SPRINGFIELD, Ill., Feb. 9, 2015 /PRNewswire/ -- Horace Mann
Educators Corporation (NYSE: HMN) today reported financial results
for the three and twelve months ended December 31, 2014:
Horace Mann Financial
Highlights
|
|
Three months
ended
December
31,
|
|
Twelve months
ended
December
31,
|
($ in millions,
except per share
amounts)
|
2014
|
2013
|
Change
|
|
2014
|
2013
|
Change
|
Total
revenues
|
$269.1
|
$259.1
|
3.9%
|
|
$1,060.7
|
$1,031.2
|
2.9%
|
Net income
|
30.0
|
34.3
|
-12.5%
|
|
104.2
|
110.9
|
-6.0%
|
Net income per
diluted share
|
0.71
|
0.81
|
-12.3%
|
|
2.47
|
2.66
|
-7.1%
|
Operating
income*
|
28.7
|
33.4
|
-14.1%
|
|
97.3
|
96.5
|
0.8%
|
Operating income
per
diluted share*
|
0.68
|
0.79
|
-13.9%
|
|
2.30
|
2.32
|
-0.9%
|
Book value per
share
|
|
|
|
|
32.65
|
27.14
|
20.3%
|
Book value per share
excluding the fair value
adjustment for
investments*
|
|
|
|
|
25.38
|
23.83
|
6.5%
|
Property and Casualty
segment
net
income
|
16.2
|
19.0
|
-14.7%
|
|
46.9
|
44.4
|
5.6%
|
Property and
Casualty
combined ratio
|
91.9%
|
87.4%
|
4.5 pts
|
|
96.1%
|
96.3%
|
-0.2 pts
|
Property and
Casualty
underlying combined ratio*
|
94.4%
|
91.0%
|
3.4 pts
|
|
92.5%
|
92.4%
|
0.1 pts
|
Annuity segment net
income
|
$ 11.2
|
$ 12.8
|
-12.5%
|
|
$ 45.3
|
$ 44.7
|
1.3%
|
Life segment net
income
|
4.7
|
4.7
|
0.0%
|
|
17.5
|
20.4
|
-14.2%
|
* 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.
|
"Including fourth quarter operating income of $0.68 per diluted share, Horace Mann's full year operating income was
$2.30 per diluted share, reflecting
another year of strong performance across all three segments of our
multiline insurance platform. Sales in the fourth quarter
were strong, with double-digit increases in all three of our
segments," said Horace Mann's
President and CEO Marita
Zuraitis. "The full year property and casualty
combined ratio of 96.1% reflected a decreased level of catastrophe
losses and continued improvement in auto underlying results,
partially offset by a higher level of non-catastrophe losses in
property. Excluding unlocking, net income in the annuity
segment increased 9% for the year, primarily due to growth in
assets under management as well as proactive actions to maintain
favorable net interest spreads. For the life segment, net
income decreased primarily due to a more normal level of mortality
losses, compared to the favorable experience for full year
2013. Annuity sales continued to be strong, up over 20% for
the quarter and full year, led by sales of the new fixed indexed
annuity product. Sales of our life products with recurring
premiums increased 50% for the quarter and 30% on a full year
basis. And, auto sales increased 13% and 6% for the quarter
and full year, respectively."
"We are projecting full-year 2015 operating income of between
$2.15 and $2.35 per diluted share,"
stated Zuraitis. "This estimate anticipates continued
improvement in our underlying property and casualty combined ratio,
somewhat offset by a lower amount of favorable prior years' reserve
development, investment interest rate pressure and continued
strategic investments in our operations."
Property and Casualty Segment
For the full year, property and casualty net income of
$46.9 million increased $2.5 million compared to 2013. The combined
ratio of 96.1% improved 0.2 percentage point and the underlying
combined ratio was comparable to full year 2013, primarily
reflecting improvement in the underlying auto loss ratio.
This improvement was offset somewhat by a higher underlying
property loss ratio, resulting from a recent trend of more severe
non-catastrophe weather. Both catastrophe losses and
favorable prior years' reserve development were slightly lower than
the 2013 amounts. On an underlying basis, the full year auto
combined ratio of 101.0% improved 1.1 points, reflecting
improvement in the loss ratio. For property, the underlying
combined ratio of 76.5% was 3.5 percentage points higher than the
prior year, reflecting the aforementioned trend of more severe
non-catastrophe weather. The full year total property and
casualty expense ratio of 27.4% was comparable to the prior
year.
For the fourth quarter of 2014, property and casualty net income
of $16.2 million declined 15%
compared to the prior year. The current quarter total
property and casualty combined ratio of 91.9% increased 4.5 points
compared to the prior year, reflecting the impact of elevated
seasonal loss experience in auto and lower favorable prior years'
reserve development somewhat offset by a reduction in catastrophe
losses. On an underlying basis, the fourth quarter auto
combined ratio of 107.5% increased 3.3 points compared to a year
earlier. For property, the underlying combined ratio was
70.5% for the current quarter, an increase of 4.7 points compared
to a year earlier.
Total property and casualty written premiums of $144.4 million and $584.4
million each increased 2% compared to the three and twelve
months ended December 31, 2013,
respectively. The growth was driven by increases in average
premium per policy for both auto and property accompanied by
reductions in catastrophe reinsurance costs.
Total property and casualty sales increased 11% and 3% compared
to the fourth quarter and twelve months ended December 31, 2013, respectively. Auto sales
increased 13% and 6% compared to the fourth quarter and full year
2013, respectively, while property sales increased 5% for the
fourth quarter and decreased 6% for the full year. Policy
retention continues to be strong with auto and property policy
retention rates for the current year at 85% and 88%,
respectively.
Annuity Segment
Annuity segment net income increased $0.6
million to $45.3 million for
the full year, and decreased $1.6
million to $11.2 million
compared to the prior year fourth quarter. These 2014 results
included $1.2 million of negative
pretax unlocking for the twelve months and $0.3 million of negative pretax unlocking for the
fourth quarter, compared to positive unlocking of $3.7 million and $1.8
million in the respective prior year periods.
For the full year 2014, the net interest spread of 201 basis
points on fixed annuity assets reflected continued solid investment
portfolio performance and proactive crediting rate management,
which contributed to a 10% increase in the net interest margin
compared to 2013. Total annuity assets under management of
$5.7 billion increased 6% compared to
December 31, 2013, and total cash
value persistency remained strong at approximately 94%.
For the three and twelve months ended December 31, 2014, annuity deposits of
$118.9 million and $480.6 million increased 12% and 14%,
respectively, compared to the prior year periods, primarily due to
an increase in the amount of single premium and rollover deposits
received in the current periods, with recurring deposit receipts
also exceeding the prior year amounts.
In 2014, Horace Mann's total
annuity sales for the fourth quarter and full year increased over
20%, led by sales of the company's new fixed indexed annuity
product. Annuity sales by the company's agency force
increased approximately 30% compared to the three and twelve months
ended December 31, 2013,
respectively, while annuity sales from the independent agent
distribution channel, which currently produces about 10% of total
annuity sales, decreased 30% and 8% compared to the same
periods.
Life Segment
Life segment net income of $17.5
million for the full year decreased $2.9 million compared to 2013, primarily
attributable to a more normal level of mortality losses --
consistent with actuarial models -- in the current year, compared
to the favorable experience in 2013. Net income of
$4.7 million for the fourth quarter
was equal to the prior year period, including a current period
favorable variance in the level of mortality losses.
In 2014, life segment insurance premiums and contract deposits
of $29.0 million and $102.7 million for the fourth quarter and full
year, respectively, increased 6% and 2% compared to the same
periods in 2013. Life persistency of 96% was comparable to 12
months earlier. For the full year, life sales of $11.1 million increased 31% compared to 2013,
including notable growth in the fourth quarter.
Investment Results
Total net investment income increased 3% and 5% compared to the
three and twelve months ended December 31,
2013, respectively, reflecting higher asset balances in the
annuity segment, as well as continued strong performance in the
fixed maturity and alternative investment portfolios. Pretax
net realized investment gains were $2.2
million and $10.9 million in
the current quarter and twelve months, respectively.
Horace Mann's net unrealized
investment gains on fixed maturity and equity securities were
$528.6 million at December 31, 2014, compared to $479.5 million of net unrealized gains at
September 30, 2014. Net
unrealized gains were $232.5 million
at December 31, 2013.
Webcast Conference Call
Horace Mann's senior management
will discuss the company's fourth quarter financial results with
investors and analysts on February 10,
2015 at 9:30 a.m. Eastern
Time. The conference call will be webcast live on the
Internet at investors.horacemann.com and archived later in the day
for replay.
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 September 30, 2014 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
|
|
|
|
Year Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
|
EARNINGS
SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 30.0
|
|
$ 34.3
|
|
-12.5%
|
|
$ 104.2
|
|
$ 110.9
|
|
-6.0%
|
Net realized
investment gains, after tax
|
1.3
|
|
0.9
|
|
44.4%
|
|
6.9
|
|
14.4
|
|
-52.1%
|
Operating income
(A)
|
28.7
|
|
33.4
|
|
-14.1%
|
|
97.3
|
|
96.5
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted
share:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 0.71
|
|
$ 0.81
|
|
-12.3%
|
|
$ 2.47
|
|
$ 2.66
|
|
-7.1%
|
Net realized
investment gains, after tax
|
$ 0.03
|
|
$ 0.02
|
|
50.0%
|
|
$ 0.17
|
|
$ 0.34
|
|
-50.0%
|
Operating income
(A)
|
$ 0.68
|
|
$ 0.79
|
|
-13.9%
|
|
$ 2.30
|
|
$ 2.32
|
|
-0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
|
|
|
|
|
|
|
|
|
|
|
|
and equivalent shares
(in millions) - Diluted
|
42.4
|
|
42.2
|
|
0.5%
|
|
42.2
|
|
41.6
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RETURN ON
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income return on
equity (B)
|
|
|
|
|
|
|
8.4%
|
|
9.6%
|
|
N.M.
|
Operating income
return on equity excluding the fair value
|
|
|
|
|
|
|
|
|
|
|
|
adjustment for
investments (A) (C)
|
|
|
|
|
|
|
9.7%
|
|
10.6%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
POSITION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
(D):
|
|
|
|
|
|
|
|
|
|
|
|
Book value
|
|
|
|
|
|
|
$ 32.65
|
|
$ 27.14
|
|
20.3%
|
Effect of the fair
value adjustment for investments (E)
|
|
|
|
|
|
|
$ 7.27
|
|
$ 3.31
|
|
119.6%
|
Book value excluding
the fair value adjustment for investments (A)
|
|
|
|
|
|
|
$ 25.38
|
|
$ 23.83
|
|
6.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
$ 0.230
|
|
$ 0.195
|
|
17.9%
|
|
$ 0.92
|
|
$ 0.78
|
|
17.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending number of
shares outstanding (in millions) (D)
|
|
|
|
|
|
|
40.9
|
|
40.5
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
|
|
|
|
$ 9,768.5
|
|
$ 8,826.7
|
|
10.7%
|
Short-term
debt
|
|
|
|
|
|
|
38.0
|
|
38.0
|
|
-
|
Long-term debt,
current and noncurrent
|
|
|
|
|
|
|
199.9
|
|
199.9
|
|
-
|
Total shareholders'
equity
|
|
|
|
|
|
|
1,336.5
|
|
1,099.3
|
|
21.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exclusive agencies
(F)
|
|
|
|
|
|
|
682
|
|
654
|
|
4.3%
|
Employee agents
(G)
|
|
|
|
|
|
|
73
|
|
105
|
|
-30.5%
|
Total
|
|
|
|
|
|
|
755
|
|
759
|
|
-0.5%
|
|
|
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 40,936,618 at December 31, 2014 and 40,511,551 at
December 31, 2013.
|
(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
|
|
|
|
Year Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
|
STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance premiums
and contract charges earned
|
$ 182.2
|
|
$ 176.4
|
|
3.3%
|
|
$ 715.8
|
|
$ 690.9
|
|
3.6%
|
Net investment
income
|
82.8
|
|
80.4
|
|
3.0%
|
|
329.8
|
|
313.6
|
|
5.2%
|
Net realized
investment gains
|
2.2
|
|
1.3
|
|
69.2%
|
|
10.9
|
|
22.2
|
|
-50.9%
|
Other
income
|
1.9
|
|
1.0
|
|
90.0%
|
|
4.2
|
|
4.5
|
|
-6.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
269.1
|
|
259.1
|
|
3.9%
|
|
1,060.7
|
|
1,031.2
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits, claims and
settlement expenses
|
111.8
|
|
102.1
|
|
9.5%
|
|
468.4
|
|
448.3
|
|
4.5%
|
Interest
credited
|
44.8
|
|
43.5
|
|
3.0%
|
|
176.1
|
|
169.9
|
|
3.6%
|
Policy acquisition
expenses amortized
|
23.8
|
|
20.6
|
|
15.5%
|
|
93.8
|
|
84.6
|
|
10.9%
|
Operating
expenses
|
43.0
|
|
40.9
|
|
5.1%
|
|
162.1
|
|
160.1
|
|
1.2%
|
Interest
expense
|
3.6
|
|
3.5
|
|
2.9%
|
|
14.2
|
|
14.2
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefits, losses
and expenses
|
227.0
|
|
210.6
|
|
7.8%
|
|
914.6
|
|
877.1
|
|
4.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
42.1
|
|
48.5
|
|
-13.2%
|
|
146.1
|
|
154.1
|
|
-5.2%
|
Income tax
expense
|
12.1
|
|
14.2
|
|
-14.8%
|
|
41.9
|
|
43.2
|
|
-3.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 30.0
|
|
$ 34.3
|
|
-12.5%
|
|
$ 104.2
|
|
$ 110.9
|
|
-6.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PREMIUMS WRITTEN
AND CONTRACT DEPOSITS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
$ 144.4
|
|
$ 141.8
|
|
1.8%
|
|
$ 584.4
|
|
$ 570.4
|
|
2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity
deposits
|
118.9
|
|
106.2
|
|
12.0%
|
|
480.6
|
|
423.0
|
|
13.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
|
29.0
|
|
27.4
|
|
5.8%
|
|
102.7
|
|
100.8
|
|
1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$ 292.3
|
|
$ 275.4
|
|
6.1%
|
|
$ 1,167.7
|
|
$ 1,094.2
|
|
6.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT NET INCOME
(LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
$ 16.2
|
|
$ 19.0
|
|
-14.7%
|
|
$ 46.9
|
|
$ 44.4
|
|
5.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity
|
11.2
|
|
12.8
|
|
-12.5%
|
|
45.3
|
|
44.7
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
|
4.7
|
|
4.7
|
|
-
|
|
17.5
|
|
20.4
|
|
-14.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other
(A)
|
(2.1)
|
|
(2.2)
|
|
-4.5%
|
|
(5.5)
|
|
1.4
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 30.0
|
|
$ 34.3
|
|
-12.5%
|
|
$ 104.2
|
|
$ 110.9
|
|
-6.0%
|
|
|
|
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.
|
|
|
- 2 -
|
HORACE MANN
EDUCATORS CORPORATION
|
Supplemental Business
Segment Overview (Unaudited)
|
(Dollars in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Year Ended
|
|
|
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
|
PROPERTY &
CASUALTY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums
written
|
$ 144.4
|
|
$ 141.8
|
|
1.8%
|
|
$ 584.4
|
|
$ 570.4
|
|
2.5%
|
Premiums
earned
|
147.7
|
|
143.7
|
|
2.8%
|
|
581.8
|
|
561.9
|
|
3.5%
|
Net investment
income
|
9.2
|
|
9.3
|
|
-1.1%
|
|
36.8
|
|
36.2
|
|
1.7%
|
Other
income
|
1.2
|
|
-
|
|
N.M.
|
|
1.4
|
|
0.2
|
|
N.M.
|
Losses and loss
adjustment expenses (LAE)
|
94.7
|
|
85.5
|
|
10.8%
|
|
399.5
|
|
385.6
|
|
3.6%
|
Operating expenses
(includes policy
|
|
|
|
|
|
|
|
|
|
|
|
|
acquisition expenses
amortized)
|
41.2
|
|
40.0
|
|
3.0%
|
|
159.7
|
|
155.5
|
|
2.7%
|
Income before
tax
|
22.2
|
|
27.5
|
|
-19.3%
|
|
60.8
|
|
57.2
|
|
6.3%
|
Net income
|
16.2
|
|
19.0
|
|
-14.7%
|
|
46.9
|
|
44.4
|
|
5.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income, after tax
|
7.7
|
|
7.7
|
|
-
|
|
30.9
|
|
30.5
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs
(A)
|
|
|
|
|
|
|
|
|
|
|
|
|
After tax
|
1.3
|
|
1.9
|
|
-31.6%
|
|
24.4
|
|
26.1
|
|
-6.5%
|
|
Before tax
|
2.0
|
|
2.9
|
|
-31.0%
|
|
37.5
|
|
40.2
|
|
-6.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior years' reserves
favorable (adverse)
|
|
|
|
|
|
|
|
|
|
|
|
|
development, before
tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile
|
2.7
|
|
7.5
|
|
-64.0%
|
|
13.2
|
|
17.2
|
|
-23.3%
|
|
|
Property
|
2.2
|
|
0.6
|
|
266.7%
|
|
2.2
|
|
0.8
|
|
175.0%
|
|
|
Other property and
casualty
|
0.7
|
|
-
|
|
N.M.
|
|
1.6
|
|
-
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
5.6
|
|
8.1
|
|
-30.9%
|
|
17.0
|
|
18.0
|
|
-5.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expense ratio
|
64.1%
|
|
59.5%
|
|
N.M.
|
|
68.7%
|
|
68.6%
|
|
N.M.
|
|
Expense
ratio
|
27.8%
|
|
27.9%
|
|
N.M.
|
|
27.4%
|
|
27.7%
|
|
N.M.
|
|
Combined
ratio
|
91.9%
|
|
87.4%
|
|
N.M.
|
|
96.1%
|
|
96.3%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on the
combined ratio of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe costs
(A)
|
1.3%
|
|
2.1%
|
|
N.M.
|
|
6.5%
|
|
7.2%
|
|
N.M.
|
|
|
|
Prior years' reserve
development
|
-3.8%
|
|
-5.7%
|
|
N.M.
|
|
-2.9%
|
|
-3.3%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio
excluding the effects of catastrophe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
costs and prior
years' reserve development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
("underlying combined
ratio") (B)
|
94.4%
|
|
91.0%
|
|
N.M.
|
|
92.5%
|
|
92.4%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policies in force
(voluntary) (in thousands)
|
|
|
|
|
|
|
710
|
|
717
|
|
-1.0%
|
|
Automobile
|
|
|
|
|
|
|
481
|
|
482
|
|
-0.2%
|
|
Property
|
|
|
|
|
|
|
229
|
|
235
|
|
-2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy renewal rate
(voluntary) - 12 months
|
|
|
|
|
|
|
|
|
|
|
|
|
Automobile
|
|
|
|
|
|
|
84.7%
|
|
84.8%
|
|
N.M.
|
|
Property
|
|
|
|
|
|
|
87.9%
|
|
89.0%
|
|
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)
|
This measure is 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
|
|
|
|
Year Ended
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
|
ANNUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
deposits
|
$ 118.9
|
|
$ 106.2
|
|
12.0%
|
|
$ 480.6
|
|
$ 423.0
|
|
13.6%
|
Variable
|
38.2
|
|
34.6
|
|
10.4%
|
|
140.6
|
|
131.7
|
|
6.8%
|
Fixed
|
80.7
|
|
71.6
|
|
12.7%
|
|
340.0
|
|
291.3
|
|
16.7%
|
Contract charges
earned
|
6.6
|
|
5.9
|
|
11.9%
|
|
25.6
|
|
22.6
|
|
13.3%
|
Net investment
income
|
55.9
|
|
53.6
|
|
4.3%
|
|
222.1
|
|
208.4
|
|
6.6%
|
Interest
credited
|
33.8
|
|
32.7
|
|
3.4%
|
|
132.5
|
|
127.0
|
|
4.3%
|
Net interest margin
(without realized investment gains/losses)
|
22.1
|
|
20.9
|
|
5.7%
|
|
89.6
|
|
81.4
|
|
10.1%
|
Other
income
|
0.5
|
|
0.7
|
|
-28.6%
|
|
1.8
|
|
3.0
|
|
-40.0%
|
Mortality loss and
other reserve changes
|
(0.5)
|
|
(0.4)
|
|
25.0%
|
|
(2.2)
|
|
(1.8)
|
|
22.2%
|
Operating expenses
(includes policy
|
|
|
|
|
|
|
|
|
|
|
|
acquisition expenses
amortized)
|
12.7
|
|
9.8
|
|
29.6%
|
|
48.1
|
|
42.0
|
|
14.5%
|
Income before
tax
|
16.0
|
|
17.3
|
|
-7.5%
|
|
66.7
|
|
63.2
|
|
5.5%
|
Net income
|
11.2
|
|
12.8
|
|
-12.5%
|
|
45.3
|
|
44.7
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income
increase (decrease) due to
|
|
|
|
|
|
|
|
|
|
|
|
evaluation
of:
|
|
|
|
|
|
|
|
|
|
|
|
Deferred policy
acquisition costs
|
$ (0.3)
|
|
$ 1.8
|
|
N.M.
|
|
$ (1.2)
|
|
$ 3.7
|
|
N.M.
|
Guaranteed minimum
death benefit reserve
|
-
|
|
0.1
|
|
-100.0%
|
|
(0.1)
|
|
0.2
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity contracts in
force (in thousands)
|
|
|
|
|
|
|
203
|
|
195
|
|
4.1%
|
Accumulated account
value on deposit / Assets under management
|
|
|
|
|
|
|
$ 5,698.7
|
|
$ 5,365.2
|
|
6.2%
|
Variable
|
|
|
|
|
|
|
1,813.6
|
|
1,748.0
|
|
3.8%
|
Fixed
|
|
|
|
|
|
|
3,885.1
|
|
3,617.2
|
|
7.4%
|
Annuity accumulated
value retention - 12 months
|
|
|
|
|
|
|
|
|
|
|
|
Variable
accumulations
|
|
|
|
|
|
|
94.0%
|
|
94.0%
|
|
N.M.
|
Fixed
accumulations
|
|
|
|
|
|
|
94.5%
|
|
95.2%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums and contract
deposits
|
$ 29.0
|
|
$ 27.4
|
|
5.8%
|
|
$ 102.7
|
|
$ 100.8
|
|
1.9%
|
Premiums and contract
charges earned
|
27.9
|
|
26.8
|
|
4.1%
|
|
108.4
|
|
106.4
|
|
1.9%
|
Net investment
income
|
17.9
|
|
17.7
|
|
1.1%
|
|
71.8
|
|
69.9
|
|
2.7%
|
Other
income
|
0.3
|
|
0.3
|
|
-
|
|
1.1
|
|
1.3
|
|
-15.4%
|
Death
benefits/mortality cost/change in reserves
|
16.6
|
|
16.2
|
|
2.5%
|
|
66.7
|
|
60.9
|
|
9.5%
|
Interest
credited
|
11.0
|
|
10.8
|
|
1.9%
|
|
43.6
|
|
42.9
|
|
1.6%
|
Operating expenses
(includes policy
|
|
|
|
|
|
|
|
|
|
|
|
acquisition expenses
amortized)
|
11.4
|
|
10.8
|
|
5.6%
|
|
44.1
|
|
42.5
|
|
3.8%
|
Income before
tax
|
7.1
|
|
7.0
|
|
1.4%
|
|
26.9
|
|
31.3
|
|
-14.1%
|
Net income
|
4.7
|
|
4.7
|
|
-
|
|
17.5
|
|
20.4
|
|
-14.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income
increase (decrease) due to
|
|
|
|
|
|
|
|
|
|
|
|
evaluation
of:
|
|
|
|
|
|
|
|
|
|
|
|
Deferred policy
acquisition costs
|
$ 0.1
|
|
$ -
|
|
N.M.
|
|
$ 0.1
|
|
$ (0.1)
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Life policies in
force (in thousands)
|
|
|
|
|
|
|
201
|
|
200
|
|
0.5%
|
Life insurance in
force
|
|
|
|
|
|
|
$ 15,801
|
|
$ 15,104
|
|
4.6%
|
Lapse ratio - 12
months
|
|
|
|
|
|
|
|
|
|
|
|
(Ordinary life
insurance)
|
|
|
|
|
|
|
4.0%
|
|
4.4%
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE AND
OTHER (A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of income
(loss) before tax:
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
investment gains
|
$ 2.2
|
|
$ 1.3
|
|
69.2%
|
|
$ 10.9
|
|
$ 22.2
|
|
-50.9%
|
Interest
expense
|
(3.6)
|
|
(3.5)
|
|
2.9%
|
|
(14.2)
|
|
(14.2)
|
|
-
|
Other operating
expenses, net investment income
|
|
|
|
|
|
|
|
|
|
|
|
and other
income
|
(1.8)
|
|
(1.1)
|
|
63.6%
|
|
(5.0)
|
|
(5.6)
|
|
-10.7%
|
Income (loss) before
tax
|
(3.2)
|
|
(3.3)
|
|
-3.0%
|
|
(8.3)
|
|
2.4
|
|
N.M.
|
Net income
(loss)
|
(2.1)
|
|
(2.2)
|
|
-4.5%
|
|
(5.5)
|
|
1.4
|
|
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
|
|
|
|
Year Ended
|
|
|
|
|
|
|
December
31,
|
|
|
|
December
31,
|
|
|
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
|
INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annuity and
Life
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at
fair value (amortized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cost 2014, $5,597.1;
2013, $5,023.2)
|
|
|
|
|
|
|
$ 6,066.1
|
|
$ 5,243.3
|
|
15.7%
|
|
Equity securities, at
fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(cost 2014,
$41.5; 2013, $35.5)
|
|
|
|
|
|
|
39.7
|
|
32.4
|
|
22.5%
|
|
Short-term
investments
|
|
|
|
|
|
|
94.9
|
|
152.9
|
|
-37.9%
|
|
Policy
loans
|
|
|
|
|
|
|
145.4
|
|
140.6
|
|
3.4%
|
|
Other
investments
|
|
|
|
|
|
|
76.0
|
|
59.9
|
|
26.9%
|
|
|
|
Total Annuity and
Life investments
|
|
|
|
|
|
|
6,422.1
|
|
5,629.1
|
|
14.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property &
Casualty
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at
fair value (amortized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cost 2014,
$778.1; 2013, $761.0)
|
|
|
|
|
|
|
827.0
|
|
766.3
|
|
7.9%
|
|
Equity securities, at
fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(cost 2014,
$58.4; 2013, $49.3)
|
|
|
|
|
|
|
70.9
|
|
59.5
|
|
19.2%
|
|
Short-term
investments
|
|
|
|
|
|
|
4.1
|
|
13.6
|
|
-69.9%
|
|
Other
investments
|
|
|
|
|
|
|
36.3
|
|
30.7
|
|
18.2%
|
|
|
|
Total Property &
Casualty investments
|
|
|
|
|
|
|
938.3
|
|
870.1
|
|
7.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
investments
|
|
|
|
|
|
|
43.1
|
|
40.3
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
investments
|
|
|
|
|
|
|
7,403.5
|
|
6,539.5
|
|
13.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
|
|
|
|
|
|
|
|
|
|
|
Before tax
|
$ 82.8
|
|
$ 80.4
|
|
3.0%
|
|
$ 329.8
|
|
$ 313.6
|
|
5.2%
|
|
After tax
|
55.6
|
|
53.9
|
|
3.2%
|
|
221.4
|
|
210.8
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
investment gains
|
|
|
|
|
|
|
|
|
|
|
|
|
Before tax
|
$ 2.2
|
|
$ 1.3
|
|
69.2%
|
|
$ 10.9
|
|
$ 22.2
|
|
-50.9%
|
|
After tax
|
1.3
|
|
0.9
|
|
44.4%
|
|
6.9
|
|
14.4
|
|
-52.1%
|
|
|
Per share,
diluted
|
$ 0.03
|
|
$ 0.02
|
|
50.0%
|
|
$ 0.17
|
|
$ 0.34
|
|
-50.0%
|
|
|
N.M. - Not
meaningful.
|
|
- 5 -
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/horace-mann-reports-fourth-quarter-2014-operating-eps-of-068-300033089.html
SOURCE Horace Mann Educators Corporation