SPRINGFIELD, Ill., July 24, 2013 /PRNewswire/ -- Horace Mann
Educators Corporation (NYSE: HMN) today reported financial results
for the three and six months ended June 30,
2013:
|
Horace Mann Financial
Highlights
|
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
|
($ in millions,
except per share
amounts)
|
2013
|
2012
|
Change
|
|
2013
|
2012
|
Change
|
|
Total
revenues
|
$265.6
|
$254.1
|
4.5%
|
|
$520.2
|
$498.8
|
4.3%
|
|
Net income
|
26.0
|
13.1
|
98.5%
|
|
53.0
|
39.8
|
33.2%
|
|
Net income per
diluted share
|
0.63
|
0.32
|
96.9%
|
|
1.29
|
0.96
|
34.4%
|
|
Operating
income*
|
16.0
|
6.7
|
138.8%
|
|
38.6
|
33.1
|
16.6%
|
|
Operating income
per
diluted
share*
|
0.39
|
0.16
|
143.8%
|
|
0.94
|
0.80
|
17.5%
|
|
Book value per
share
|
|
|
|
|
27.72
|
29.06
|
-4.6%
|
|
Book value per share
excluding
the fair value
adjustment
for
investments*
|
|
|
|
|
22.79
|
20.55
|
10.9%
|
|
Property and Casualty
segment
net income
(loss)
|
4.1
|
(4.1)
|
N.M.
|
|
14.3
|
9.1
|
57.1%
|
|
Property and
Casualty
combined
ratio
|
103.3%
|
112.8%
|
-9.5 pts
|
|
100.3%
|
103.9%
|
-3.6 pts
|
|
Property and Casualty
underlying
combined
ratio*
|
89.0%
|
94.6%
|
-5.6 pts
|
|
92.3%
|
94.0%
|
-1.7 pts
|
|
Annuity segment net
income
|
$ 9.2
|
$ 7.9
|
16.5%
|
|
$ 20.3
|
$ 19.5
|
4.1%
|
|
Life segment net
income
|
5.6
|
6.1
|
-8.2%
|
|
9.9
|
11.3
|
-12.4%
|
|
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 supplemental numerical pages of
this document. 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 SEC.
|
"Horace Mann's second quarter
operating income was $0.39 per share,
a solid result considering the higher than anticipated level of
catastrophe losses in the quarter," said Horace Mann's President and CEO Peter H. Heckman. "Compared to the second
quarter and first six months of 2012, both the reported and
underlying property and casualty combined ratios improved, while
written and earned premiums increased 3%. In our annuity segment,
assets under management increased 10% over prior year, more than
offsetting the modest impact of spread compression, with deferred
policy acquisition cost unlocking also benefitting the quarterly
earnings comparison to prior year. In the life segment, second
quarter sales of Horace Mann
products increased 31% compared to a year earlier, with the
anticipated decline in earnings reflecting more normalized
mortality losses and a slight decrease in investment income."
Property and Casualty Segment
The property and casualty segment recorded net income of
$4.1 million for the current quarter
compared to a net loss of $4.1
million for the same period in 2012. The total property and
casualty combined ratio of 103.3% and the underlying combined ratio
of 89.0% improved 9.5 percentage points and 5.6 percentage points,
respectively, compared to the second quarter of 2012. While higher
than anticipated, pretax catastrophe losses in the current quarter
of $22.5 million, or 16.1 points,
decreased 23% compared to a year ago. Favorable prior years'
reserve development of $2.6 million,
or 1.8 points, was recorded in the second quarter, compared to
$4.5 million, or 3.3 points, of
favorable development recorded in the second quarter of 2012. The
combined ratio decrease reflected improvement in current accident
year auto and property non-catastrophe results, partially offset by
an anticipated increase in the expense ratio.
For the six months, property and casualty net income of
$14.3 million increased 57% compared
to the same period in 2012, including a 20% reduction in
catastrophe losses. The year-to-date combined ratio and underlying
combined ratio of 100.3% and 92.3%, respectively, improved 3.6
percentage points and 1.7 percentage points compared to the first
half of 2012.
Total property and casualty written premiums of $144.2 million and $276.1
million each increased 3% compared to the three and six
months ended June 30, 2012,
respectively, primarily driven by increases in average property and
auto premiums per policy.
Horace Mann's property and
casualty sales increased 7% compared to both the three and six
months ended June 30, 2012,
reflecting growth from both auto and property new business. In
addition, auto and property policy retention rates for the current
period were approximately 1 percentage point higher than prior
year.
Annuity Segment
Annuity segment net income of $9.2
million and $20.3 million for
the three and six months ended June 30,
2013, respectively, increased $1.3
million and $0.8 million
compared to the comparable periods in 2012. As expected, a modest
level of spread compression occurred during the current period,
with the net interest spread of 198 basis points on fixed annuity
assets decreasing 3 basis points sequentially and 13 basis points
compared to the prior year. However, that was more than offset by
the increase in fixed annuity assets under management, with the
resulting net interest margin increasing 2% year to date compared
to the first six months of 2012. The unlocking of deferred policy
acquisition costs in the quarter had a $1.0
million pretax negative impact on annuity segment earnings
compared to a $1.8 million negative
impact in the prior year, with the relative improvement primarily
due to financial market performance. For the six months ended
June 30, 2013 and 2012, the
respective evaluations each had a positive impact of less than
$1 million. Total annuity accumulated
account value of $5.0 billion
increased 10% compared to June 30,
2012, and total cash value persistency of 95.0% improved
slightly compared to a year earlier.
For the three and six months ended June
30, 2013, annuity deposits received of $98.4 million and $188.6
million increased slightly compared to the respective prior
year periods, primarily due to growth in single premium and
rollover deposit receipts in the current periods.
Annuity sales by Horace Mann's
agency force increased 5% compared to prior year in both the second
quarter and first half of 2013, while sales from the supplemental
independent agent distribution channel declined. In total,
Horace Mann's annuity sales for the
current quarter and six months were comparable to the prior
year.
Life Segment
Life segment net income of $5.6
million for the second quarter and $9.9 million for the six months decreased
$0.5 million and $1.4 million, respectively, compared to the same
periods in 2012, reflecting more normalized mortality losses as
well as slight decreases in investment income in the current
periods. Life persistency of 96% improved slightly compared to 12
months earlier.
Life segment insurance premiums and contract deposits of
$25.1 million and $48.1 million increased 3% and 1% compared to the
three and six months ended June 30,
2012, respectively.
New life sales continued to be strong compared to the prior
year, with a growth rate of approximately 30% for both the three
and six months in sales of Horace
Mann-manufactured products -- consistent with the company's
strategic intent to significantly increase its underwritten,
mortality-based business.
Investment Results
Total net investment income increased 1% and 2% compared to the
three and six months ended June 30,
2012, respectively. Pretax net realized investment gains
were $15.4 million in the current
quarter.
Horace Mann's net unrealized
investment gains on fixed maturity and equity securities of
$344.5 million at June 30, 2013 decreased 46% compared to the
$639.4 million net unrealized gain at
March 31, 2013, primarily due to the
increase in interest rates during the current quarter. Net
unrealized gains were $651.9 million
at December 31, 2012 and $548.7 million at June 30,
2012.
Capital Management
During the second quarter of 2013, the company repurchased
83,779 shares of its common stock at an aggregate cost of
$2.1 million, or an average price per
share of $24.35, under its
$50 million share repurchase program.
As of June 30, 2013, the program had
a remaining authorization of $28.4
million. There were 39,911,504 shares outstanding on
June 30, 2013.
Webcast Conference Call
Horace Mann's senior management
will discuss the company's second quarter financial results with
investors and analysts on July 25,
2013 at 9:30 a.m. Eastern
Time. The conference call will be webcast live on the
Internet at www.horacemann.com and archived later in the day for
replay, which will be available for one month.
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 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, 2013 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. The
information contained in this press release includes financial
measures which are based on methodologies other than United States generally accepted accounting
principles ("GAAP"). Reconciliations of non-GAAP measures to the
closest GAAP measures are contained in the supplemental numerical
pages of this release 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)
|
|
(Dollars in Millions,
Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
|
EARNINGS
SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 26.0
|
|
$ 13.1
|
|
98.5%
|
|
$ 53.0
|
|
$ 39.8
|
|
33.2%
|
|
Net realized
investment gains, after tax
|
10.0
|
|
6.4
|
|
56.3%
|
|
14.4
|
|
6.7
|
|
114.9%
|
|
Operating income
(A)
|
16.0
|
|
6.7
|
|
138.8%
|
|
38.6
|
|
33.1
|
|
16.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 0.63
|
|
$ 0.32
|
|
96.9%
|
|
$ 1.29
|
|
$ 0.96
|
|
34.4%
|
|
|
Net realized
investment gains, after tax
|
$ 0.24
|
|
$ 0.16
|
|
50.0%
|
|
$ 0.35
|
|
$ 0.16
|
|
118.8%
|
|
Operating income
(A)
|
$ 0.39
|
|
$ 0.16
|
|
143.8%
|
|
$ 0.94
|
|
$ 0.80
|
|
17.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
|
|
|
|
|
|
|
|
|
|
|
|
|
and equivalent shares
(in millions) - Diluted
|
41.4
|
|
41.3
|
|
0.2%
|
|
41.2
|
|
41.4
|
|
-0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
RETURN ON
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income return on
equity (B)
|
|
|
|
|
|
|
9.8%
|
|
9.2%
|
|
N.M.
|
|
Operating income
return on equity excluding the fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustment for
investments (A) (C)
|
|
|
|
|
|
|
10.7%
|
|
9.3%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
POSITION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
(D):
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value
|
|
|
|
|
|
|
$ 27.72
|
|
$ 29.06
|
|
-4.6%
|
|
|
Effect of the fair
value adjustment for investments (E)
|
|
|
|
|
|
|
$ 4.93
|
|
$ 8.51
|
|
-42.1%
|
|
Book value excluding
the fair value adjustment for investments (A)
|
|
|
|
|
|
|
$ 22.79
|
|
$ 20.55
|
|
10.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
$ 0.195
|
|
$ 0.13
|
|
50.0%
|
|
$ 0.39
|
|
$ 0.26
|
|
50.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending number of
shares outstanding (in millions) (D)
|
|
|
|
|
|
|
39.9
|
|
39.4
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
|
|
|
|
$ 8,355.8
|
|
$ 7,824.0
|
|
6.8%
|
|
Short-term
debt
|
|
|
|
|
|
|
38.0
|
|
38.0
|
|
-
|
|
Long-term
debt
|
|
|
|
|
|
|
199.8
|
|
199.8
|
|
-
|
|
Total shareholders'
equity
|
|
|
|
|
|
|
1,106.3
|
|
1,143.5
|
|
-3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exclusive agencies
(F)
|
|
|
|
|
|
|
615
|
|
557
|
|
10.4%
|
|
Employee agents
(G)
|
|
|
|
|
|
|
121
|
|
155
|
|
-21.9%
|
|
Total
|
|
|
|
|
|
|
|
736
|
|
712
|
|
3.4%
|
|
N.M. - Not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
|
These measures are
not based on accounting principles generally accepted in the United
States ("non-GAAP"). 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 SEC.
|
|
|
|
|
(B)
|
|
Based on trailing
12-month net income and average quarter-end shareholders'
equity.
|
|
|
|
|
|
|
|
|
|
(C)
|
|
Based on trailing
12-month operating income 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 the applicable deferred taxes.
|
|
|
|
(D)
|
|
Ending shares
outstanding were 39,911,504 at June 30, 2013 and 39,357,609 at June
30, 2012.
|
|
|
|
|
|
|
|
(E)
|
|
Net of the related
impact on deferred policy acquisition costs and the applicable
deferred taxes.
|
|
|
|
|
|
|
|
(F)
|
|
Local Horace Mann
agencies created and owned by independent contractors who have
signed Exclusive Agent agreements with the
|
|
|
|
|
|
Company ("Exclusive
Agents"). Those agreements state that only the Company's products
and limited additional third-party vendor
|
|
|
|
|
|
products authorized
by the Company will be marketed by the agencies. An independent
contractor may sign multiple Exclusive Agent
|
|
|
|
|
|
agreements with the
Company and manage more than one Exclusive Agency.
|
|
|
|
|
|
|
|
|
|
(G)
|
|
Agents who have
employee status with the Company and by contract market only the
Company's products and limited additional
|
|
|
|
|
|
third-party vendor
products authorized by the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 1 -
|
|
HORACE MANN
EDUCATORS CORPORATION
|
|
Statements of
Operations and Supplemental Consolidated Data
(Unaudited)
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
|
STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance premiums
and contract charges earned
|
$ 171.5
|
|
$ 166.3
|
|
3.1%
|
|
$ 340.7
|
|
$ 331.8
|
|
2.7%
|
|
Net investment
income
|
77.4
|
|
76.3
|
|
1.4%
|
|
154.8
|
|
152.0
|
|
1.8%
|
|
Net realized
investment gains
|
15.4
|
|
9.9
|
|
55.6%
|
|
22.3
|
|
10.3
|
|
116.5%
|
|
Other
income
|
1.3
|
|
1.6
|
|
-18.8%
|
|
2.4
|
|
4.7
|
|
-48.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
265.6
|
|
254.1
|
|
4.5%
|
|
520.2
|
|
498.8
|
|
4.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits, claims and
settlement expenses
|
120.8
|
|
131.0
|
|
-7.8%
|
|
233.5
|
|
238.9
|
|
-2.3%
|
|
Interest
credited
|
42.1
|
|
40.4
|
|
4.2%
|
|
83.5
|
|
80.4
|
|
3.9%
|
|
Policy acquisition
expenses amortized
|
23.0
|
|
22.3
|
|
3.1%
|
|
43.1
|
|
40.1
|
|
7.5%
|
|
Operating
expenses
|
39.0
|
|
38.5
|
|
1.3%
|
|
77.8
|
|
76.4
|
|
1.8%
|
|
Interest
expense
|
3.5
|
|
3.5
|
|
-
|
|
7.1
|
|
7.1
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefits,
losses and expenses
|
228.4
|
|
235.7
|
|
-3.1%
|
|
445.0
|
|
442.9
|
|
0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
37.2
|
|
18.4
|
|
102.2%
|
|
75.2
|
|
55.9
|
|
34.5%
|
|
Income tax
expense
|
11.2
|
|
5.3
|
|
111.3%
|
|
22.2
|
|
16.1
|
|
37.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 26.0
|
|
$ 13.1
|
|
98.5%
|
|
$ 53.0
|
|
$ 39.8
|
|
33.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PREMIUMS WRITTEN
AND CONTRACT DEPOSITS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile and
property (voluntary)
|
$ 143.1
|
|
$ 138.5
|
|
3.3%
|
|
$ 274.6
|
|
$ 265.7
|
|
3.3%
|
|
Involuntary and other
property & casualty
|
1.1
|
|
0.9
|
|
22.2%
|
|
1.5
|
|
1.4
|
|
7.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Property &
Casualty
|
144.2
|
|
139.4
|
|
3.4%
|
|
276.1
|
|
267.1
|
|
3.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity
deposits
|
98.4
|
|
96.4
|
|
2.1%
|
|
188.6
|
|
188.4
|
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
25.1
|
|
24.4
|
|
2.9%
|
|
48.1
|
|
47.5
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$ 267.7
|
|
$ 260.2
|
|
2.9%
|
|
$ 512.8
|
|
$ 503.0
|
|
1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT NET INCOME
(LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
$ 4.1
|
|
$ (4.1)
|
|
N.M.
|
|
$ 14.3
|
|
$ 9.1
|
|
57.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity
|
|
9.2
|
|
7.9
|
|
16.5%
|
|
20.3
|
|
19.5
|
|
4.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
5.6
|
|
6.1
|
|
-8.2%
|
|
9.9
|
|
11.3
|
|
-12.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other
(A)
|
7.1
|
|
3.2
|
|
121.9%
|
|
8.5
|
|
(0.1)
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
26.0
|
|
13.1
|
|
98.5%
|
|
53.0
|
|
39.8
|
|
33.2%
|
|
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 5.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 2 -
|
|
HORACE MANN
EDUCATORS CORPORATION
|
|
Supplemental Business
Segment Overview (Unaudited)
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
|
PROPERTY &
CASUALTY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums
written
|
$ 144.2
|
|
$ 139.4
|
|
3.4%
|
|
$ 276.1
|
|
$ 267.1
|
|
3.4%
|
|
Premiums
earned
|
139.5
|
|
135.6
|
|
2.9%
|
|
277.4
|
|
270.6
|
|
2.5%
|
|
Net investment
income
|
9.1
|
|
9.3
|
|
-2.2%
|
|
18.1
|
|
18.2
|
|
-0.5%
|
|
Other
income
|
-
|
|
-
|
|
-
|
|
-
|
|
1.6
|
|
-100.0%
|
|
Losses and loss
adjustment expenses (LAE)
|
106.1
|
|
116.5
|
|
-8.9%
|
|
202.5
|
|
209.7
|
|
-3.4%
|
|
Operating expenses
(includes policy
|
|
|
|
|
|
|
|
|
|
|
|
|
acquisition expenses
amortized)
|
38.0
|
|
36.4
|
|
4.4%
|
|
75.7
|
|
71.5
|
|
5.9%
|
|
Income (loss) before
tax
|
4.5
|
|
(8.0)
|
|
N.M.
|
|
17.3
|
|
9.2
|
|
88.0%
|
|
Net income
(loss)
|
4.1
|
|
(4.1)
|
|
N.M.
|
|
14.3
|
|
9.1
|
|
57.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income, after tax
|
7.7
|
|
8.0
|
|
-3.7%
|
|
15.3
|
|
15.5
|
|
-1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs
(A)
|
|
|
|
|
|
|
|
|
|
|
|
|
After tax
|
14.6
|
|
19.0
|
|
-23.2%
|
|
18.3
|
|
22.8
|
|
-19.7%
|
|
Before tax
|
22.5
|
|
29.2
|
|
-22.9%
|
|
28.2
|
|
35.1
|
|
-19.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior years' reserves
favorable (adverse)
|
|
|
|
|
|
|
|
|
|
|
|
|
development, before
tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
automobile
|
2.6
|
|
3.4
|
|
-23.5%
|
|
5.9
|
|
6.7
|
|
-11.9%
|
|
|
Total
property
|
-
|
|
1.1
|
|
-100.0%
|
|
-
|
|
1.8
|
|
-100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
2.6
|
|
4.5
|
|
-42.2%
|
|
5.9
|
|
8.5
|
|
-30.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expense ratio
|
76.1%
|
|
85.9%
|
|
N.M.
|
|
73.0%
|
|
77.5%
|
|
N.M.
|
|
Expense
ratio
|
27.2%
|
|
26.9%
|
|
N.M.
|
|
27.3%
|
|
26.4%
|
|
N.M.
|
|
Combined
ratio
|
103.3%
|
|
112.8%
|
|
N.M.
|
|
100.3%
|
|
103.9%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on the
combined ratio of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs
(A)
|
16.1%
|
|
21.5%
|
|
N.M.
|
|
10.2%
|
|
12.9%
|
|
N.M.
|
|
|
|
Prior years' reserve
development
|
-1.8%
|
|
-3.3%
|
|
N.M.
|
|
-2.2%
|
|
-3.0%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio
excluding the effects of catastrophe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
costs and prior
years' reserve development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
("underlying combined
ratio") (B)
|
89.0%
|
|
94.6%
|
|
N.M.
|
|
92.3%
|
|
94.0%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policies in force
(voluntary) (in thousands)
|
|
|
|
|
|
|
721
|
|
723
|
|
-0.3%
|
|
Automobile
|
|
|
|
|
|
|
484
|
|
485
|
|
-0.2%
|
|
Property
|
|
|
|
|
|
|
237
|
|
238
|
|
-0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy renewal rate
(voluntary) - 12 months
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile
|
|
|
|
|
|
|
85.1%
|
|
83.7%
|
|
N.M.
|
|
Property
|
|
|
|
|
|
|
89.5%
|
|
88.6%
|
|
N.M.
|
|
N.M. - Not
meaningful.
|
|
(A)
|
|
Includes allocated
loss adjustment expenses and, when applicable, catastrophe
reinsurance reinstatement premiums.
|
|
|
|
For the periods
presented, there were no reinsurance reinstatement
premiums.
|
|
(B)
|
|
These measures are
not based on accounting principles generally accepted in the United
States ("non-GAAP").
|
|
|
|
See footnote (A) on
page 1 of these supplemental numerical pages.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 3 -
|
|
HORACE MANN
EDUCATORS CORPORATION
|
|
Supplemental Business
Segment Overview (Unaudited)
|
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
|
ANNUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
deposits
|
$ 98.4
|
|
$ 96.4
|
|
2.1%
|
|
$ 188.6
|
|
$ 188.4
|
|
0.1%
|
|
Variable
|
35.3
|
|
30.1
|
|
17.3%
|
|
65.6
|
|
57.3
|
|
14.5%
|
|
Fixed
|
63.1
|
|
66.3
|
|
-4.8%
|
|
123.0
|
|
131.1
|
|
-6.2%
|
|
Contract charges
earned
|
5.7
|
|
5.5
|
|
3.6%
|
|
10.8
|
|
10.5
|
|
2.9%
|
|
Net investment
income
|
51.4
|
|
49.8
|
|
3.2%
|
|
102.7
|
|
99.3
|
|
3.4%
|
|
Interest
credited
|
31.4
|
|
29.9
|
|
5.0%
|
|
62.1
|
|
59.5
|
|
4.4%
|
|
Net interest margin
(without realized investment gains/losses)
|
20.0
|
|
19.9
|
|
0.5%
|
|
40.6
|
|
39.8
|
|
2.0%
|
|
Other
income
|
1.0
|
|
0.8
|
|
25.0%
|
|
1.7
|
|
1.5
|
|
13.3%
|
|
Mortality loss and
other reserve changes
|
(0.7)
|
|
(1.3)
|
|
-46.2%
|
|
(1.0)
|
|
(1.1)
|
|
-9.1%
|
|
Operating expenses
(includes policy
|
|
|
|
|
|
|
|
|
|
|
|
|
acquisition expenses
amortized)
|
12.4
|
|
13.1
|
|
-5.3%
|
|
22.0
|
|
21.6
|
|
1.9%
|
|
Income before
tax
|
13.6
|
|
11.8
|
|
15.3%
|
|
30.1
|
|
29.1
|
|
3.4%
|
|
Net income
|
9.2
|
|
7.9
|
|
16.5%
|
|
20.3
|
|
19.5
|
|
4.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income
increase (decrease) due to
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluation
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred policy
acquisition costs
|
$ (1.0)
|
|
$ (1.8)
|
|
-44.4%
|
|
$ 0.6
|
|
$ 0.8
|
|
-25.0%
|
|
|
Guaranteed minimum
death benefit reserve
|
-
|
|
(0.1)
|
|
-100.0%
|
|
0.1
|
|
0.1
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity contracts in
force (in thousands)
|
|
|
|
|
|
|
191
|
|
186
|
|
2.7%
|
|
Accumulated value on
deposit / Assets under management
|
|
|
|
|
|
|
$ 4,997.2
|
|
$ 4,536.1
|
|
10.2%
|
|
Variable
|
|
|
|
|
|
|
1,525.5
|
|
1,348.1
|
|
13.2%
|
|
Fixed
|
|
|
|
|
|
|
3,471.7
|
|
3,188.0
|
|
8.9%
|
|
Annuity accumulated
value retention - 12 months
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable
accumulations
|
|
|
|
|
|
|
94.1%
|
|
94.0%
|
|
N.M.
|
|
Fixed
accumulations
|
|
|
|
|
|
|
95.4%
|
|
95.1%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums and contract
deposits
|
$ 25.1
|
|
$ 24.4
|
|
2.9%
|
|
$ 48.1
|
|
$ 47.5
|
|
1.3%
|
|
Premiums and contract
charges earned
|
26.3
|
|
25.2
|
|
4.4%
|
|
52.5
|
|
50.7
|
|
3.6%
|
|
Net investment
income
|
17.2
|
|
17.5
|
|
-1.7%
|
|
34.5
|
|
35.0
|
|
-1.4%
|
|
Other
income
|
0.3
|
|
0.8
|
|
-62.5%
|
|
0.7
|
|
1.6
|
|
-56.3%
|
|
Death
benefits/mortality cost/change in reserves
|
14.0
|
|
13.2
|
|
6.1%
|
|
30.0
|
|
28.1
|
|
6.8%
|
|
Interest
credited
|
10.7
|
|
10.5
|
|
1.9%
|
|
21.4
|
|
20.9
|
|
2.4%
|
|
Operating expenses
(includes policy
|
|
|
|
|
|
|
|
|
|
|
|
|
acquisition expenses
amortized)
|
10.5
|
|
10.2
|
|
2.9%
|
|
20.9
|
|
20.6
|
|
1.5%
|
|
Income before
tax
|
8.6
|
|
9.6
|
|
-10.4%
|
|
15.4
|
|
17.7
|
|
-13.0%
|
|
Net income
|
5.6
|
|
6.1
|
|
-8.2%
|
|
9.9
|
|
11.3
|
|
-12.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income
increase (decrease) due to
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluation
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred policy
acquisition costs
|
$ (0.1)
|
|
$ (0.1)
|
|
-
|
|
$ (0.1)
|
|
$ (0.2)
|
|
-50.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life policies in
force (in thousands)
|
|
|
|
|
|
|
200
|
|
202
|
|
-1.0%
|
|
Life insurance in
force
|
|
|
|
|
|
|
$ 14,837
|
|
$ 14,353
|
|
3.4%
|
|
Lapse ratio - 12
months
|
|
|
|
|
|
|
|
|
|
|
|
|
(Ordinary life
insurance)
|
|
|
|
|
|
|
4.4%
|
|
4.5%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE AND
OTHER (A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of income
(loss) before tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
investment gains
|
$ 15.4
|
|
$ 9.9
|
|
55.6%
|
|
$ 22.3
|
|
$ 10.3
|
|
116.5%
|
|
Interest
expense
|
(3.5)
|
|
(3.5)
|
|
-
|
|
(7.1)
|
|
(7.1)
|
|
-
|
|
Other operating
expenses, net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and other
income
|
(1.4)
|
|
(1.4)
|
|
-
|
|
(2.8)
|
|
(3.3)
|
|
-15.2%
|
|
Income (loss) before
tax
|
10.5
|
|
5.0
|
|
110.0%
|
|
12.4
|
|
(0.1)
|
|
N.M.
|
|
Net income
(loss)
|
7.1
|
|
3.2
|
|
121.9%
|
|
8.5
|
|
(0.1)
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
|
|
|
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
|
INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity and
Life
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at
fair value (amortized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cost 2013, $4,815.9;
2012, $4,363.7)
|
|
|
|
|
|
|
$ 5,136.6
|
|
$ 4,854.8
|
|
5.8%
|
|
Equity securities, at
fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(cost 2013, $30.4;
2012, $7.7)
|
|
|
|
|
|
|
29.4
|
|
7.6
|
|
N.M.
|
|
Short-term
investments
|
|
|
|
|
|
|
49.1
|
|
13.1
|
|
N.M.
|
|
Short-term
investments, securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
lending
collateral
|
|
|
|
|
|
|
-
|
|
-
|
|
-
|
|
Policy
loans
|
|
|
|
|
|
|
136.7
|
|
131.1
|
|
4.3%
|
|
Other
investments
|
|
|
|
|
|
|
54.9
|
|
52.3
|
|
5.0%
|
|
|
|
Total Annuity and
Life investments
|
|
|
|
|
|
|
5,406.7
|
|
5,058.9
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at
fair value (amortized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cost 2013, $775.2;
2012, $783.1)
|
|
|
|
|
|
|
794.0
|
|
839.9
|
|
-5.5%
|
|
Equity securities, at
fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(cost 2013, $47.6;
2012, $29.5)
|
|
|
|
|
|
|
53.6
|
|
30.4
|
|
76.3%
|
|
Short-term
investments
|
|
|
|
|
|
|
7.4
|
|
9.0
|
|
-17.8%
|
|
Short-term
investments, securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
lending
collateral
|
|
|
|
|
|
|
-
|
|
-
|
|
-
|
|
Other
investments
|
|
|
|
|
|
|
10.0
|
|
-
|
|
N.M.
|
|
|
|
Total Property &
Casualty investments
|
|
|
|
|
|
|
865.0
|
|
879.3
|
|
-1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
investments
|
|
|
|
|
|
|
25.6
|
|
11.4
|
|
124.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
investments
|
|
|
|
|
|
|
6,297.3
|
|
5,949.6
|
|
5.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
|
|
|
|
|
|
|
|
|
|
|
Before tax
|
$ 77.4
|
|
$ 76.3
|
|
1.4%
|
|
$ 154.8
|
|
$ 152.0
|
|
1.8%
|
|
After tax
|
52.1
|
|
51.4
|
|
1.4%
|
|
104.2
|
|
102.4
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
investment gains
|
|
|
|
|
|
|
|
|
|
|
|
|
Before tax
|
$ 15.4
|
|
$ 9.9
|
|
55.6%
|
|
$ 22.3
|
|
$ 10.3
|
|
116.5%
|
|
After tax
|
10.0
|
|
6.4
|
|
56.3%
|
|
14.4
|
|
6.7
|
|
114.9%
|
|
|
Per share,
diluted
|
$ 0.24
|
|
$ 0.16
|
|
50.0%
|
|
$ 0.35
|
|
$ 0.16
|
|
118.8%
|
|
N.M. - Not
meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 5 -
|
SOURCE Horace Mann Educators Corporation