Horace Mann Issues Earnings Warning
28 October 2003 - 8:58AM
PR Newswire (US)
Horace Mann Issues Earnings Warning SPRINGFIELD, Ill., Oct. 27
/PRNewswire-FirstCall/ -- Horace Mann Educators Corporation
announced today that its net income for the third quarter and nine
months ended September 30, 2003 was negatively affected by
approximately 57 cents per share due to adverse prior years'
development and strengthening of property and casualty claims
reserves. The company's recently completed internal reserve studies
identified $30.1 million pretax of adverse prior years'
development, which primarily relates to voluntary automobile
liability claims from the 2001 and 2002 accident years. In addition
to the prior years' development, the company also strengthened
current accident year reserves by approximately $8 million pretax
in the third quarter. "We are obviously disappointed in the
continuing and accelerated levels of adverse prior years'
development, which have become more fully revealed as we have
introduced new claims processes in 2003," said Louis G. Lower II,
President and Chief Executive Officer. "We have retained
independent property and casualty actuarial and claims consultants
from Deloitte & Touche to conduct a review of our claims
operations and reserving processes. This will include a review of
claim files and claim handling processes and procedures (including
case reserving and establishment of supplemental and IBNR reserves)
and will help us understand the continuing adverse reserve
development as well as give us perspective on future expectations
and reserving implications. Completion of this independent review
is targeted for January, 2004. While further adjustments to our
reserves may be necessary based on this study, our September 30
held reserves of $308 million have been established toward what we,
and our independent advisors, believe to be the high end of a
reasonable range." Primarily as a result of the property and
casualty adverse development and reserve strengthening, the company
is reducing its guidance for full year 2003 net income before
realized investment gains and losses to 30 cents to 40 cents per
share. Management of Horace Mann will host a conference call on
October 28, 2003 at 8:30 a.m. EST to discuss the information
announced today. The call will be simulcast over the Internet and
can be accessed by logging onto a link on the Horace Mann website
at http://www.horacemann.com/ . For those unable to listen to the
simulcast, on-demand replay will be available via the Internet
through November 28, 2003 or by telephone through November 4, 2003.
To listen to a telephone replay of the call, dial 973-341-3080 (pin
number 4272893). The company's third quarter earnings release is
scheduled for October 30, 2003, with a conference call hosted by
management the following day. Horace Mann -- the largest national
multiline insurance company focusing on educators' financial needs
-- provides retirement annuities, life insurance, property/casualty
insurance, and other financial solutions. Founded by educators for
educators in 1945, the company is headquartered in Springfield,
Ill. Horace Mann is publicly traded on the New York Stock Exchange
as HMN. 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 undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as the result of new information, future events or otherwise.
Information concerning factors that could cause actual results to
differ materially from those in forward-looking statements is
contained from time to time in the company's public filings with
the Securities and Exchange Commission. 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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