Amidst unprecedented COVID-19 pandemic,
commitment to education market remains unwavering
- Business is fully operational with agents and 95% of company
staff working remotely to support educators with insurance and
retirement solutions
- Net income down, largely due to realized losses on investments
due to mark-to-market adjustments related to equity market
volatility
- Core earnings up 25% on Property & Casualty segment
performance and inclusion of new Supplemental segment, partially
offset by lower net investment income on smaller Retirement
portfolio
- Financial position remains strong, with A+ rated investment
portfolio and capitalization ratios that support current financial
strength ratings
- 2020 core EPS guidance unchanged at $2.55 to $2.75 using
conservative COVID-19 scenario analysis
Horace Mann Educators Corporation (NYSE:HMN) today reported
financial results for the quarter ended March 31, 2020:
Horace Mann Consolidated
Financial Highlights
Three Months Ended March
31,
($ in millions, except per share
amounts)
2020
2019
% Change
Total revenues
$
307.3
$
315.9
-2.7
%
Net income
18.5
32.2
-42.5
%
Net investment gains (losses)
after tax
(14.5
)
5.8
N.M.
Core earnings*
33.0
26.4
25.0
%
Per diluted share:
Net income
0.44
0.77
-42.9
%
Net investment gains (losses) after
tax
(0.34
)
0.14
N.M.
Core earnings per diluted share*
0.78
0.63
23.8
%
Book value per share
35.80
34.60
3.5
%
Book value per share excluding net
unrealized investment gains on fixed maturity securities*
32.49
29.47
10.2
%
N.M. - Not meaningful.
* These measures are not based on accounting principles
generally accepted in the United States (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.
“The COVID-19 pandemic has affected families and communities
across the country, and the pain it has caused is felt by all of
us. As a company committed to serving educators, we have always
known how important our schools and teachers are to the growth and
success of our communities. In this environment, families are
facing significant day-to-day challenges as they attempt to balance
student learning with other priorities at home, which has increased
the appreciation we all have for the education profession,” said
Horace Mann President and CEO Marita Zuraitis. “We are supporting
educators during this time, both on a personal level, with payment
flexibility, enhanced coverages and premium relief through our
Teacher Appreciation Program; and on a professional level, with
resources and funding to support remote learning environments.
“As the scope of the pandemic grew in March, we were able to
quickly mobilize to address new needs of our stakeholder groups due
to our comprehensive business continuity plans,” Zuraitis said. “We
maintained service levels while shifting 95% of our staff to a
remote work environment within weeks. We quickly deployed upgraded
technology to help our agency force transition to virtual financial
wellness workshops and customer meetings. In addition, we expanded
our e-signature and online appointment setting capabilities, as
well as added relevant agent training, helping our agents and
customers to more easily conduct business in a virtual
environment.
“As we look ahead, the specific course of the pandemic and its
economic repercussions are difficult to predict,” Zuraitis
continued. “But we do know three things. First, educators will
continue to play a vital role, whether they are teaching remotely
or after they return to their classrooms. Second, the solutions we
provide will remain important in helping them secure their future.
And third, Horace Mann is prepared and well-positioned to continue
to meet their needs.
“Clearly, the early impacts of the pandemic and related economic
conditions are reflected in our financial results for first
quarter. The valuable operational improvements we’ve made in our
products, distribution and infrastructure over the past several
years position us well to navigate in this environment,” Zuraitis
said. “As we look forward, we are reiterating full-year core EPS
guidance of $2.55 to $2.75, using scenario analyses that we believe
to be conservative and that reflect the varying effects we see in
our different business segments.
“In addition, a multi-year effort to de-risk our investment
portfolio included increasing its quality and reinsuring a large
block of legacy annuity business,” Zuraitis added. “Not only has
this served us well in the current volatile financial market, it
will provide future opportunities to capitalize on disruptions,
similar to our approach through the 2008 financial crisis.
“We remain confident that we are well-positioned to reach a
double-digit return on equity over the long term, while bringing
our solutions to even more educators. As we move forward, we will
continue to keep the well-being of our customers, employees, agents
and shareholders at the forefront of our discussions and
decision-making,” Zuraitis concluded.
Property and Casualty Segment First-Quarter Combined Ratio at
88.6%
(All comparisons vs. same period in 2019, unless noted
otherwise)
Three Months Ended March
31,
($ in millions)
2020
2019
Change
Property and Casualty written
premiums*
$
153.6
$
161.7
-5.0
%
Property and Casualty net income / core
earnings*
26.6
15.0
77.3
%
Property and Casualty combined ratio
88.6
%
95.5
%
-6.9
pts
Property and Casualty underlying loss
ratio*
58.0
%
63.3
%
-5.3
pts
Property and Casualty expense ratio
25.9
%
27.2
%
-1.3
pts
Property and Casualty catastrophe
costs
5.3
%
6.2
%
-0.9
pts
Property and Casualty underlying combined
ratio*
83.9
%
90.5
%
-6.6
pts
Auto combined ratio
91.7
%
98.0
%
-6.3
pts
Auto underlying loss ratio*
66.5
%
70.9
%
-4.4
pts
Property combined ratio
82.7
%
90.5
%
-7.8
pts
Property underlying loss ratio*
40.7
%
46.5
%
-5.8
pts
N.M. - Not meaningful.
Property and Casualty written premiums declined due to lower
policy counts and a lower level of rate increases being implemented
in 2020. Segment core earnings rose substantially, primarily due to
the improved combined ratio, and to a lesser extent a tax benefit
from the CARES Act.
The combined ratio improved 6.9 points for several reasons:
improved underlying loss ratios for both auto and property, lower
catastrophe losses and the expected improvement in the expense
ratio due to actions taken in 2019. The underlying auto loss ratio
improvement reflected the ongoing benefit of profitability
initiatives as well as temporary changes in policyholder behavior
due to COVID-19. The underlying property loss ratio improved
because of lower non-catastrophe-related weather losses and fire
losses.
Catastrophe losses from six events added 5.3 points to the
combined ratio, with catastrophe losses of $8.8 million. The
largest losses came from a multi-state storm event in early
February and a Midwestern storm in late March. The company
continues to estimate full-year 2020 catastrophe losses would be
between $45 and $55 million, as second-quarter events are expected
to drive approximately 50% of the total for the year.
Auto and property policy retention rates for the quarter were
81.3% and 87.1%, respectively, remaining in line with recent
experience.
Supplemental Segment Contributes $10.5 Million to
First-Quarter Earnings
On July 1, 2019, Horace Mann acquired NTA Life Enterprises, LLC
(NTA). As a part of Horace Mann, NTA continues to provide
supplemental insurance products to the education market, building
on nearly 50 years of experience in the sector. NTA specializes in
developing, marketing and underwriting supplemental insurance
products, including cancer, heart, limited supplemental disability
and accident.
Three Months Ended March
31,
($ in millions)
2020
2019
Change
Supplemental sales*
$
3.7
N/A
N/A
Earned premiums
33.0
N/A
N/A
Supplemental net income / core
earnings*
10.5
N/A
N/A
Pretax profit margin (1)
36.0
%
N/A
N/A
N/A - The acquisition of NTA closed on July 1, 2019.
(1) Measured to total revenues.
Supplemental segment sales were $3.7 million for the quarter,
reflecting significantly lower sales volume in the last several
weeks of the quarter due to school closings because of COVID-19.
Persistency remained steady at 89.2%.
The segment added $10.5 million to core earnings, with the
pretax profit margin temporarily above management’s longer-term
expectations. First-quarter results reflected favorable trends in
reserves on the acquired business and some 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 reduces quarterly core earnings by
$3.2 million pretax.
Retirement Segment Sees 10% Increase in Annuity Contract
Deposits
Effective April 1, 2019, Horace Mann reinsured a block of
approximately $2.9 billion of policy liabilities related to legacy
individual annuities written in 2002 or earlier. The consideration
paid by Horace Mann in the annuity reinsurance transaction is
reported as a deposit asset on reinsurance on the balance sheet and
the company includes related accreted investment income calculated
based on the ultimate anticipated cash flows from the transaction
in income.
(All comparisons vs. same period in 2019, unless noted
otherwise)
Three Months Ended March
31,
($ in millions)
2020
2019
Change
Annuity contract deposits*
$
117.7
$
107.3
9.7
%
Annuity assets under management (1)
4,026.6
6,972.7
-42.3
%
Total assets under administration (2)
7,381.3
10,528.4
-29.9
%
Retirement net income (loss) / core
earnings*
(0.9
)
12.2
-107.4
%
Retirement core earnings excluding DAC
unlocking*
2.3
10.6
-78.3
%
N.M. - Not meaningful.
(1) Amount reported as of March 31, 2020 excludes $539.6 of
assets under management held under modified coinsurance
reinsurance.
(2) Includes Annuity AUM, Brokerage and Advisory AUA, and
Recordkeeping AUA.
Reflecting the annuity reinsurance transaction, Horace Mann
currently has $4.0 billion in assets under management, including
$2.1 billion of fixed annuities, $1.4 billion of variable annuities
and $0.5 billion of fixed indexed annuities. Assets under
administration, which includes advisory and recordkeeping assets
added through the acquisition of BCG in 2019, were down 10.8% from
year-end 2019, primarily due to market volatility.
Annuity contract deposits rose 9.7% over prior year, reflecting
the value educators continue to see in our Retirement savings
vehicles. Total cash value persistency remained strong at 94.5% for
variable annuities and 94.0% for fixed annuities.
The segment had a net loss for the quarter, partially due to
negative DAC unlocking from equity market volatility, compared with
net income in last year’s first quarter that included the benefit
of favorable DAC unlocking. In addition, last year’s results are
for a period before the company entered into the annuity
reinsurance transaction and redeployed capital for the acquisition
of NTA.
Core earnings excluding DAC unlocking for the quarter were flat
sequentially at $2.3 million.
After the annuity reinsurance transaction, the average crediting
rate on traditional fixed annuities is now 2.5% vs. 3.6%
previously. The net interest spread for the first quarter was 151
basis points, reflecting lower limited partnership earnings as a
result of volatility in the fixed maturities securities market.
Life Segment Has Steady Sales of Recurring Premium
Products
(All comparisons vs. same period in 2019, unless noted
otherwise)
Three Months Ended March
31,
($ in millions)
2020
2019
Change
Life sales*
$
3.3
$
4.3
-23.3
%
Life mortality costs
10.1
10.5
-3.8
%
Life net income / core earnings*
0.6
3.3
-81.8
%
Life sales were down from last year on lower single premium
product sales. Sales of recurring premium products continued in
line with last year’s first quarter. Life core earnings* largely
reflected lower net investment income. Life persistency of 95.3%
was unchanged from the prior year period.
Investment Portfolio Well-Positioned for Market Disruption
and Economic Downturn
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.
(All comparisons vs. same period in 2019, unless noted
otherwise)
Three Months Ended March
31,
($ in millions)
2020
2019
Change
Pretax net investment income - investment
portfolio
$
58.6
$
92.8
-36.9%
Pretax investment income - deposit asset
on reinsurance
23.7
—
N.M.
Total pretax net investment income
82.3
92.8
-11.3%
Pretax net investment gains (losses)
(18.5
)
7.4
N.M.
Pretax net unrealized investment gains
(losses) on fixed maturity securities
189.7
310.5
-38.9%
Investment yield, excluding limited
partnership interests, pretax - annualized
4.51
%
4.83
%
-0.32pts
N.M. - Not meaningful.
Total net investment income declined 11.3% year-over-year. Net
investment income on the managed portfolio declined sequentially by
$3.4 million, largely due to a handful of mark-to-market
adjustments on limited partnership investments and the lower rate
environment. Accreted investment income for the deposit asset on
reinsurance was comparable to the fourth quarter of 2019.
First-quarter net investment losses included $14.5 million in
mark-to-market adjustments on equity securities and options used to
hedge the company’s fixed index annuity and indexed universal life
products and $3.7 million in other-than-temporary impairment
charges. The company’s fixed maturity securities portfolio remained
in a net unrealized investment gain position of $189.7 million at
March 31, 2020, despite unprecedented market volatility.
Book Value Excluding Unrealized Investment Gains Up 10% Year
Over Year
At March 31, 2020, shareholders’ equity was $1.48 billion, or
$35.80 per share. Excluding net unrealized investment gains on
fixed maturity securities, shareholders’ equity was $1.34 billion,
or $32.49 per share*, flat with year end and up 10.2% from a year
ago. The year-over-year improvement in book value excluding
unrealized investment gains on fixed maturity securities primarily
reflected the realized gain on assets transferred in the 2019
annuity reinsurance transaction, as well as strong earnings.
At March 31, 2020, total debt was $433.1 million, with $135.0
million outstanding on the company’s line of credit. The
debt-to-capital ratio was 24.4%.
During the first quarter, Horace Mann repurchased 52,095 shares
of common stock at an average price of $41.17. As of March 31,
2020, $20.6 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 8, 2020 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, 2019 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 (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,
2020
2019
% Change
EARNINGS
SUMMARY
Net income
$
18.5
$
32.2
-42.5
%
Net investment gains (losses), after
tax
(14.5
)
5.8
N.M.
Core earnings*
33.0
26.4
25.0
%
Per diluted share:
Net income
$
0.44
$
0.77
-42.9
%
Net investment gains (losses), after
tax
$
(0.34
)
$
0.14
N.M.
Core earnings*
$
0.78
$
0.63
23.8
%
Weighted average number of shares and
equivalent shares (in millions) - Diluted
42.0
41.8
0.5
%
RETURN ON
EQUITY
Net income return on equity - LTM (1)
11.3
%
2.2
%
Net income return on equity -
annualized
4.9
%
9.5
%
Core return on equity - LTM* (2)
7.6
%
2.7
%
Core return on equity - annualized*
9.9
%
8.8
%
FINANCIAL
POSITION
Per share (3):
Book value
$
35.80
$
34.60
3.5
%
Effect of net unrealized investment gains
on fixed maturity securities (4)
$
3.31
$
5.13
-35.5
%
Dividends paid
$
0.30
$
0.2875
4.3
%
Ending number of shares outstanding (in
millions) (3)
41.3
41.2
0.2
%
Total assets
$
11,972.2
$
11,561.1
3.6
%
Short-term debt
135.0
—
N.M.
Long-term debt
298.1
297.8
0.1
%
Total shareholders’ equity
1,477.6
1,423.7
3.8
%
ADDITIONAL
INFORMATION
Net investment gains (losses)
Before tax
$
(18.5
)
$
7.4
N.M.
After tax
(14.5
)
5.8
N.M.
Per share, diluted
$
(0.34
)
$
0.14
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 41,277,498
at March 31, 2020 and 41,150,005 at March 31, 2019.
(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,
2020
2019
% Change
STATEMENTS OF
OPERATIONS
Insurance premiums and contract charges
earned
$
236.3
$
209.8
12.6
%
Net investment income
82.3
92.8
-11.3
%
Net investment gains (losses)
(18.5
)
7.4
N.M.
Other income
7.2
5.9
22.0
%
Total revenues
307.3
315.9
-2.7
%
Benefits, claims and settlement
expenses
138.7
139.4
-0.5
%
Interest credited
51.5
52.9
-2.6
%
Operating expenses
60.7
56.2
8.0
%
DAC unlocking and amortization expense
30.0
25.0
20.0
%
Intangible asset amortization expense
3.7
0.5
N.M.
Interest expense
4.2
3.3
27.3
%
Total benefits, losses and expenses
288.8
277.3
4.1
%
Income before income taxes
18.5
38.6
-52.1
%
Income tax expense (benefit)
—
6.4
-100.0
%
Net income
$
18.5
$
32.2
-42.5
%
PREMIUMS WRITTEN
AND CONTRACT DEPOSITS*
Property and Casualty
$
153.6
$
161.7
-5.0
%
Supplemental
32.6
—
—
Annuity contract deposits
117.7
107.3
9.7
%
Life
24.8
26.4
-6.1
%
Total
$
328.7
$
295.4
11.3
%
SEGMENT NET
INCOME (LOSS)
Property and Casualty
$
26.6
$
15.0
77.3
%
Supplemental
10.5
—
—
Retirement
(0.9
)
12.2
-107.4
%
Life
0.6
3.3
-81.8
%
Corporate and Other (1)
(18.3
)
1.7
N.M.
Net income (loss)
$
18.5
$
32.2
-42.5
%
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 13.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in Millions)
Three Months Ended March 31,
2020
2019
Change
PROPERTY and
CASUALTY
Premiums written*
$
153.6
$
161.7
-5.0
%
Premiums earned
166.5
170.8
-2.5
%
Net investment income
10.3
10.2
1.0
%
Other income
0.8
0.4
100.0
%
Losses and loss adjustment expenses
(LAE)
104.4
116.8
-10.6
%
Operating expenses (includes amortization
expense)
43.2
46.5
-7.1
%
Interest expense
0.2
0.3
-33.3
%
Income before tax
29.8
17.8
67.4
%
Net income / core earnings*
26.6
15.0
77.3
%
Net investment income, after tax
8.7
8.7
—
%
Catastrophe costs (1)
After tax
7.0
8.5
-17.6
%
Before tax
8.8
10.8
-18.5
%
Prior years’ reserves favorable (adverse)
development, before tax
Automobile
1.0
1.0
—
%
Property and other
—
1.0
-100.0
%
Total
1.0
2.0
-50.0
%
Operating statistics:
Loss and loss adjustment expense ratio
62.7
%
68.3
%
-5.6
pts
Expense ratio
25.9
%
27.2
%
-1.3
pts
Combined ratio
88.6
%
95.5
%
-6.9
pts
Effect on the combined ratio of:
Catastrophe costs (1)
5.3
%
6.2
%
-0.9
pts
Prior years’ (favorable) reserve
development
-0.6
%
-1.2
%
0.6
pts
Combined ratio excluding the effects of
catastrophe costs and prior years’ reserve development (underlying
combined ratio)*
83.9
%
90.5
%
-6.6
pts
Risks in force (in thousands)
616
654
-5.8
%
Automobile (2)
424
454
-6.6
%
Property
192
200
-4.0
%
Policy renewal rate - 12 months
Automobile
81.3
%
81.5
%
-0.2
pts
Property
87.1
%
87.8
%
-0.7
pts
N.M.-
Not meaningful.
(1)
Includes allocated loss adjustment
expenses and, when applicable, catastrophe reinsurance
reinstatement premiums.
(2)
Includes assumed risks in force of 4.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in Millions)
Three Months Ended March 31,
2020
2019
Change
SUPPLEMENTAL
Premiums and contract charges earned
$
33.0
N/A
N/A
Net investment income
3.5
N/A
N/A
Other income
0.7
N/A
N/A
Benefits
10.7
N/A
N/A
Change in reserves
(0.2
)
N/A
N/A
Operating expenses (includes DAC unlocking
and amortization expense)
10.1
N/A
N/A
Intangible asset amortization expense
3.2
N/A
N/A
Income before tax
13.4
N/A
N/A
Net income / core earnings*
10.5
N/A
N/A
Benefits ratio (1)
31.8
%
N/A
N/A
Operating expense ratio (2)
27.1
%
N/A
N/A
Pretax profit margin (3)
36.0
%
N/A
N/A
Premium persistency (rolling 12
months)
89.2
%
N/A
N/A
N/A - The acquisition of NTA closed on
July 1, 2019.
(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,
2020
2019
Change
RETIREMENT
Contract deposits*
$
117.7
$
107.3
9.7
%
Variable
57.8
48.8
18.4
%
Fixed
59.9
58.5
2.4
%
Contract charges earned
7.4
8.6
-14.0
%
Net investment income
29.8
64.7
-53.9
%
Interest credited
15.7
41.7
-62.4
%
Net interest margin
14.1
23.0
-38.7
%
Investment income - deposit asset on
reinsurance
23.7
—
N.M.
Interest credited - Reinsured block
24.6
—
N.M.
Net interest margin - Reinsured block
(0.9
)
—
N.M.
Other income
5.3
5.1
3.9
%
Mortality loss and other reserve
changes
(1.6
)
(0.6
)
-166.7
%
Operating expenses (includes DAC unlocking
and amortization expense)
24.9
21.0
18.6
%
Intangible asset amortization expense
0.5
0.5
—
%
Income (loss) before tax
(1.1
)
14.6
-107.5
%
Net income (loss) / core earnings
(0.9
)
12.2
-107.4
%
Pretax income increase (decrease) due to
evaluation of:
Deferred policy acquisition costs
$
(4.0
)
$
2.0
N.M.
Guaranteed minimum death benefit
reserve
(0.3
)
0.1
N.M.
Retirement contracts in force (in
thousands)
229
226
1.3
%
Annuity accumulated account value on
deposit / Assets under management
4,026.6
$
6,972.7
-42.3
%
Variable (1)
1,414.6
2,224.1
-36.4
%
Fixed
2,612.0
4,748.6
-45.0
%
Annuity accumulated value retention - 12
months
Variable accumulations
94.5
%
94.3
%
0.2
pts
Fixed accumulations
94.0
%
94.1
%
-0.1
pts
LIFE
Premiums and contract deposits*
$
24.8
$
26.4
-6.1
%
Premiums and contract charges earned
29.4
30.4
-3.3
%
Net investment income
15.6
18.1
-13.8
%
Other income
—
0.1
-100.0
%
Death benefits/mortality cost/change in
reserves
22.2
22.0
0.9
%
Interest credited
11.2
11.2
—
%
Operating expenses (includes DAC unlocking
and amortization expense)
10.9
11.4
-4.4
%
Income before tax
0.7
4.0
-82.5
%
Net income / core earnings*
0.6
3.3
-81.8
%
Pretax income increase (decrease) due to
evaluation of:
Deferred policy acquisition costs
$
0.1
$
—
N.M.
Life policies in force (in thousands)
201
198
1.5
%
Life insurance in force
$
19,295
$
18,409
4.8
%
Lapse ratio - 12 months (Ordinary life
insurance)
4.7
%
4.6
%
0.1
pts
N.M.-
Not meaningful.
(1)
Amount reported as of March 31, 2020
excludes $539.6 of assets under management held under modified
coinsurance reinsurance.
HORACE MANN EDUCATORS
CORPORATION
Business Segment Overview
(Unaudited)
($ in Millions)
Three Months Ended March 31,
2020
2019
% Change
CORPORATE AND
OTHER (1)
Components of income (loss) before
tax:
Net investment gains (losses)
$
(18.5
)
$
7.4
N.M.
Interest expense
(4.0
)
(3.0
)
-33.3
%
Other operating expenses, net investment
income and other income
(1.8
)
(2.2
)
18.2
%
Income (loss) before tax
(24.3
)
2.2
N.M.
Net income (loss)
(18.3
)
1.7
N.M.
INVESTMENTS
Retirement and Life
Fixed maturity securities, at fair value
(amortized cost 2020, $4,284.1; 2019, $6,656.9)
$
4,444.2
$
6,940.1
-36.0
%
Equity securities, at fair value
70.0
77.6
-9.8
%
Short-term investments
69.4
121.2
-42.7
%
Policy loans
152.0
153.4
-0.9
%
Limited partnerships
254.5
254.6
—
%
Other investments
26.6
26.0
2.3
%
Total Retirement and Life investments
5,016.7
7,572.9
-33.8
%
Property and Casualty
Fixed maturity securities, at fair value
(amortized cost 2020, $853.9; 2019, $830.5)
881.1
857.9
2.7
%
Equity securities, at fair value
15.8
27.9
-43.4
%
Short-term investments
3.7
15.2
-75.7
%
Limited partnerships
115.6
75.8
52.5
%
Other investments
1.0
1.0
—
%
Total Property and Casualty
investments
1,017.2
977.8
4.0
%
Supplemental
Fixed maturity securities, at fair value
(amortized cost 2020, $515.4; 2019, N/A)
517.9
N/A
N/A
Equity securities, at fair value
1.2
N/A
N/A
Short-term investments
23.4
N/A
N/A
Policy loans
0.8
N/A
N/A
Limited partnerships
19.2
N/A
N/A
Other investments
1.1
N/A
N/A
Total Supplemental investments
563.6
N/A
N/A
Corporate investments
3.7
7.1
-47.9
%
Total investments
6,601.2
8,557.8
-22.9
%
Net investment income - investment
portfolio
Before tax
$
58.6
$
92.8
-36.9
%
After tax
46.8
74.0
-36.8
%
Investment income - deposit asset on
reinsurance
Before tax
23.7
—
N.M.
After tax
18.7
—
N.M.
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/20200507005967/en/
Heather J. Wietzel Vice President, Investor Relations
217-788-5144 investorrelations@horacemann.com
Horace Mann Educators (NYSE:HMN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Horace Mann Educators (NYSE:HMN)
Historical Stock Chart
From Jul 2023 to Jul 2024