Horace Mann announces second-quarter catastrophe losses between $41 and $43 million, pretax, as weather-driven losses rise across industry
July 20 2023 - 3:15PM
Business Wire
- Q2 core EPS* expected to be between $0.01 and $0.03 as the
benefits of diversification offset weather impact on Property &
Casualty segment results
- Longer-term outlook largely unchanged due to accelerating
impact of P&C rate actions and growing significance of new
Worksite business
Horace Mann Educators Corporation (NYSE:HMN) today announced it
expects second-quarter 2023 core EPS in the range of $0.01 to
$0.03. Continued strong performance of the company’s Worksite and
Life & Retirement businesses offset the impact of outsized
weather activity across the country, which was also a primary
factor in continued elevated auto loss frequency.
Second-quarter catastrophe losses are now expected to be between
$41 million to $43 million, pretax. In total, there were 19 events
designated as catastrophes by Property Claims Services (PCS) in
this year’s second quarter, including multiple severe convective
storms across the Midwest and Texas in June. Catastrophe losses are
expected to contribute 26 to 27 points to the second-quarter
combined ratio.
“Across the country, weather events are increasing in frequency
and size, resulting in record levels of catastrophe losses for the
industry,” said President & CEO Marita Zuraitis. “I am proud of
our team members who continuously deliver on Horace Mann’s promise
to help affected educator customers at the ‘moment of truth.’
“Second-quarter underlying Property & Casualty results
confirm we took appropriate reserve actions in 2022 to address the
emergence of the post-pandemic inflationary loss environment,”
added Zuraitis. “Auto rate increases since the beginning of 2022
have reached almost 15% nationwide, and we expect the cumulative
year-end impact to be near 20%. Further, we expect average renewal
premiums for property to increase by 17% to 20% in 2023 due to rate
increases and other actions. We will continue to address the
increased weather activity through additional filed rate, product
changes and enhanced modeling.
“Our expected results for the second quarter, as well our
outlook, benefit from the significant revenue and earnings
diversification efforts we’ve undertaken in the past five years,”
Zuraitis continued. “Strong contributions from our Worksite and
Life & Retirement businesses, combined with continued progress
toward P&C segment profitability targets, should enable us to
deliver 2023 core EPS in the range of $1.20 to $1.45. We continue
to see sales momentum across our entire business and we remain
confident in our long-term outlook.
Full-year 2023 EPS guidance now reflects an increase in the
full-year catastrophe loss estimate to $95 million to $100 million
to acknowledge the potential for continued outsized weather through
the second half.
Second-quarter 2023 financial results to be announced on
August 1
Horace Mann plans to release its second-quarter 2023 results on
August 1, after the market closes. Management will host a
conference call to discuss the financial results on August 2 at
12:30 p.m. Eastern Time. Investors can access the call webcast via
the Events page of the company’s investor site or by dialing
844-735-3325. For the webcast, please log on to the site
several minutes in advance to register and download any required
audio software. On-demand replay will be available later that
day.
Safe Harbor Statement and Non-GAAP Measures
Certain statements included in this news release, including
those regarding our earnings outlook, expected catastrophe losses,
our investment strategies, our plans to implement additional rate
actions, our plans relating to share repurchases and dividends, our
efforts to enhance customer experience and expand our products and
solutions to more educators, our strategies to create sustainable
long-term growth and double-digit ROEs, our strategy to achieve a
larger share of the education market, and other business
strategies, constitute forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements are made based on management’s
current expectations and beliefs concerning future developments and
their potential effects upon Horace Mann and its subsidiaries.
Horace Mann cautions investors that such statements are subject to
risks and uncertainties, many of which are difficult to predict and
generally beyond Horace Mann’s control, that could cause actual
results to differ materially from those expressed in, or implied or
projected by, the forward-looking statements included in this
document. Certain important factors that could cause actual results
to differ, possibly materially, from expectations or estimates
reflected in such forward-looking statements can be found in the
“Risk Factors” and “Forward-Looking Information” sections included
in Horace Mann’s Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q filed with the Securities and Exchange Commission
(SEC). The forward-looking statements herein are subject to the
risk, among others, that we will be unable to execute our strategy
because of market or competitive conditions or other factors.
Horace Mann does not undertake to update any particular
forward-looking statement included in this document if we later
become aware that such statement is not likely to be achieved.
Information contained in this news release include measures
which are based on methodologies other than accounting principles
generally accepted in the United States of America (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 Horace
Mann’s SEC filings.
About Horace Mann
Horace Mann Educators Corporation is the largest financial
services company focused on helping America’s educators and others
who serve the community achieve lifelong financial success. The
company offers individual and group insurance and financial
solutions tailored to the needs of the educator community. Founded
by Educators for Educators® in 1945, the company is headquartered
in Springfield, Illinois. For more information, visit
horacemann.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20230720201895/en/
Heather J. Wietzel Vice President, Investor Relations and
Enterprise Communications 217.788.5144
investorrelations@horacemann.com
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