7 - N.M. 0.2 (0.1) N.M.
Annuity contracts in force (in thousands) 177 168 5.4% Accumulated
value on deposit $3,401.1 $3,600.6 -5.5% Variable 1,012.5 1,382.7
-26.8% Fixed 2,388.6 2,217.9 7.7% Annuity accumulated value
retention - 12 months Variable accumulations 93.4% 91.8% N.M. Fixed
accumulations 94.1% 92.4% N.M. LIFE Premiums and contract deposits
$25.1 $25.7 -2.3% $ 48.6 $ 49.6 -2.0% Premiums and contract charges
earned 24.3 24.4 -0.4% 48.6 49.2 -1.2% Net investment income 15.8
14.9 6.0% 30.8 29.5 4.4% Income before tax 7.9 7.9 - 13.3 12.3 8.1%
Net income 5.0 5.2 -3.8% 8.4 7.8 7.7% Pretax income increase
(decrease) due to valuation of: Deferred policy acquisition costs $
- $(0.1) -100.0% $(0.1) $(0.1) - Life policies in force (in
thousands) 219 225 -2.7% Life insurance in force $13,680 $13,647
0.2% Lapse ratio - 12 months (Ordinary life insurance) 5.5% 5.6%
N.M. CORPORATE AND OTHER (A) Components of income (loss) before
tax: Net realized investment gains (losses) $11.0 $(8.1) N.M. $
10.2 $(10.5) N.M. Interest expense (3.5) (3.4) 2.9% (7.0) (6.8)
2.9% Other operating expenses, net investment income and other
income (1.6) (0.2) N.M. (2.7) (0.9) 200.0% Income (loss) before tax
5.9 (11.7) N.M. 0.5 (18.2) N.M. Net income (loss) 3.7 (7.7) N.M.
0.1 (12.0) N.M. N.M. - Not meaningful. (A) The Corporate and Other
segment includes interest expense on debt and the impact of
realized 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. - 4 - HORACE
MANN EDUCATORS CORPORATION Supplemental Business Segment Overview
(Unaudited) (Dollars in Millions) Quarter Ended Six Months Ended
June 30, June 30, 2009 2008 % Change 2009 2008 % Change INVESTMENTS
Annuity and Life Fixed maturities, at fair value (amortized cost
2009, $3,105.7; 2008, $3,223.7) $2,953.7 $3,137.5 -5.9% Equity
securities, at fair value (cost 2009, $46.3; 2008, $52.9) 36.6 47.7
-23.3% Short-term investments 341.9 52.4 552.5% Short-term
investments, securities lending collateral - 63.1 -100.0% Policy
loans and other 111.7 104.3 7.1% Total Annuity and Life investments
3,443.9 3,405.0 1.1% Property & Casualty Fixed maturities, at
fair value (amortized cost 2009, $705.4; 2008, $682.9) 698.7 671.3
4.1% Equity securities, at fair value (cost 2009, $20.0; 2008,
$39.9) 17.1 37.0 -53.8% Short-term investments 18.1 26.1 -30.7%
Short-term investments, securities lending collateral - - - Total
Property & Casualty investments 733.9 734.4 -0.1% Corporate
investments 29.1 4.1 N.M. Total investments 4,206.9 4,143.5 1.5%
Net investment income Before tax $61.0 $57.8 5.5% $118.9 $114.4
3.9% After tax 41.5 39.3 5.6% 80.6 77.8 3.6% Net realized
investment gains (losses) by investment portfolio included in
Corporate and Other segment income (loss) Property & Casualty
$2.3 $(1.5) N.M. $(5.9) $(1.7) 247.1% Annuity 7.3 (7.7) N.M. 11.4
(11.1) N.M. Life 1.4 1.1 27.3% 4.7 2.3 104.3% Corporate and Other -
- N.M. - - N.M. Total, before tax 11.0 (8.1) N.M. 10.2 (10.5) N.M.
Total, after tax 7.2 (5.1) N.M. 6.6 (6.7) N.M. Per share, diluted
$0.18 $(0.12) N.M. $ 0.16 $(0.16) N.M. N.M. - Not meaningful. - 5 -
HORACE MANN EDUCATORS CORPORATION Supplemental Business Segment
Overview (Unaudited) (Dollars in Millions) March December June
December 31, 31, 30, 31, June 30, 2009 2009 2008 2008 2007 Net Net
Net Net Net Fair Unreal- Unreal- Unreal- Unreal- Unreal- Value ized
ized ized ized ized Gain Gain Gain Gain Gain (Loss) (Loss) (Loss)
(Loss) (Loss) FIXED MATURITY & EQUITY SECURITY INVESTMENTS
Fixed income securities U.S. government and federally sponsored
agency bonds $216.6 $(2.5) $3.4 $ 4.9 $ 0.8 $ 2.3 Municipal bonds
743.8 6.3 (3.7) (14.1) (5.1) 6.0 Corporate bonds Financial
institutions 219.3 (11.0) (35.3) (19.9) (13.5) (3.0) Other 1,362.7
(14.3) (140.1) (122.6) (34.1) 11.0 High yield 163.8 (26.4) (28.0)
(38.0) (9.5) (4.6) Foreign government bonds 24.7 0.7 (0.1) 0.5 0.9
1.5 Mortgage-backed securities Prime agency 490.1 18.5 21.2 20.5
(2.3) 1.9 Prime other 15.2 (0.8) (0.2) (0.6) (1.6) 0.5 Sub-prime,
Alt-A 3.6 (0.8) (0.9) (0.7) (0.6) (0.1) Commercial mortgage- backed
securities 257.7 (106.6) (115.8) (108.6) (23.9) (5.4) Asset-backed
securities Sub-prime, Alt-A 1.1 (0.3) (0.1) 0.1 (0.1) -
Collateralized debt obligations, collateralized loan obligations
10.7 (4.0) (4.7) (0.4) (2.5) (3.8) Other 101.9 (4.8) (8.3) (8.5)
(1.1) 0.4 Preferred stocks Financial institutions 59.8 (19.7)
(34.2) (29.8) (9.4) (7.6) Other 33.6 (6.1) (12.5) (10.0) (4.2)
(3.4) Total fixed income securities 3,704.6 (171.8) (359.3) (327.2)
(106.2) (4.3) Common stocks 1.5 0.5 (0.3) - 0.3 (0.5) Derivatives -
- - - - - Total fixed maturity and equity security invest- ments
$3,706.1 $(171.3) $(359.6)$(327.2) $(105.9) $ (4.8) - 6 -
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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