A.M. Best Assigns Ratings to Horace Mann Educators Corporation’s New Shelf Registration
February 16 2012 - 1:00PM
Business Wire
A.M. Best Co. has assigned indicative ratings of “bbb” on
senior debt, “bbb-” on subordinated debt and “bb+” on the preferred
stock of Horace Mann Educators Corporation (HMEC) [NYSE:
HMN] (Delaware). The outlook assigned to these ratings is stable.
The new shelf registration replaces HMEC’s previous shelf
registration, which has expired. Consequently, the indicative
ratings for the previous shelf registration have been
withdrawn.
The rating assignments recognize Horace Mann Property &
Casualty’s strong overall capitalization, moderate operating
earnings and continued expertise in writing personal lines products
in the educators’ market, which has enabled the group to obtain
numerous endorsements from local, state and national educational
associations. The rating assignments also recognize Horace Mann
Life’s important role within HMEC and the benefits it derives from
HMEC’s strong business franchise in the K-12 educators’ market.
Furthermore, the ratings reflect Horace Mann Life’s strong
risk-adjusted capital position and considerable improvement in its
operating results in recent years due to strong annuity sales and
improving yields in its investment portfolio.
As of September 30, 2011, HMEC’s unadjusted debt-to-capital and
debt-to-tangible capital ratios were 18.4% and 19.1%, respectively,
well within the guidelines for the ratings. While HMEC’s interest
coverage declined from historical levels through the third quarter
of 2011, largely due to a significant increase in catastrophe and
weather-related losses, historical interest coverage has been very
strong and well supportive of the ratings.
The methodology used in determining these ratings is Best’s
Credit Rating Methodology, which provides a comprehensive
explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Key
criteria utilized include: “A.M. Best's Ratings & the Treatment
of Debt” and “Risk Management and the Rating Process for Insurance
Companies.” Best’s Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and
most authoritative insurance rating and information source. For
more information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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