Horace Mann Educators Corp 8-K, filed Apr 4, 2023
Horace Mann Educators Corp (HMN)
8-K
2023-04-04
For: 2023-04-03
View Original
Added on
April 07, 2026
About this 8-K
Horace Mann Educators Corp filed this 8-K on April 4, 2023, reporting on events of April 3, 2023.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report: April 3, 2023
(Exact name of registrant as specified in its charter)
| (State of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: 217 ‑789‑2500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01: Regulation FD Disclosure.
On April 3, 2023, Horace Mann Educators Corporation (the "Company") made available a Supplemental Exhibit to illustrate the anticipated changes to the presentation of the Company's prior period financial results as a result of the adoption of Accounting Standards Update No. 2018-12, “Targeted Improvements to the Accounting for Long-Duration Contracts”. The Company adopted this update effective January 1, 2023 using the modified retrospective approach where permitted with changes applied as of January 1, 2021, also referred to as the transition date.
This information is being made available to provide investors with additional information regarding the expected impact of the accounting standards update to the Company's historical financial results and the presentation thereof prior to the Company's earnings release for the quarter ended March 31, 2023. A copy of the Supplemental Exhibit is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.
In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to Item 7.01 of this report, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01: Financial Statements and Exhibits
(d)Exhibits.
Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HORACE MANN EDUCATORS CORPORATION | |||||||||||
| By: | /s/ Donald M. Carley | ||||||||||
| Name: | Donald M. Carley | ||||||||||
| Title: | Executive Vice President, General Counsel and Corporate Secretary | ||||||||||
Date: April 3, 2023
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Exhibit 99.1
Glossary of Selected Terms
The following measures are used by the Company’s management to evaluate performance against historical results and establish targets on a consolidated basis. A number of these measures are components of net income or the balance sheet but, in some cases, are not based on accounting principles generally accepted in the United States of America (non-GAAP) under applicable SEC rules because they are not displayed as separate line items in the Consolidated Statements of Operations and Comprehensive Income (Loss) or Consolidated Balance Sheets or are not required to be disclosed in the Notes to the Consolidated Financial Statements or, in some cases, there is inclusion or exclusion of certain items not ordinarily included or excluded in accordance with accounting principles generally accepted in the United States of America (GAAP).
In the opinion of the Company’s management, a discussion of these measures provides investors, financial analysts, rating agencies and other financial statement users with a better understanding of the significant factors that comprise the Company’s periodic results of operations and how management evaluates the Company's financial performance. Internally, the Company's management uses the measures to evaluate performance against historical results, to establish financial targets on a consolidated basis and for other reasons.
Some of these measures exclude net investment gains (losses), net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends. Also, some of these measures exclude goodwill and intangible asset impairments and intangible asset amortization.
Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by the Company’s management.
Adjusted book value per share - The result of dividing (1) total shareholders’ equity excluding after-tax net unrealized investment gains (losses) on fixed maturity securities and after-tax net reserve remeasurements attributable to discount rates by (2) ending shares outstanding. Book value per share is the most directly comparable GAAP measure. Management believes it is useful to consider the trend in book value per share excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates in conjunction with book value per share to identify and analyze the change in net worth. Management also believes the non-GAAP measure is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily financial market conditions, the magnitude and timing of which are generally not influenced by the Company’s underlying insurance operations.
Tangible book value per share - The result of dividing (1) total shareholders’ equity excluding after-tax net unrealized investment gains (losses) on fixed maturity securities after-tax net reserve remeasurements attributable to discount rates, goodwill and other intangible assets (including the related impact of deferred taxes) by (2) ending shares outstanding. Book value per share is the most directly comparable GAAP measure.
Debt to total capitalization ratio, excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates - The result of dividing (1) total debt by (2) total debt plus common shareholders' equity excluding after-tax net unrealized investment gains (losses) on fixed maturity securities and after-tax net reserve remeasurements attributable to discount rates from common shareholders' equity. The debt to total capitalization ratio is the most directly comparable GAAP measure.
Catastrophe costs - The sum of catastrophe losses, net of reinsurance and before income tax benefits that includes allocated loss adjustment expenses and reinsurance reinstatement premiums, excluding unallocated loss adjustment expenses.
Catastrophe losses - In categorizing property and casualty claims as being from a catastrophe, the Company utilizes the designations of the Property Claim Services, a subsidiary of Insurance Services Office, Inc., and additionally beginning in 2007, includes losses from all such events that meet the definition of a covered loss in the Company’s primary catastrophe excess of loss reinsurance contract, and reports claims and claim expense amounts net of reinsurance recoverables. A catastrophe is a severe loss resulting from natural and man-made events within a particular territory, including risks such as hurricane, fire, earthquake, windstorm, explosion, terrorism and other similar events, that causes $25 million or more in insured property and casualty losses for the industry and affects a significant number of property and casualty insurers and policyholders. Each catastrophe has unique characteristics. Catastrophes are not predictable as to timing or amount of loss in advance. Their
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effects are not included in earnings or claim and claim expense reserves prior to occurrence. In the opinion of the Company’s management, a discussion of the impact of catastrophes is meaningful for investors to understand the variability in periodic earnings.
Core earnings (loss) - Consolidated net income (loss) excluding the after-tax impact of net investment gains (losses), discontinued operations, the after-tax impact of goodwill and intangible asset impairments and the cumulative effect of changes in accounting principles when applicable. Net income is the most directly comparable GAAP measure.
•Pretax core earnings (loss) - Pretax net income (loss) excluding the pretax impact of net investment gains (losses), discontinued operations, the pretax impact of goodwill and intangible asset impairments and cumulative effect of changes in accounting principles when applicable. Income before income taxes is the most directly comparable GAAP measure.
•Segment core earnings (loss) - Determined in the same manner as core earnings (loss) on a consolidated basis. Management uses segment core earnings to analyze each segment's performance and as a tool in making business decisions. Financial statement users also consider core earnings when analyzing the results and trends of insurance companies.
Core earnings (loss) per share - Core earnings on a per common share basis. Earnings per share is the most directly comparable GAAP measure.
Adjusted core earnings (loss) – Determined in the same manner as core earnings (loss) but this measure is further adjusted to exclude intangible asset amortization to calculate adjusted core earnings (loss). Net income is the most directly comparable GAAP measure.
•Pretax adjusted core earnings (loss) – Determined in the same manner as pretax core earnings (loss) but this measure is further adjusted to exclude pretax intangible asset amortization to calculate pretax adjusted core earnings (loss). Income before income taxes is the most directly comparable GAAP measure.
Net premiums written and contract deposits – Management utilizes this non-GAAP measure, which is based on statutory accounting principles, in analyzing and evaluating business growth. Premiums and contract charges earned is the most directly comparable GAAP measure.
Net premiums written and contract deposits for the Company’s operating segments are as follows:
Property & Casualty
Net premiums written: Reflects the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the contract and reflect gross premiums written less premiums ceded to reinsurers. The difference between premiums written and premiums earned is premiums unearned.
Life & Retirement
Life Insurance Product Lines:
•Net premiums written and contract deposits: Reflects (1) the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the contract and reflect gross premiums written less premiums ceded to reinsurers, and (2) the amount charged for policies in force during a fiscal period for traditional life business. Contract deposits include amounts received from customers on deposit-type contracts.
Retirement Product Lines:
•Net annuity contract deposits: Reflects total recurring deposits and single deposits/rollovers – net of contract deposits ceded to reinsurers.
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Supplemental & Group Benefits
Worksite Direct Product Lines:
•Net premiums written and contract deposits: Reflects (1) the direct and assumed contractually determined amounts charged to policyholders/certificate holders for the effective period of the contract based on the terms and conditions of the contract and reflect gross premiums written less premiums ceded to reinsurers, and (2) the amount charged for policies in force during a fiscal period for traditional life business. Contract deposits include amounts received from customers on deposit-type contracts.
Employer-Sponsored Product Lines:
•Net premiums written: Reflects (1) the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the contract and reflect gross premiums written less premiums ceded to reinsurers, and (2) the amount charged for policies in force during a fiscal period for traditional life business.
Investment yield, excluding limited partnership interests - annualized, pretax and after-tax - For the three month periods presented, investment yields are calculated by annualizing the result of year-to-date total net investment income, pretax adjusted to exclude (1) investment income from deposit asset on reinsurance, (2) investment income from limited partnership interests (excluding investment income on commercial mortgage loan funds) and (3) FHLB interest credited for the corresponding periods, divided by the average quarter-end and beginning of quarter carrying amount of the total investment portfolio as presented in the Consolidated Balance Sheets adjusted to exclude (1) FHLB funding agreements, (2) the carrying amount of limited partnership interests (excluding the carrying amount of commercial mortgage loan funds), and (3) gross unrealized investment gains (losses) on fixed maturity securities. For full year periods presented, investment yields are calculated by (i) summing the investment yields for each respective three-month period applicable to the year and (ii) dividing that sum per the calculation in (i) by four. Net investment income is the most directly comparable GAAP measure.
Net income return on equity - LTM: The ratio of (1) trailing 12 month net income to (2) the average of ending shareholders’ equity for the current quarter end and the preceding four quarter ends - referred to as the 5 quarter average of shareholders' equity.
•Net income return on equity - Annualized: The ratio of (1) annualized net income to (2) the 2 quarter average of shareholders' equity.
•Core return on equity - LTM: The ratio of (1) trailing 12 month core earnings to (2) the 5 quarter average of shareholders’ equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates. Net income return on equity - LTM is the most directly comparable GAAP measure.
•Core return on equity - Annualized: The ratio of (1) annualized core earnings to (2) the 2 quarter average of shareholders’ equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates. Net income return on equity - Annualized is the most directly comparable GAAP measure.
•Adjusted core return on equity - LTM: The ratio of (1) trailing 12 month adjusted core earnings to (2) the 5 quarter average of shareholders’ equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates. Net income return on equity - LTM is the most directly comparable GAAP measure.
•Adjusted core return on equity - Annualized: The ratio of (1) annualized adjusted core earnings to (2) the 2 quarter average of shareholders’ equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates. Net income return on equity - Annualized is the most directly comparable GAAP measure.
Net reserves - Property and casualty unpaid claim and claim expense reserves net of anticipated reinsurance recoverables.
Prior years’ reserve development - A measure which the Company reports for its Property & Casualty segment which identifies the increase or decrease in net incurred claim and claim expense reserves at successive valuation dates for claims which occurred in previous calendar years. In the opinion of management, a discussion of prior
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years’ reserve development is useful to investors as it allows them to assess the impact on current period earnings of incurred claims experience from the current calendar year and previous calendar years.
Property & Casualty operating statistics - Operating measures utilized by the Company and the insurance industry regarding the relative profitability of property and casualty underwriting results.
•Loss ratio - The ratio of (1) the sum of net incurred losses and loss adjustment expenses to (2) net earned premiums.
•Underlying loss ratio - The sum of the loss ratio adjusted to remove the effect of catastrophe losses and prior years' reserve development. The loss ratio is the most directly comparable GAAP measure. Management believes this ratio provides a valuable measure of the Company's underlying underwriting performance that may be obscured by the effects of catastrophe losses and prior years' reserve development, the amounts of which may be significant and may vary significantly between periods.
•Expense ratio - The ratio of (1) the sum of operating expenses and the amortization of policy acquisition costs to (2) net earned premiums.
•Combined ratio - The sum of the loss ratio and the expense ratio. A combined ratio less than 100% generally indicates profitable underwriting prior to the consideration of net investment income.
•Underlying combined ratio or combined ratio excluding catastrophe losses and prior years’ reserve development - The sum of the loss ratio and the expense ratio adjusted to remove the effect of catastrophe losses and prior years’ reserve development. The combined ratio is the most directly comparable GAAP measure. Management believes this ratio provides a valuable measure of the Company’s underlying underwriting performance that may be obscured by the effects of catastrophe losses and prior years’ reserve development, the amounts of which may be significant and may vary significantly between periods.
Sales – Sales data pertains to Horace Mann products and excludes authorized products sold by exclusive agents that are underwritten by third-party vendors. Sales should not be viewed as a substitute for any GAAP measure, including "sales" as it relates to non-insurance companies, and the Company’s definition of sales, sales deposits or new annualized sales might differ from that used by other companies. The Company utilizes sales information as a performance measure that indicates the productivity of its agency force. Sales are also a leading indicator of future revenue trends.
Sales for the Company’s operating segments are as follows:
Property & Casualty
•Sales: Sales are measured as premiums to be collected over the 12 months following the sale of new automobile and property policies.
Life & Retirement
Life Insurance Product Lines:
•Annualized sales: Annualized sales are based on the total yearly premium that the Company would expect to receive if all first year recurring premium policies would remain in force, plus 10% of single and indexed universal life excess premiums. Annualized sales measure activity associated with gaining new insurance business in the current period, and includes deposits received related to universal-life-type products.
Supplemental & Group Benefits
Worksite Direct Product Lines:
•Sales: Based on application received date on the submitted policy and measured as the submitted annual premium.
Employer-Sponsored Product Lines:
•Sales: Sales are measured based on the first year annualized premium on the effective date of sale.
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Table of Contents
| Page | |||||
| Consolidated Financial Highlights | |||||
| Selected Financial Data - Five Year History | |||||
| Consolidated Statements of Operations | |||||
| Consolidated Balance Sheets | |||||
| Capital Metrics | |||||
| Property & Casualty Segment | |||||
| Statements of Operations | |||||
| Auto / Property and Other Products | |||||
| Life & Retirement Segment | |||||
| Statements of Operations | |||||
| Life Insurance / Retirement Products | |||||
| Account Value Rollforward | |||||
| Supplemental & Group Benefits | |||||
| Statements of Operations | |||||
| Worksite Direct / Employer-Sponsored Products | |||||
| Corporate & Other Segment | |||||
| Statements of Operations | |||||
| Investment Earnings Before Taxes Consolidated | |||||
| Composition of Invested Assets Consolidated | |||||
| Appendix: Reconciliations of GAAP Measures to Non-GAAP Measures | |||||
| Reconciliation of Net Income (Loss) to Core Earnings (Loss) and Adjusted Core Earnings | |||||
| Reconciliation of Life & Retirement Net Income to Core Earnings and Adjusted Core Earnings Reconciliation of Supplemental & Group Benefits Net Income to Core Earnings and Adjusted Core Earnings | |||||
| Reconciliation of Return on Equity | |||||
| Reconciliation of Book Value per Common Share to Adjusted Book Value per Common Share and Tangible Book Value per Common Share Reconciliation of Debt to Total Capitalization Ratio to Debt to Total Capitalization Ratio, Excluding Net Unrealized Gains (Losses) on Fixed Maturity Securities and Net Reserve Remeasurements Attributable to Discount Rates | |||||
| Reconciliation of Investment Yield, Excluding Limited Partnership Interests | |||||
| Operating Ratios - Property & Casualty | 24 | ||||
| Ratings and Contact Information | 26 | ||||
| Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | ||||||||
Consolidated Financial Highlights
| ($ in millions, except per share data) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Net premiums and contract charges earned | $ | 259.1 | $ | 257.4 | $ | 255.4 | $ | 255.8 | $ | 210.6 | $ | 1,027.7 | $ | 888.8 | |||||||||||||||||||||||||||
| Net investment income | 100.2 | 97.6 | 105.2 | 97.9 | 114.1 | 400.9 | 422.5 | ||||||||||||||||||||||||||||||||||
| Net investment losses | (12.7) | (12.8) | (15.5) | (15.5) | (0.4) | (56.5) | (11.0) | ||||||||||||||||||||||||||||||||||
| Other income | (0.2) | 0.4 | 0.8 | 8.5 | 6.9 | 9.5 | 29.0 | ||||||||||||||||||||||||||||||||||
| Total revenues | $ | 346.4 | $ | 342.6 | $ | 345.9 | $ | 346.7 | $ | 331.2 | $ | 1,381.6 | $ | 1,329.3 | |||||||||||||||||||||||||||
| Net income (loss) | $ | (16.7) | $ | 20.4 | $ | (4.2) | $ | 20.3 | $ | 46.9 | $ | 19.8 | $ | 170.4 | |||||||||||||||||||||||||||
| Core earnings (loss)* | (2.9) | 30.5 | 8.0 | 32.5 | 47.2 | 68.1 | 179.0 | ||||||||||||||||||||||||||||||||||
| Adjusted core earnings (loss)* | 0.5 | 33.8 | 11.3 | 35.8 | 49.8 | 81.4 | 189.3 | ||||||||||||||||||||||||||||||||||
| At Period End | |||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 13,310.5 | $ | 13,166.6 | $ | 13,665.0 | $ | 14,408.0 | $ | 14,465.4 | $ | 13,310.5 | $ | 14,465.4 | |||||||||||||||||||||||||||
| Total policy liabilities | 7,668.8 | 7,649.6 | 7,783.8 | 7,956.7 | 7,733.1 | 7,668.8 | 7,733.1 | ||||||||||||||||||||||||||||||||||
| Debt | 498.0 | 497.9 | 497.8 | 502.7 | 502.6 | 498.0 | 502.6 | ||||||||||||||||||||||||||||||||||
| Shareholders' equity | 1,098.3 | 1,092.3 | 1,197.2 | 1,351.5 | 1,499.0 | 1,098.3 | 1,499.0 | ||||||||||||||||||||||||||||||||||
Per Share and Shares Data (in millions)(1) | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) per share (basic) | $ | (0.40) | $ | 0.49 | $ | (0.10) | $ | 0.48 | $ | 1.12 | $ | 0.48 | $ | 4.06 | |||||||||||||||||||||||||||
| Net income (loss) per share (diluted) | (0.40) | 0.49 | (0.10) | 0.48 | 1.11 | 0.47 | 4.04 | ||||||||||||||||||||||||||||||||||
| Core earnings (loss) per share (diluted)* | (0.06) | 0.73 | 0.19 | 0.77 | 1.12 | 1.62 | 4.24 | ||||||||||||||||||||||||||||||||||
| Adjusted core earnings per share (diluted)* | 0.02 | 0.82 | 0.26 | 0.85 | 1.18 | 1.94 | 4.48 | ||||||||||||||||||||||||||||||||||
| Weighted average shares (basic) | 41.4 | 41.4 | 41.8 | 41.9 | 42.0 | 41.6 | 42.0 | ||||||||||||||||||||||||||||||||||
| Dilutive effect of share equivalents | 0.2 | 0.2 | — | 0.2 | 0.2 | 0.2 | 0.2 | ||||||||||||||||||||||||||||||||||
| Weighted average shares (diluted) | 41.6 | 41.6 | 41.8 | 42.1 | 42.2 | 41.8 | 42.2 | ||||||||||||||||||||||||||||||||||
| Book value per share | $ | 26.85 | $ | 26.71 | $ | 29.06 | $ | 32.66 | $ | 36.21 | $ | 26.85 | $ | 36.21 | |||||||||||||||||||||||||||
| Per share impact of net unrealized investment gains (losses) on fixed maturity securities* | (10.99) | (12.14) | (6.84) | 0.31 | 8.39 | (10.99) | 8.39 | ||||||||||||||||||||||||||||||||||
| Per share impact of net reserve remeasurements attributable to discount rates* | 1.44 | 1.80 | (0.90) | (4.96) | (9.35) | 1.44 | (9.35) | ||||||||||||||||||||||||||||||||||
| Adjusted book value per share* | $ | 36.40 | $ | 37.05 | $ | 36.80 | $ | 37.31 | $ | 37.17 | $ | 36.40 | $ | 37.17 | |||||||||||||||||||||||||||
| Tangible book value per share* | $ | 30.58 | $ | 30.99 | $ | 30.69 | $ | 31.12 | $ | 32.62 | $ | 30.58 | $ | 32.62 | |||||||||||||||||||||||||||
| Dividends paid per share | $ | 0.32 | $ | 0.32 | $ | 0.32 | $ | 0.32 | $ | 0.31 | $ | 1.28 | $ | 1.24 | |||||||||||||||||||||||||||
| Financial Ratios | |||||||||||||||||||||||||||||||||||||||||
Net Income ROE - LTM(2) | 1.6 | % | 6.3 | % | 5.9 | % | 9.8 | % | 11.6 | % | 1.6 | % | 11.6 | % | |||||||||||||||||||||||||||
| Net Income ROE - Annualized | (6.1) | % | 7.1 | % | (1.3) | % | 5.7 | % | 12.6 | % | 1.5 | % | 11.9 | % | |||||||||||||||||||||||||||
| Core ROE - LTM* | 4.5 | % | 7.8 | % | 7.4 | % | 10.3 | % | 11.9 | % | 4.5 | % | 11.9 | % | |||||||||||||||||||||||||||
| Core ROE - Annualized* | (0.8) | % | 8.0 | % | 2.1 | % | 8.4 | % | 12.4 | % | 4.5 | % | 12.1 | % | |||||||||||||||||||||||||||
| Adjusted Core ROE - LTM* | 5.4 | % | 8.6 | % | 8.2 | % | 11.0 | % | 12.6 | % | 5.4 | % | 12.6 | % | |||||||||||||||||||||||||||
| Adjusted Core ROE - Annualized* | 0.1 | % | 8.9 | % | 3.0 | % | 9.3 | % | 13.1 | % | 5.4 | % | 12.8 | % | |||||||||||||||||||||||||||
| Debt to total capitalization excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates* | 25.1 | % | 24.7 | % | 24.7 | % | 24.6 | % | 24.6 | % | 25.1 | % | 24.6 | % | |||||||||||||||||||||||||||
| Investment yield, excluding limited partnership interests, pretax - annualized* | 4.01 | % | 4.26 | % | 4.28 | % | 4.29 | % | 4.32 | % | 4.25 | % | 4.27 | % | |||||||||||||||||||||||||||
(1) Calculated using basic shares when in a net loss or core loss position.
(2) LTM = Last twelve months.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 3 | |||||||
Selected Financial Data - Five Year History
| ($ in millions, except per share data) | Year Ended December 31, | ||||||||||||||||||||||||||||
2022(1) | 2021 | 2020 | 2019(1) | 2018 | |||||||||||||||||||||||||
| Consolidated Statement of Operations Data | |||||||||||||||||||||||||||||
| Net premiums and contract charges earned | $ | 1,027.7 | $ | 888.8 | $ | 930.7 | $ | 898.0 | $ | 817.3 | |||||||||||||||||||
| Net investment income | 400.9 | 422.5 | 357.6 | 365.1 | 376.5 | ||||||||||||||||||||||||
| Net income (loss) | 19.8 | 170.4 | 133.3 | 184.4 | 18.3 | ||||||||||||||||||||||||
| Net income ROE - Annualized | 1.5 | % | 11.9 | % | 7.9 | % | 12.9 | % | 1.3 | % | |||||||||||||||||||
| At Period End | |||||||||||||||||||||||||||||
| Total assets | $ | 13,310.5 | $ | 14,465.4 | $ | 13,471.8 | $ | 12,478.7 | $ | 11,031.9 | |||||||||||||||||||
| Total policy liabilities | 7,668.8 | 7,733.1 | 7,148.6 | 6,956.5 | 6,384.1 | ||||||||||||||||||||||||
| Debt | 498.0 | 502.6 | 437.3 | 433.0 | 297.7 | ||||||||||||||||||||||||
| Shareholders' equity | 1,098.3 | 1,499.0 | 1,790.1 | 1,567.3 | 1,290.6 | ||||||||||||||||||||||||
| Per Share and Shares Data (in millions) | |||||||||||||||||||||||||||||
| Net income (loss) per share (basic) | $ | 0.48 | $ | 4.06 | $ | 3.18 | $ | 4.42 | $ | 0.44 | |||||||||||||||||||
| Net income (loss) per share (diluted) | 0.47 | 4.04 | 3.17 | 4.40 | 0.44 | ||||||||||||||||||||||||
| Weighted average shares (basic) | 41.6 | 42.0 | 41.9 | 41.7 | 41.6 | ||||||||||||||||||||||||
| Weighted average shares (diluted) | 41.8 | 42.2 | 42.0 | 41.9 | 41.9 | ||||||||||||||||||||||||
| Book value per share | $ | 26.85 | $ | 36.21 | $ | 43.22 | $ | 38.01 | $ | 31.50 | |||||||||||||||||||
| Adjusted book value per share* | 36.40 | 37.17 | 34.38 | 32.42 | 29.13 | ||||||||||||||||||||||||
| Tangible book value per share* | 30.58 | 32.62 | 29.52 | 26.90 | 27.91 | ||||||||||||||||||||||||
| Dividends paid per share | $ | 1.28 | $ | 1.24 | $ | 1.20 | $ | 1.15 | $ | 1.14 | |||||||||||||||||||
| Segment Information | |||||||||||||||||||||||||||||
| Net premiums written and contract deposits* | |||||||||||||||||||||||||||||
| Property & Casualty | $ | 617.5 | $ | 607.8 | $ | 635.5 | $ | 683.1 | $ | 681.5 | |||||||||||||||||||
| Life & Retirement | 544.8 | 563.0 | 536.3 | 529.6 | 550.4 | ||||||||||||||||||||||||
| Supplemental & Group Benefits | 274.7 | 128.0 | 133.2 | 68.7 | 3.1 | ||||||||||||||||||||||||
| Total | $ | 1,437.0 | $ | 1,298.8 | $ | 1,305.0 | $ | 1,281.4 | $ | 1,235.0 | |||||||||||||||||||
| Net income (loss) | |||||||||||||||||||||||||||||
| Property & Casualty | $ | (44.4) | $ | 57.0 | $ | 76.5 | $ | 54.3 | $ | (14.3) | |||||||||||||||||||
| Life & Retirement | 63.8 | 89.1 | 30.7 | 12.6 | 60.4 | ||||||||||||||||||||||||
| Supplemental & Group Benefits | 65.9 | 52.9 | 42.9 | 18.2 | 0.1 | ||||||||||||||||||||||||
| Corporate & Other | (65.5) | (28.6) | (16.8) | 99.3 | (27.9) | ||||||||||||||||||||||||
| Total | $ | 19.8 | $ | 170.4 | $ | 133.3 | $ | 184.4 | $ | 18.3 | |||||||||||||||||||
(1) The acquisition of NTA Life Enterprises, LLC closed on July 1, 2019. The acquisition of Madison National Life Insurance Company, Inc. closed on January 1, 2022. Both entities are reported in the Supplemental & Group Benefits segment.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 4 | |||||||
Consolidated Statements of Operations
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||
| Net premiums and contract charges earned | $ | 259.1 | $ | 257.4 | $ | 255.4 | $ | 255.8 | $ | 210.6 | $ | 1,027.7 | $ | 888.8 | |||||||||||||||||||||||||||
| Net investment income | 100.2 | 97.6 | 105.2 | 97.9 | 114.1 | 400.9 | 422.5 | ||||||||||||||||||||||||||||||||||
| Net investment losses | (12.7) | (12.8) | (15.5) | (15.5) | (0.4) | (56.5) | (11.0) | ||||||||||||||||||||||||||||||||||
| Other income | (0.2) | 0.4 | 0.8 | 8.5 | 6.9 | 9.5 | 29.0 | ||||||||||||||||||||||||||||||||||
| Total revenues | 346.4 | 342.6 | 345.9 | 346.7 | 331.2 | 1,381.6 | 1,329.3 | ||||||||||||||||||||||||||||||||||
| Benefits, losses and expenses | |||||||||||||||||||||||||||||||||||||||||
| Benefits, claims and settlement expenses | 201.2 | 167.2 | 203.4 | 175.2 | 165.9 | 747.0 | 590.7 | ||||||||||||||||||||||||||||||||||
| Interest credited | 47.5 | 44.8 | 41.4 | 39.7 | 9.6 | 173.4 | 160.0 | ||||||||||||||||||||||||||||||||||
| Operating expenses | 86.1 | 75.5 | 77.2 | 76.7 | 68.6 | 315.5 | 251.0 | ||||||||||||||||||||||||||||||||||
| DAC amortization expense | 22.6 | 22.2 | 21.4 | 22.0 | 22.6 | 88.2 | 90.6 | ||||||||||||||||||||||||||||||||||
| Intangible asset amortization expense | 4.2 | 4.2 | 4.2 | 4.2 | 3.2 | 16.8 | 13.0 | ||||||||||||||||||||||||||||||||||
| Interest expense | 5.9 | 5.3 | 4.3 | 3.9 | 3.5 | 19.4 | 13.9 | ||||||||||||||||||||||||||||||||||
| Other expense - goodwill and intangible asset impairments | 4.8 | — | — | — | — | 4.8 | — | ||||||||||||||||||||||||||||||||||
| Total benefits, losses and expenses | 372.3 | 319.2 | 351.9 | 321.7 | 273.4 | 1,365.1 | 1,119.2 | ||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | (25.9) | 23.4 | (6.0) | 25.0 | 57.8 | 16.5 | 210.1 | ||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | (9.2) | 3.0 | (1.8) | 4.7 | 10.9 | (3.3) | 39.7 | ||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (16.7) | $ | 20.4 | $ | (4.2) | $ | 20.3 | $ | 46.9 | $ | 19.8 | $ | 170.4 | |||||||||||||||||||||||||||
| Other Statistics | |||||||||||||||||||||||||||||||||||||||||
| Effective tax rate on net investment income | 20.7 | % | 20.6 | % | 20.6 | % | 20.5 | % | 20.6 | % | 20.6 | % | 20.5 | % | |||||||||||||||||||||||||||
| Net investment income, after tax | $ | 79.5 | $ | 77.5 | $ | 83.5 | $ | 77.8 | $ | 90.6 | $ | 318.3 | $ | 335.7 | |||||||||||||||||||||||||||
Credit loss and intent-to-sell impairments(1) | (0.3) | (6.7) | (1.9) | (1.8) | (0.6) | (10.7) | (10.4) | ||||||||||||||||||||||||||||||||||
| Catastrophe losses, net of reinsurance, pretax | 12.4 | 14.6 | 45.7 | 7.3 | 11.1 | 80.0 | 78.2 | ||||||||||||||||||||||||||||||||||
| Catastrophe losses, net of reinsurance, after tax | 9.8 | 11.5 | 36.2 | 5.7 | 8.8 | 63.2 | 61.8 | ||||||||||||||||||||||||||||||||||
(1) Included in pretax net investment losses.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 5 | |||||||
Consolidated Balance Sheets
| ($ in millions, except per share data) | Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sept. 30, | |||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Investments | |||||||||||||||||||||||||||||||||||
| Fixed maturity securities, available for sale, at fair value | $ | 5,185.0 | $ | 5,272.1 | $ | 5,688.0 | $ | 5,987.4 | $ | 6,239.3 | $ | 6,512.0 | |||||||||||||||||||||||
| Equity securities, at fair value | 99.6 | 113.8 | 117.3 | 126.8 | 147.2 | 152.3 | |||||||||||||||||||||||||||||
| Limited partnership interests | 983.7 | 997.5 | 828.4 | 801.9 | 712.8 | 615.4 | |||||||||||||||||||||||||||||
| Short-term and other investments | 319.3 | 254.6 | 302.7 | 337.0 | 350.2 | 251.6 | |||||||||||||||||||||||||||||
| Total investments | 6,587.6 | 6,638.0 | 6,936.4 | 7,253.1 | 7,449.5 | 7,531.3 | |||||||||||||||||||||||||||||
| Cash | 42.8 | 36.2 | 50.1 | 49.1 | 133.7 | 40.2 | |||||||||||||||||||||||||||||
| Deferred policy acquisition costs | 330.6 | 328.8 | 326.5 | 323.8 | 324.4 | 323.4 | |||||||||||||||||||||||||||||
| Reinsurance balances receivable | 506.2 | 497.5 | 497.6 | 510.9 | 153.2 | 137.4 | |||||||||||||||||||||||||||||
| Deposit asset on reinsurance | 2,516.6 | 2,525.6 | 2,507.1 | 2,491.8 | 2,481.5 | 2,477.9 | |||||||||||||||||||||||||||||
| Intangible assets | 185.2 | 192.2 | 196.4 | 200.6 | 145.4 | 148.7 | |||||||||||||||||||||||||||||
| Goodwill | 54.3 | 56.3 | 56.3 | 56.3 | 43.5 | 43.5 | |||||||||||||||||||||||||||||
| Other assets | 294.9 | 292.4 | 283.4 | 300.5 | 293.2 | 318.8 | |||||||||||||||||||||||||||||
| Separate Account variable annuity assets | 2,792.3 | 2,599.6 | 2,811.2 | 3,221.9 | 3,441.0 | 3,326.8 | |||||||||||||||||||||||||||||
| Total assets | $ | 13,310.5 | $ | 13,166.6 | $ | 13,665.0 | $ | 14,408.0 | $ | 14,465.4 | $ | 14,348.0 | |||||||||||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||||||
| Policy liabilities | |||||||||||||||||||||||||||||||||||
| Investment contract and future policy benefit reserves | $ | 6,820.5 | $ | 6,902.6 | $ | 7,042.0 | $ | 7,237.8 | $ | 7,051.5 | $ | 7,052.5 | |||||||||||||||||||||||
| Unpaid claims and claim expenses | 582.2 | 479.1 | 488.1 | 473.8 | 425.9 | 440.1 | |||||||||||||||||||||||||||||
| Unearned premiums | 266.1 | 267.9 | 253.7 | 245.1 | 255.7 | 261.8 | |||||||||||||||||||||||||||||
| Total policy liabilities | 7,668.8 | 7,649.6 | 7,783.8 | 7,956.7 | 7,733.1 | 7,754.4 | |||||||||||||||||||||||||||||
| Other policyholder funds | 953.6 | 1,000.3 | 1,027.3 | 1,009.8 | 945.9 | 994.3 | |||||||||||||||||||||||||||||
| Other liabilities | 299.5 | 326.9 | 347.7 | 365.4 | 343.8 | 402.4 | |||||||||||||||||||||||||||||
| Short-term debt | 249.0 | 249.0 | 249.0 | 249.0 | 249.0 | 135.0 | |||||||||||||||||||||||||||||
| Long-term debt | 249.0 | 248.9 | 248.8 | 253.7 | 253.6 | 253.6 | |||||||||||||||||||||||||||||
| Separate Account variable annuity liabilities | 2,792.3 | 2,599.6 | 2,811.2 | 3,221.9 | 3,441.0 | 3,326.8 | |||||||||||||||||||||||||||||
| Total liabilities | 12,212.2 | 12,074.3 | 12,467.8 | 13,056.5 | 12,966.4 | 12,866.5 | |||||||||||||||||||||||||||||
| Common stock, $0.001 par value | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||||||||||
| Additional paid-in capital | 502.6 | 500.4 | 498.1 | 496.6 | 495.3 | 492.9 | |||||||||||||||||||||||||||||
| Retained earnings | 1,512.4 | 1,542.4 | 1,535.3 | 1,553.0 | 1,547.0 | 1,513.2 | |||||||||||||||||||||||||||||
| Accumulated other comprehensive income, net of taxes: | |||||||||||||||||||||||||||||||||||
| Net unrealized investment gains (losses) on fixed maturity securities | (449.6) | (496.8) | (281.8) | 13.0 | 347.1 | 366.4 | |||||||||||||||||||||||||||||
| Net reserve remeasurements attributable to discount rates | 59.0 | 73.8 | (36.9) | (205.4) | (386.9) | (390.1) | |||||||||||||||||||||||||||||
| Net funded status of benefit plans | (8.8) | (10.2) | (10.2) | (10.2) | (10.2) | (11.2) | |||||||||||||||||||||||||||||
| Treasury stock, at cost | (517.4) | (517.4) | (507.4) | (495.6) | (493.4) | (489.8) | |||||||||||||||||||||||||||||
| Total shareholders' equity | 1,098.3 | 1,092.3 | 1,197.2 | 1,351.5 | 1,499.0 | 1,481.5 | |||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 13,310.5 | $ | 13,166.6 | $ | 13,665.0 | $ | 14,408.0 | $ | 14,465.4 | $ | 14,348.0 | |||||||||||||||||||||||
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 6 | |||||||
Capital Metrics
| ($ in millions, except per share data) | Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||
| Debt and Total Capitalization | ||||||||||||||||||||||||||||||||||||||||||||
Short-term debt due under revolving credit facility(1) | $ | 249.0 | $ | 249.0 | $ | 249.0 | $ | 249.0 | $ | 249.0 | $ | 249.0 | $ | 249.0 | ||||||||||||||||||||||||||||||
| Senior Debt: | ||||||||||||||||||||||||||||||||||||||||||||
| 4.50% Senior notes due December 1, 2025 | 249.0 | 248.9 | 248.8 | 248.7 | 248.6 | 249.0 | 248.6 | |||||||||||||||||||||||||||||||||||||
| FHLB Borrowing | — | — | — | 5.0 | 5.0 | — | 5.0 | |||||||||||||||||||||||||||||||||||||
| Total debt | 498.0 | 497.9 | 497.8 | 502.7 | 502.6 | 498.0 | 502.6 | |||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 1,098.3 | 1,092.3 | 1,197.2 | 1,351.5 | 1,499.0 | 1,098.3 | 1,499.0 | |||||||||||||||||||||||||||||||||||||
| Total capitalization | $ | 1,596.3 | $ | 1,590.2 | $ | 1,695.0 | $ | 1,854.2 | $ | 2,001.6 | $ | 1,596.3 | $ | 2,001.6 | ||||||||||||||||||||||||||||||
| Debt to shareholders' equity | 45.3 | % | 45.6 | % | 41.6 | % | 37.2 | % | 33.5 | % | 45.3 | % | 33.5 | % | ||||||||||||||||||||||||||||||
| Debt to total capitalization | 31.2 | % | 31.3 | % | 29.4 | % | 27.1 | % | 25.1 | % | 31.2 | % | 25.1 | % | ||||||||||||||||||||||||||||||
Debt to total capitalization excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates* | 25.1 | % | 24.7 | % | 24.7 | % | 24.6 | % | 24.6 | % | 25.1 | % | 24.6 | % | ||||||||||||||||||||||||||||||
| Capital Returned to Shareholders | ||||||||||||||||||||||||||||||||||||||||||||
| Number of shares of common stock repurchased (thousands) | — | 295.4 | 315.7 | 59.7 | 96.1 | 670.8 | 140.8 | |||||||||||||||||||||||||||||||||||||
Common stock repurchased(2) | $ | — | $ | 10.0 | $ | 11.8 | $ | 2.2 | $ | 3.6 | $ | 24.0 | $ | 5.3 | ||||||||||||||||||||||||||||||
| Cash dividends paid | 13.1 | 13.1 | 13.2 | 13.2 | 12.8 | 52.6 | 51.4 | |||||||||||||||||||||||||||||||||||||
| Total capital returned to shareholders | $ | 13.1 | $ | 23.1 | $ | 25.0 | $ | 15.4 | $ | 16.4 | $ | 76.6 | $ | 56.7 | ||||||||||||||||||||||||||||||
(1) Amount available for borrowing is $76.0 million; At LIBOR +115 bps; Expires on July 12, 2026.
(2) As of December 31, 2022, the Company's 2022 program had a remaining authorization of $41.3 million..
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 7 | |||||||
Property & Casualty Segment I Statements of Operations
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Underwriting Results | |||||||||||||||||||||||||||||||||||||||||
| Net premiums written* | $ | 153.5 | $ | 166.4 | $ | 158.0 | $ | 139.6 | $ | 146.6 | $ | 617.5 | $ | 607.8 | |||||||||||||||||||||||||||
| Net premiums earned | 155.7 | 152.4 | 149.9 | 150.2 | 153.3 | 608.2 | 617.4 | ||||||||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | |||||||||||||||||||||||||||||||||||||||||
| Current accident year before catastrophe losses | 127.1 | 105.7 | 98.5 | 101.0 | 98.6 | 432.3 | 376.9 | ||||||||||||||||||||||||||||||||||
| Current accident year catastrophe losses | 12.4 | 14.6 | 45.7 | 7.3 | 11.1 | 80.0 | 78.2 | ||||||||||||||||||||||||||||||||||
Prior years' reserve development(1) | 14.0 | 2.0 | 6.0 | — | — | 22.0 | (7.2) | ||||||||||||||||||||||||||||||||||
| Total losses and loss adjustment expenses | 153.5 | 122.3 | 150.2 | 108.3 | 109.7 | 534.3 | 447.9 | ||||||||||||||||||||||||||||||||||
| Operating expenses, including DAC amortization expense | 45.8 | 41.6 | 40.1 | 39.4 | 43.3 | 166.9 | 164.8 | ||||||||||||||||||||||||||||||||||
| Underwriting gain (loss) | (43.6) | (11.5) | (40.4) | 2.5 | 0.3 | (93.0) | 4.7 | ||||||||||||||||||||||||||||||||||
| Net investment income | 8.5 | 8.0 | 7.7 | 7.2 | 17.3 | 31.4 | 61.1 | ||||||||||||||||||||||||||||||||||
| Other income | 0.7 | 0.7 | 1.2 | 0.8 | 0.5 | 3.4 | 4.5 | ||||||||||||||||||||||||||||||||||
| Interest expense | — | — | — | — | — | — | 0.1 | ||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | (34.4) | (2.8) | (31.5) | 10.5 | 18.1 | (58.2) | 70.2 | ||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | (9.4) | (0.3) | (6.1) | 2.0 | 3.6 | (13.8) | 13.2 | ||||||||||||||||||||||||||||||||||
Net income (loss)(2) | $ | (25.0) | $ | (2.5) | $ | (25.4) | $ | 8.5 | $ | 14.5 | $ | (44.4) | $ | 57.0 | |||||||||||||||||||||||||||
| Core earnings (loss)* | $ | (25.0) | $ | (2.5) | $ | (25.4) | $ | 8.5 | $ | 14.5 | $ | (44.4) | $ | 57.0 | |||||||||||||||||||||||||||
| Underwriting Ratios (%) | |||||||||||||||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | |||||||||||||||||||||||||||||||||||||||||
| Current accident year before catastrophe losses and prior years' reserve development | 81.6 | 69.3 | 65.7 | 67.3 | 64.4 | 71.3 | 61.0 | ||||||||||||||||||||||||||||||||||
| Current accident year catastrophe losses | 8.0 | 9.6 | 30.5 | 4.8 | 7.2 | 13.0 | 12.7 | ||||||||||||||||||||||||||||||||||
Prior years' reserve development(1) | 9.0 | 1.3 | 4.0 | 0.0 | 0.0 | 3.6 | (1.2) | ||||||||||||||||||||||||||||||||||
| Total losses and loss adjustment expenses | 98.6 | 80.2 | 100.2 | 72.1 | 71.6 | 87.9 | 72.5 | ||||||||||||||||||||||||||||||||||
| Expense Ratio | 29.4 | 27.3 | 26.7 | 26.3 | 28.3 | 27.4 | 26.7 | ||||||||||||||||||||||||||||||||||
| Combined ratio | 128.0 | 107.5 | 126.9 | 98.4 | 99.9 | 115.3 | 99.2 | ||||||||||||||||||||||||||||||||||
| Combined ratio before catastrophe losses | 120.0 | 97.9 | 96.4 | 93.6 | 92.7 | 102.3 | 86.5 | ||||||||||||||||||||||||||||||||||
| Combined ratio before catastrophe losses and prior years' reserve development* | 111.0 | 96.6 | 92.4 | 93.6 | 92.7 | 98.7 | 87.7 | ||||||||||||||||||||||||||||||||||
| Informational Data | |||||||||||||||||||||||||||||||||||||||||
Sales* (Annualized premium)(3) | $ | 16.4 | $ | 18.5 | $ | 17.4 | $ | 14.8 | $ | 15.2 | $ | 67.1 | $ | 67.9 | |||||||||||||||||||||||||||
Risks in force (in thousands)(4) | 538 | 540 | 545 | 547 | 553 | 538 | 553 | ||||||||||||||||||||||||||||||||||
(1) (Favorable) unfavorable.
(2) Net investment gains (losses) are not allocated by segment.
(3) Horace Mann products.
(4) Includes assumed risks in force of 4 for auto.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 8 | |||||||
Property & Casualty Segment I Auto Products
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Auto Underwriting Results | |||||||||||||||||||||||||||||||||||||||||
| Net premiums written* | $ | 98.0 | $ | 102.5 | $ | 99.0 | $ | 94.5 | $ | 94.4 | $ | 394.0 | $ | 394.5 | |||||||||||||||||||||||||||
| Net premiums earned | 98.8 | 97.7 | 97.1 | 97.1 | 98.7 | 390.7 | 403.3 | ||||||||||||||||||||||||||||||||||
| Auto Underwriting Ratios (%) | |||||||||||||||||||||||||||||||||||||||||
| Loss and loss adjustment expense ratio | 114.5 | 83.1 | 93.2 | 76.0 | 79.9 | 91.8 | 69.4 | ||||||||||||||||||||||||||||||||||
| Expense ratio | 29.1 | 27.7 | 26.1 | 25.8 | 28.5 | 27.2 | 26.7 | ||||||||||||||||||||||||||||||||||
| Combined ratio | 143.6 | 110.8 | 119.3 | 101.8 | 108.4 | 119.0 | 96.1 | ||||||||||||||||||||||||||||||||||
Prior years' reserve development(1) | 14.2 | 2.0 | 12.4 | 0.0 | 0.0 | 7.2 | (1.2) | ||||||||||||||||||||||||||||||||||
| Catastrophe losses | 0.5 | 2.7 | 3.9 | 0.5 | 0.6 | 1.8 | 1.6 | ||||||||||||||||||||||||||||||||||
| Combined ratio before catastrophe losses and prior years' reserve development* | 128.9 | 106.1 | 103.0 | 101.3 | 107.8 | 110.0 | 95.7 | ||||||||||||||||||||||||||||||||||
| Auto Informational Data | |||||||||||||||||||||||||||||||||||||||||
Household Retention - LTM(2) | 87.0 | % | 86.9 | % | 86.8 | % | 86.5 | % | 86.1 | % | 87.0 | % | 83.7 | % | |||||||||||||||||||||||||||
Sales* (Annualized premium)(3) | $ | 12.6 | $ | 14.1 | $ | 13.6 | $ | 11.5 | $ | 11.5 | $ | 51.8 | $ | 52.5 | |||||||||||||||||||||||||||
Risks in force (in thousands)(4) | 367 | 368 | 371 | 372 | 376 | 367 | 376 | ||||||||||||||||||||||||||||||||||
(2) Retention is based on retained households. History has been restated to reflect this change.
(3) Horace Mann products.
(4) Includes assumed risks in force of 4.
Property & Casualty Segment I Property and Other Products
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Property and Other Underwriting Results | |||||||||||||||||||||||||||||||||||||||||
| Net premiums written* | $ | 55.5 | $ | 63.9 | $ | 59.0 | $ | 45.1 | $ | 52.2 | $ | 223.5 | $ | 213.3 | |||||||||||||||||||||||||||
| Net premiums earned | 56.9 | 54.7 | 52.8 | 53.1 | 54.6 | 217.5 | 214.1 | ||||||||||||||||||||||||||||||||||
| Property and Other Underwriting Ratios (%) | |||||||||||||||||||||||||||||||||||||||||
| Loss and loss adjustment expense ratio | 70.9 | 75.1 | 113.0 | 65.0 | 56.6 | 80.7 | 78.5 | ||||||||||||||||||||||||||||||||||
| Expense ratio | 30.1 | 26.8 | 28.0 | 27.3 | 28.1 | 28.1 | 26.9 | ||||||||||||||||||||||||||||||||||
| Combined ratio | 101.0 | 101.9 | 141.0 | 92.3 | 84.7 | 108.8 | 105.4 | ||||||||||||||||||||||||||||||||||
Prior years' reserve development(1) | 0.0 | 0.0 | (11.4) | 0.0 | 0.0 | (2.8) | (1.0) | ||||||||||||||||||||||||||||||||||
| Catastrophe losses | 21.0 | 21.8 | 79.7 | 12.7 | 19.3 | 33.4 | 33.6 | ||||||||||||||||||||||||||||||||||
| Combined ratio before catastrophe losses and prior years' development* | 80.0 | 80.1 | 72.7 | 79.6 | 65.4 | 78.2 | 72.8 | ||||||||||||||||||||||||||||||||||
| Property and Other Informational Data | |||||||||||||||||||||||||||||||||||||||||
Household Retention - LTM(2) | 89.6 | % | 89.5 | % | 89.5 | % | 89.3 | % | 88.9 | % | 89.6 | % | 88.3 | % | |||||||||||||||||||||||||||
Sales* (Annualized premium)(3) | $ | 3.8 | $ | 4.4 | $ | 3.8 | $ | 3.3 | $ | 3.7 | $ | 15.3 | $ | 15.4 | |||||||||||||||||||||||||||
| Risks in force (in thousands) | 171 | 172 | 174 | 175 | 177 | 171 | 177 | ||||||||||||||||||||||||||||||||||
(1) (Favorable) unfavorable.
(2) Retention is based on retained households. History has been restated to reflect this change.
(3) Horace Mann products.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 9 | |||||||
Life & Retirement Segment I Statements of Operations
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Net premiums written and contract deposits* | $ | 136.8 | $ | 138.0 | $ | 133.6 | $ | 136.4 | $ | 135.6 | $ | 544.8 | $ | 563.0 | |||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||
| Net premiums and contract charges earned | $ | 35.1 | $ | 36.7 | $ | 36.4 | $ | 35.8 | $ | 25.7 | $ | 144.0 | $ | 143.4 | |||||||||||||||||||||||||||
| Net investment income | 84.3 | 81.4 | 88.4 | 84.2 | 91.2 | 338.3 | 338.6 | ||||||||||||||||||||||||||||||||||
| Other income | 3.6 | 4.1 | 4.4 | 4.9 | 5.1 | 17.0 | 20.0 | ||||||||||||||||||||||||||||||||||
| Total revenues | 123.0 | 122.2 | 129.2 | 124.9 | 122.0 | 499.3 | 502.0 | ||||||||||||||||||||||||||||||||||
| Benefits and Expenses | |||||||||||||||||||||||||||||||||||||||||
Death benefits / mortality costs(1) | 14.9 | 17.5 | 14.8 | 21.4 | 17.2 | 68.6 | 74.5 | ||||||||||||||||||||||||||||||||||
| Interest credited | 46.9 | 44.4 | 41.2 | 39.6 | 9.6 | 172.1 | 159.7 | ||||||||||||||||||||||||||||||||||
| Change in reserves | 15.5 | 10.6 | 13.8 | 13.0 | 31.6 | 52.9 | 35.4 | ||||||||||||||||||||||||||||||||||
| Operating expenses | 27.8 | 24.1 | 24.8 | 25.7 | 26.9 | 102.4 | 100.6 | ||||||||||||||||||||||||||||||||||
| DAC amortization expense | 5.9 | 6.0 | 5.4 | 5.7 | 5.7 | 23.0 | 22.1 | ||||||||||||||||||||||||||||||||||
| Intangible asset amortization expense | 0.3 | 0.2 | 0.3 | 0.3 | 0.3 | 1.1 | 1.3 | ||||||||||||||||||||||||||||||||||
| Other expense - goodwill and intangible asset impairments | 4.8 | — | — | — | — | 4.8 | — | ||||||||||||||||||||||||||||||||||
| Total benefits and expenses | 116.1 | 102.8 | 100.3 | 105.7 | 91.3 | 424.9 | 393.6 | ||||||||||||||||||||||||||||||||||
| Income before income taxes | 6.9 | 19.4 | 28.9 | 19.2 | 30.7 | 74.4 | 108.4 | ||||||||||||||||||||||||||||||||||
| Income tax expense | 0.1 | 1.7 | 5.2 | 3.6 | 5.2 | 10.6 | 19.3 | ||||||||||||||||||||||||||||||||||
Net income(2) | $ | 6.8 | $ | 17.7 | $ | 23.7 | $ | 15.6 | $ | 25.5 | $ | 63.8 | $ | 89.1 | |||||||||||||||||||||||||||
| Core earnings* | 10.6 | 17.7 | 23.7 | 15.6 | 25.5 | 67.6 | 89.1 | ||||||||||||||||||||||||||||||||||
| Adjusted core earnings* | $ | 10.9 | $ | 17.9 | $ | 23.9 | $ | 15.8 | $ | 25.8 | $ | 68.5 | $ | 90.1 | |||||||||||||||||||||||||||
(1) Ordinary life insurance.
(2) Net investment gains (losses) are not allocated by segment.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 10 | |||||||
Life & Retirement Segment I Life Insurance Products
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Net premiums written and contract deposits* | $ | 31.8 | $ | 30.0 | $ | 29.4 | $ | 24.4 | $ | 31.4 | $ | 115.6 | $ | 114.2 | |||||||||||||||||||||||||||
| Net investment income | 19.1 | 21.5 | 18.6 | 21.5 | 20.5 | 22.5 | 79.7 | 82.7 | |||||||||||||||||||||||||||||||||
Death benefits / mortality costs(1) | 14.9 | 17.5 | 14.8 | 21.4 | 17.2 | 68.6 | 74.5 | ||||||||||||||||||||||||||||||||||
| Earnings margin (before tax) | |||||||||||||||||||||||||||||||||||||||||
| Return on net premiums - LTM | 29.1 | % | 39.4 | % | 40.2 | % | 39.0 | % | 38.5 | % | 29.1 | % | 38.5 | % | |||||||||||||||||||||||||||
| Informational Data | |||||||||||||||||||||||||||||||||||||||||
Lapse ratio - LTM(1) | 4.0 | % | 4.0 | % | 3.8 | % | 3.8 | % | 3.5 | % | 4.0 | % | 3.5 | % | |||||||||||||||||||||||||||
| Annualized sales* | $ | 3.1 | $ | 2.2 | $ | 2.2 | $ | 1.8 | $ | 2.3 | $ | 9.3 | $ | 8.7 | |||||||||||||||||||||||||||
| Insurance in force | $ | 20,030 | $ | 19,815 | $ | 19,714 | $ | 19,595 | $ | 19,548 | $ | 20,030 | $ | 19,548 | |||||||||||||||||||||||||||
| Policies in force (in thousands) | 162 | 162 | 162 | 163 | 163 | 162 | 163 | ||||||||||||||||||||||||||||||||||
(1) Ordinary life insurance. Definition changed to death benefits paid plus the change in claims reserve in recast.
Life & Retirement Segment I Retirement Products
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Net annuity contract deposits* | $ | 105.0 | $ | 108.1 | $ | 104.2 | $ | 112.0 | $ | 104.2 | $ | 429.3 | $ | 448.8 | |||||||||||||||||||||||||||
| Net investment income - managed portfolio | 39.1 | 36.0 | 41.2 | 38.8 | 42.7 | 155.1 | 154.8 | ||||||||||||||||||||||||||||||||||
| Interest credited | 18.9 | 16.5 | 13.9 | 12.8 | 13.1 | 62.1 | 51.8 | ||||||||||||||||||||||||||||||||||
| Net interest margin | 20.2 | 19.5 | 27.3 | 26.0 | 29.6 | 93.0 | 103.0 | ||||||||||||||||||||||||||||||||||
| Investment income - deposit asset on reinsurance | 26.1 | 26.7 | 25.8 | 24.9 | 26.0 | 103.5 | 101.1 | ||||||||||||||||||||||||||||||||||
| Interest credited - reinsured block | 27.1 | 27.1 | 26.5 | 26.1 | 26.7 | 106.8 | 104.6 | ||||||||||||||||||||||||||||||||||
| Net interest margin - reinsured block | $ | (1.0) | $ | (0.4) | $ | (0.7) | $ | (1.2) | $ | (0.7) | $ | (3.3) | $ | (3.5) | |||||||||||||||||||||||||||
| Fixed annuity interest spread - Annualized | 198 | 193 | 303 | 286 | 344 | 246 | 290 | ||||||||||||||||||||||||||||||||||
| Variable annuity fee margin - Annualized | 146 | 155 | 142 | 136 | 148 | 135 | 146 | ||||||||||||||||||||||||||||||||||
| Informational Data | |||||||||||||||||||||||||||||||||||||||||
| Assets under administration (AUA) | |||||||||||||||||||||||||||||||||||||||||
Annuity assets under management(1) | $ | 4,837.9 | $ | 4,694.6 | $ | 4,841.9 | $ | 5,134.5 | $ | 5,285.7 | $ | 4,837.9 | $ | 5,285.7 | |||||||||||||||||||||||||||
| Brokerage and advisory assets under administration | 2,112.6 | 2,058.3 | 2,176.3 | 2,486.0 | 2,597.9 | 2,112.6 | 2,597.9 | ||||||||||||||||||||||||||||||||||
| Recordkeeping assets under administration | 1,169.8 | 1,124.6 | 1,192.5 | 1,407.2 | 1,572.0 | 1,169.8 | 1,572.0 | ||||||||||||||||||||||||||||||||||
| Total AUA | $ | 8,120.3 | $ | 7,877.5 | $ | 8,210.7 | $ | 9,027.7 | $ | 9,455.6 | $ | 8,120.3 | $ | 9,455.6 | |||||||||||||||||||||||||||
| Total Persistency - LTM | 93.7 | % | 94.0 | % | 94.1 | % | 94.3 | % | 94.4 | % | 93.7 | % | 94.4 | % | |||||||||||||||||||||||||||
| Annuity contracts in force (in thousands) | 228 | 227 | 228 | 229 | 230 | 228 | 230 | ||||||||||||||||||||||||||||||||||
Horace Mann Retirement Advantage® contracts in force (in thousands) | 17 | 16 | 16 | 16 | 15 | 17 | 15 | ||||||||||||||||||||||||||||||||||
(1) Amount reported as of December 31, 2022 excludes $637.7 million of assets under management held under modified coinsurance reinsurance.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 11 | |||||||
Life & Retirement Segment I Account Value Rollforward
| ($ in millions) | Three Months Ended | ||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sept. 30, | ||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||||||||
Fixed Account Annuities(1) | |||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 2,033.2 | $ | 2,023.3 | $ | 2,012.8 | $ | 2,007.4 | $ | 2,011.7 | $ | 2,004.6 | |||||||||||||||||||||||
| Reinsurance transfer | 7.9 | (20.8) | (16.3) | (10.1) | (6.2) | (21.9) | |||||||||||||||||||||||||||||
| Deposits | 52.3 | 59.8 | 46.0 | 46.6 | 43.4 | 57.0 | |||||||||||||||||||||||||||||
| Withdrawals | (113.4) | (82.6) | (74.5) | (79.9) | (99.0) | (72.7) | |||||||||||||||||||||||||||||
| Net transfers | 5.9 | 7.9 | 15.8 | 11.0 | 10.5 | 8.1 | |||||||||||||||||||||||||||||
| Interest credited | 47.1 | 44.6 | 41.4 | 39.9 | 40.8 | 40.7 | |||||||||||||||||||||||||||||
| Other | (4.1) | 1.0 | (1.9) | (2.1) | 6.2 | (4.1) | |||||||||||||||||||||||||||||
| Ending balance | $ | 2,028.9 | $ | 2,033.2 | $ | 2,023.3 | $ | 2,012.8 | $ | 2,007.4 | $ | 2,011.7 | |||||||||||||||||||||||
Fixed Indexed Account Annuities(2) | |||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 516.9 | $ | 518.2 | $ | 518.3 | $ | 522.6 | $ | 513.4 | $ | 512.1 | |||||||||||||||||||||||
| Deposits | 7.0 | 8.1 | 8.0 | 9.3 | 9.6 | 10.3 | |||||||||||||||||||||||||||||
| Withdrawals | (11.4) | (10.9) | (10.2) | (11.9) | (10.2) | (14.9) | |||||||||||||||||||||||||||||
| Net transfers | (1.4) | (0.7) | (0.2) | (0.1) | (0.6) | (0.9) | |||||||||||||||||||||||||||||
| Index credits | — | — | 0.7 | 2.5 | 5.4 | 5.1 | |||||||||||||||||||||||||||||
| Other | (0.8) | 2.2 | 1.6 | (4.1) | 5.0 | 1.7 | |||||||||||||||||||||||||||||
| Ending balance | $ | 510.3 | $ | 516.9 | $ | 518.2 | $ | 518.3 | $ | 522.6 | $ | 513.4 | |||||||||||||||||||||||
Variable Account Annuities(3) | |||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 2,599.6 | $ | 2,811.2 | $ | 3,221.8 | $ | 3,441.0 | $ | 3,326.9 | $ | 3,256.7 | |||||||||||||||||||||||
| Deposits | 55.5 | 55.9 | 62.1 | 66.8 | 66.2 | 71.0 | |||||||||||||||||||||||||||||
| Withdrawals | (47.4) | (47.3) | (44.9) | (47.3) | (55.5) | (45.6) | |||||||||||||||||||||||||||||
| Net transfers | (4.5) | (7.2) | (15.5) | (10.9) | (9.9) | (7.2) | |||||||||||||||||||||||||||||
| Fees and charges | (10.6) | (10.8) | (11.2) | (11.7) | (13.2) | (12.4) | |||||||||||||||||||||||||||||
| Market appreciation (depreciation) | 199.7 | (202.2) | (401.1) | (216.1) | 126.5 | 64.4 | |||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Ending balance | $ | 2,792.3 | $ | 2,599.6 | $ | 2,811.2 | $ | 3,221.8 | $ | 3,441.0 | $ | 3,326.9 | |||||||||||||||||||||||
| Held under modified coinsurance agreement | 637.7 | 600.8 | 658.4 | 767.8 | 834.6 | 820.2 | |||||||||||||||||||||||||||||
| Ending balance net of reinsurance | $ | 2,154.6 | $ | 1,998.8 | $ | 2,152.8 | $ | 2,454.0 | $ | 2,606.4 | $ | 2,506.7 | |||||||||||||||||||||||
| Fixed and variable annuities in payout phase | $ | 144.1 | $ | 145.7 | $ | 147.6 | $ | 149.4 | $ | 149.3 | $ | 149.9 | |||||||||||||||||||||||
(1) Represents account balances having a guarantee of principal and a guaranteed minimum rate of return.
(2) Represents account balances with a contingent return linked to the Standard & Poor's 500 Index and/or the Dow Jones Industrial Average.
(3) Represents account balances invested in various mutual funds at the direction of the contractholders who bear the investment risk.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 12 | |||||||
Supplemental & Group Benefits I Statements of Operations
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||
| Net premiums and contract charges earned | $ | 68.2 | $ | 68.3 | $ | 69.1 | $ | 69.9 | $ | 31.6 | $ | 275.5 | $ | 128.0 | |||||||||||||||||||||||||||
| Net investment income | 7.9 | 8.7 | 9.6 | 7.1 | 6.2 | 33.3 | 25.2 | ||||||||||||||||||||||||||||||||||
| Other income | (5.0) | (5.2) | (4.8) | 1.6 | 0.7 | (13.4) | 2.6 | ||||||||||||||||||||||||||||||||||
| Total revenues | 71.1 | 71.8 | 73.9 | 78.6 | 38.5 | 295.4 | 155.8 | ||||||||||||||||||||||||||||||||||
| Benefits and Expenses | |||||||||||||||||||||||||||||||||||||||||
| Benefits, settlement expenses and change in reserves | 17.9 | 17.1 | 24.8 | 32.6 | 7.5 | 92.4 | 33.2 | ||||||||||||||||||||||||||||||||||
| Operating expenses (includes DAC amortization expense) | 27.3 | 24.4 | 26.3 | 25.3 | 11.0 | 103.3 | 43.5 | ||||||||||||||||||||||||||||||||||
| Intangible asset amortization expense | 3.9 | 4.0 | 3.9 | 3.9 | 2.9 | 15.7 | 11.7 | ||||||||||||||||||||||||||||||||||
| Total benefits and expenses | 49.1 | 45.5 | 55.0 | 61.8 | 21.4 | 211.4 | 88.4 | ||||||||||||||||||||||||||||||||||
| Income before income taxes | 22.0 | 26.3 | 18.9 | 16.8 | 17.1 | 84.0 | 67.4 | ||||||||||||||||||||||||||||||||||
| Income tax expense | 5.0 | 5.6 | 3.8 | 3.7 | 3.6 | 18.1 | 14.5 | ||||||||||||||||||||||||||||||||||
Net income(1) | $ | 17.0 | $ | 20.7 | $ | 15.1 | $ | 13.1 | $ | 13.5 | $ | 65.9 | $ | 52.9 | |||||||||||||||||||||||||||
| Core earnings* | $ | 17.0 | $ | 20.7 | $ | 15.1 | $ | 13.1 | $ | 13.5 | $ | 65.9 | $ | 52.9 | |||||||||||||||||||||||||||
| Adjusted core earnings* | $ | 20.1 | $ | 23.8 | $ | 18.2 | $ | 16.2 | $ | 15.8 | $ | 78.3 | $ | 62.2 | |||||||||||||||||||||||||||
| Informational Data | |||||||||||||||||||||||||||||||||||||||||
| Sales* | $ | 4.5 | $ | 4.4 | $ | 3.5 | $ | 3.7 | $ | 2.3 | $ | 16.1 | $ | 6.5 | |||||||||||||||||||||||||||
Benefits ratio(2) | 26.2 | % | 25.1 | % | 35.8 | % | 46.7 | % | 23.6 | % | 33.5 | % | 25.9 | % | |||||||||||||||||||||||||||
Operating expense ratio(3) | 38.4 | % | 33.9 | % | 35.6 | % | 32.2 | % | 28.5 | % | 35.0 | % | 27.9 | % | |||||||||||||||||||||||||||
Pretax profit margin(3) | 30.9 | % | 36.7 | % | 25.6 | % | 21.3 | % | 44.5 | % | 28.5 | % | 43.3 | % | |||||||||||||||||||||||||||
(1) Net investment gains (losses) are not allocated by segment.
(2) Benefits ratio measured to net premiums earned.
(3) Operating expense ratio and pretax profit margin measured to total revenues.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 13 | |||||||
Supplemental & Group Benefits I Worksite Direct Products
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Net premiums written and contract deposits* | $ | 29.5 | $ | 30.3 | $ | 30.8 | $ | 30.4 | $ | 31.2 | $ | 121.0 | $ | 125.3 | |||||||||||||||||||||||||||
| Informational Data | |||||||||||||||||||||||||||||||||||||||||
| Sales* | $ | 3.4 | $ | 2.2 | $ | 2.2 | $ | 1.4 | $ | 2.3 | $ | 9.2 | $ | 6.5 | |||||||||||||||||||||||||||
Benefits ratio(1) | 16.9 | % | 25.4 | % | 27.2 | % | 22.2 | % | 22.2 | % | 23.0 | % | 25.4 | % | |||||||||||||||||||||||||||
Operating expense ratio(2) | 31.9 | % | 26.3 | % | 26.7 | % | 28.5 | % | 27.6 | % | 28.3 | % | 27.0 | % | |||||||||||||||||||||||||||
Pretax profit margin(2) | 46.6 | % | 46.0 | % | 45.3 | % | 46.2 | % | 46.4 | % | 46.0 | % | 44.4 | % | |||||||||||||||||||||||||||
| Premium persistency (rolling 12 months) | 90.4 | % | 91.3 | % | 92.0 | % | 92.1 | % | 92.5 | % | 90.4 | % | 92.5 | % | |||||||||||||||||||||||||||
| Policies in force (in thousands) | 268 | 272 | 274 | 275 | 278 | 268 | 278 | ||||||||||||||||||||||||||||||||||
(1) Benefits ratio measured to net premiums earned.
(2) Operating expense ratio and pretax profit margin measured to total revenues.
Supplemental & Group Benefits I Employer-Sponsored Products
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Net premiums written and contract deposits* | $ | 38.4 | $ | 38.0 | $ | 37.5 | $ | 39.8 | N.M. | $ | 153.7 | N.M. | |||||||||||||||||||||||||||||
| Informational Data | |||||||||||||||||||||||||||||||||||||||||
| Sales* | $ | 1.1 | $ | 2.2 | $ | 1.3 | $ | 2.3 | N.M. | $ | 6.9 | N.M. | |||||||||||||||||||||||||||||
Benefits ratio(1) | 33.3 | % | 24.8 | % | 42.6 | % | 65.9 | % | N.M. | 41.8 | % | N.M. | |||||||||||||||||||||||||||||
Operating expense ratio(2) | 45.0 | % | 42.3 | % | 45.8 | % | 35.7 | % | N.M. | 41.9 | % | N.M. | |||||||||||||||||||||||||||||
Pretax profit margin(2) | 14.8 | % | 26.5 | % | 2.9 | % | (1.9) | % | N.M. | 10.0 | % | N.M. | |||||||||||||||||||||||||||||
| Covered lives (in thousands) | 735 | 731 | 714 | 717 | N.M. | 735 | N.M. | ||||||||||||||||||||||||||||||||||
N.M. - Not meaningful.
(1) Benefits ratio measured to net premiums earned.
(2) Operating expense ratio and pretax profit margin measured to total revenues.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 14 | |||||||
Corporate & Other Segment I Statements of Operations
| ($ in millions, amounts are net of consolidating eliminations) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||
| Net investment income | $ | (0.5) | $ | (0.5) | $ | (0.5) | $ | (0.6) | $ | (0.6) | $ | (2.1) | $ | (2.4) | |||||||||||||||||||||||||||
| Other income | 0.5 | 0.8 | — | 1.2 | 0.6 | 2.5 | 1.9 | ||||||||||||||||||||||||||||||||||
| Total revenues | — | 0.3 | (0.5) | 0.6 | — | 0.4 | (0.5) | ||||||||||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||||||||
| Interest expense | 5.9 | 5.3 | 4.3 | 3.9 | 3.5 | 19.4 | 13.8 | ||||||||||||||||||||||||||||||||||
| Other operating expenses | 1.9 | 1.7 | 2.0 | 2.6 | 4.2 | 8.2 | 10.6 | ||||||||||||||||||||||||||||||||||
| Total expenses | 7.8 | 7.0 | 6.3 | 6.5 | 7.7 | 27.6 | 24.4 | ||||||||||||||||||||||||||||||||||
| Loss before income taxes | (7.8) | (6.7) | (6.8) | (5.9) | (7.7) | (27.2) | (24.9) | ||||||||||||||||||||||||||||||||||
| Income tax benefit | (2.4) | (1.3) | (1.4) | (1.1) | (1.4) | (6.2) | (4.9) | ||||||||||||||||||||||||||||||||||
| Core loss* after tax | $ | (5.4) | $ | (5.4) | $ | (5.4) | $ | (4.8) | $ | (6.3) | $ | (21.0) | $ | (20.0) | |||||||||||||||||||||||||||
Net investment losses, pretax(1) | (12.7) | (12.8) | (15.5) | (15.5) | (0.4) | (56.5) | (11.0) | ||||||||||||||||||||||||||||||||||
Tax on net investment losses (1) | (2.7) | (2.7) | (3.3) | (3.3) | (0.1) | (12.0) | (2.4) | ||||||||||||||||||||||||||||||||||
Net investment losses, after tax(1) | (10.0) | (10.1) | (12.2) | (12.2) | (0.3) | (44.5) | (8.6) | ||||||||||||||||||||||||||||||||||
| Net loss | $ | (15.4) | $ | (15.5) | $ | (17.6) | $ | (17.0) | $ | (6.6) | $ | (65.5) | $ | (28.6) | |||||||||||||||||||||||||||
| Net Investment Losses | |||||||||||||||||||||||||||||||||||||||||
| Gross realized gains | $ | 0.7 | $ | 1.1 | $ | 1.3 | $ | 5.8 | $ | 8.8 | $ | 8.9 | $ | 25.5 | |||||||||||||||||||||||||||
| Gross realized losses, excluding impairment charges | (14.0) | (2.8) | (2.3) | (2.4) | (5.8) | (21.5) | (23.8) | ||||||||||||||||||||||||||||||||||
| Change in fair value of equity securities | 0.9 | (4.4) | (12.6) | (17.1) | (2.8) | (33.2) | (2.3) | ||||||||||||||||||||||||||||||||||
| Credit loss and intent-to-sell impairments | (0.3) | (6.7) | (1.9) | (1.8) | (0.6) | (10.7) | (10.4) | ||||||||||||||||||||||||||||||||||
| Total net investment losses | $ | (12.7) | $ | (12.8) | $ | (15.5) | $ | (15.5) | $ | (0.4) | $ | (56.5) | $ | (11.0) | |||||||||||||||||||||||||||
(1) Corporate level transactions, such as net investment gains (losses), are not allocated to the operating segments consistent with how management evaluates the results of those segments.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 15 | |||||||
Investment Earnings Before Taxes Consolidated
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Net Investment Income | |||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities(1) | |||||||||||||||||||||||||||||||||||||||||
| Taxable | $ | 60.7 | $ | 61.4 | $ | 59.3 | $ | 55.6 | $ | 55.5 | $ | 237.0 | $ | 223.5 | |||||||||||||||||||||||||||
| Tax-exempt | 2.0 | 2.5 | 2.7 | 3.0 | 2.9 | 10.2 | 12.1 | ||||||||||||||||||||||||||||||||||
| Total fixed maturity securities | 62.7 | 63.9 | 62.0 | 58.6 | 58.4 | 247.2 | 235.6 | ||||||||||||||||||||||||||||||||||
| Equity securities | 1.9 | 1.8 | 4.0 | 1.3 | 1.5 | 9.0 | 5.3 | ||||||||||||||||||||||||||||||||||
| Policy loans | 2.1 | 2.0 | 2.0 | 2.0 | 2.3 | 8.1 | 9.3 | ||||||||||||||||||||||||||||||||||
| Commercial mortgage loan funds | 1.4 | 2.1 | 1.4 | 5.9 | 4.0 | 10.8 | 11.6 | ||||||||||||||||||||||||||||||||||
| Limited partnership interests | 7.8 | 2.9 | 11.9 | 7.1 | 23.9 | 29.7 | 67.4 | ||||||||||||||||||||||||||||||||||
| Short-term investments and other | 0.9 | 0.9 | 0.6 | 0.7 | 0.8 | 3.1 | 2.3 | ||||||||||||||||||||||||||||||||||
| Investment income | 76.8 | 73.6 | 81.9 | 75.6 | 90.9 | 307.9 | 331.5 | ||||||||||||||||||||||||||||||||||
| Investment expense | 2.7 | 2.7 | 2.5 | 2.6 | 2.8 | 10.5 | 10.1 | ||||||||||||||||||||||||||||||||||
| Total net investment income - investment portfolio | 74.1 | 70.9 | 79.4 | 73.0 | 88.1 | 297.4 | 321.4 | ||||||||||||||||||||||||||||||||||
| Investment income - Deposit asset on reinsurance | 26.1 | 26.7 | 25.8 | 24.9 | 26.0 | 103.5 | 101.1 | ||||||||||||||||||||||||||||||||||
| Total gross investment income | $ | 100.2 | $ | 97.6 | $ | 105.2 | $ | 97.9 | $ | 114.1 | $ | 400.9 | $ | 422.5 | |||||||||||||||||||||||||||
Investment yield, pretax - annualized(2) | 4.25 | % | 4.19 | % | 4.86 | % | 4.58 | % | 5.61 | % | 4.47 | % | 5.12 | % | |||||||||||||||||||||||||||
Investment yield, after tax - annualized(2) | 3.38 | % | 3.34 | % | 3.86 | % | 3.64 | % | 4.46 | % | 3.56 | % | 4.08 | % | |||||||||||||||||||||||||||
Investment yield, excluding limited partnership interests, pretax - annualized(2) | 4.01 | % | 4.26 | % | 4.28 | % | 4.29 | % | 4.32 | % | 4.25 | % | 4.27 | % | |||||||||||||||||||||||||||
Investment yield, excluding limited partnership interests, after tax - annualized(2) | 3.19 | % | 3.40 | % | 3.40 | % | 3.42 | % | 3.44 | % | 3.38 | % | 3.40 | % | |||||||||||||||||||||||||||
| Portfolio Net Investment Income by Segment | |||||||||||||||||||||||||||||||||||||||||
| Property & Casualty | $ | 8.5 | $ | 8.0 | $ | 7.7 | $ | 7.2 | $ | 17.3 | $ | 31.4 | $ | 61.1 | |||||||||||||||||||||||||||
| Life & Retirement | 58.2 | 54.6 | 62.7 | 59.3 | 65.2 | 234.8 | 237.5 | ||||||||||||||||||||||||||||||||||
| Supplemental & Group Benefits | 7.9 | 8.7 | 9.6 | 7.1 | 6.2 | 33.3 | 25.2 | ||||||||||||||||||||||||||||||||||
| Corporate & Other, including intersegment eliminations | (0.5) | (0.4) | (0.6) | (0.6) | (0.6) | (2.1) | (2.4) | ||||||||||||||||||||||||||||||||||
| Total net investment income | $ | 74.1 | $ | 70.9 | $ | 79.4 | $ | 73.0 | $ | 88.1 | $ | 297.4 | $ | 321.4 | |||||||||||||||||||||||||||
| Earnings on Limited Partnership Interests by Segment | |||||||||||||||||||||||||||||||||||||||||
| Property & Casualty | $ | 2.4 | $ | 1.9 | $ | (0.3) | $ | 0.7 | $ | 11.2 | $ | 4.7 | $ | 34.9 | |||||||||||||||||||||||||||
| Life & Retirement | 4.9 | 0.3 | 9.9 | 5.2 | 11.1 | 20.3 | 28.1 | ||||||||||||||||||||||||||||||||||
| Supplemental & Group Benefits | 0.5 | 0.7 | 2.3 | 1.2 | 1.6 | 4.7 | 4.4 | ||||||||||||||||||||||||||||||||||
| Total limited partnership interests | $ | 7.8 | $ | 2.9 | $ | 11.9 | $ | 7.1 | $ | 23.9 | $ | 29.7 | $ | 67.4 | |||||||||||||||||||||||||||
(1) Includes income on short-term bonds.
(2) Yields calculated by annualizing the result of year-to-date net investment income divided by the average period-end and beginning of year invested assets at cost, amortized cost, or adjusted carrying value, as applicable.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 16 | |||||||
Composition of Invested Assets Consolidated
| ($ in millions) | December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities, at fair value(1) | $ | 5,185.0 | 78.7 | % | $ | 5,272.1 | 79.4 | % | $ | 5,688.0 | 82.0 | % | $ | 5,987.4 | 82.5 | % | $ | 6,239.3 | 83.7 | % | $ | 6,512.0 | 86.5 | % | |||||||||||||||||||||||||||||
| Equity securities, at fair value | 99.6 | 1.5 | % | 113.8 | 1.7 | % | 117.3 | 1.7 | % | 126.8 | 1.8 | % | 147.2 | 2.0 | % | 152.3 | 2.0 | % | |||||||||||||||||||||||||||||||||||
| Policy loans, at outstanding balance | 139.3 | 2.1 | % | 139.8 | 2.1 | % | 140.8 | 2.0 | % | 141.0 | 2.0 | % | 142.1 | 1.9 | % | 143.9 | 1.9 | % | |||||||||||||||||||||||||||||||||||
| Commercial mortgage loan funds | 593.6 | 9.0 | % | 601.5 | 9.1 | % | 446.4 | 6.5 | % | 429.2 | 5.9 | % | 346.8 | 4.7 | % | 265.9 | 3.5 | % | |||||||||||||||||||||||||||||||||||
| Limited partnership interests | 390.1 | 5.9 | % | 396.0 | 6.0 | % | 382.0 | 5.5 | % | 372.7 | 5.1 | % | 366.0 | 4.9 | % | 349.5 | 4.7 | % | |||||||||||||||||||||||||||||||||||
| Short-term investments and other | 180.0 | 2.8 | % | 114.8 | 1.7 | % | 161.9 | 2.3 | % | 196.0 | 2.7 | % | 208.1 | 2.8 | % | 107.7 | 1.4 | % | |||||||||||||||||||||||||||||||||||
| Total investments | $ | 6,587.6 | 100.0 | % | $ | 6,638.0 | 100.0 | % | $ | 6,936.4 | 100.0 | % | $ | 7,253.1 | 100.0 | % | $ | 7,449.5 | 100.0 | % | $ | 7,531.3 | 100.0 | % | |||||||||||||||||||||||||||||
| Asset-backed securities | $ | 276.9 | 5.3 | % | $ | 290.4 | 5.5 | % | $ | 293.6 | 5.2 | % | $ | 289.7 | 4.8 | % | $ | 274.1 | 4.4 | % | $ | 302.7 | 4.6 | % | |||||||||||||||||||||||||||||
| Collateralized loan obligations | 677.9 | 13.1 | % | 679.7 | 12.9 | % | 680.5 | 12.0 | % | 679.4 | 11.3 | % | 669.1 | 10.7 | % | 687.8 | 10.6 | % | |||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | 298.1 | 5.7 | % | 290.9 | 5.5 | % | 302.5 | 5.3 | % | 297.5 | 5.0 | % | 310.3 | 5.0 | % | 318.5 | 4.9 | % | |||||||||||||||||||||||||||||||||||
| Corporate | 1,935.3 | 37.3 | % | 1,963.2 | 37.2 | % | 2,192.0 | 38.5 | % | 2,338.5 | 39.1 | % | 2,432.3 | 39.0 | % | 2,495.6 | 38.3 | % | |||||||||||||||||||||||||||||||||||
| Municipal | 1,269.7 | 24.5 | % | 1,307.9 | 24.8 | % | 1,426.2 | 25.1 | % | 1,579.5 | 26.4 | % | 1,703.4 | 27.3 | % | 1,775.5 | 27.3 | % | |||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | 381.9 | 7.4 | % | 394.6 | 7.5 | % | 421.9 | 7.4 | % | 436.9 | 7.3 | % | 484.2 | 7.7 | % | 523.0 | 8.0 | % | |||||||||||||||||||||||||||||||||||
| U.S. Treasuries and government agencies | 345.2 | 6.7 | % | 345.4 | 6.6 | % | 371.3 | 6.5 | % | 365.9 | 6.1 | % | 365.9 | 5.9 | % | 408.9 | 6.3 | % | |||||||||||||||||||||||||||||||||||
| Total fixed maturity securities | $ | 5,185.0 | 100.0 | % | $ | 5,272.1 | 100.0 | % | $ | 5,688.0 | 100.0 | % | $ | 5,987.4 | 100.0 | % | $ | 6,239.3 | 100.0 | % | $ | 6,512.0 | 100.0 | % | |||||||||||||||||||||||||||||
| U.S. government/government agencies | $ | 949.2 | 18.3 | % | $ | 954.5 | 18.1 | % | $ | 1,012.3 | 17.8 | % | $ | 1,013.3 | 16.9 | % | $ | 1,064.8 | 17.1 | % | $ | 1,139.0 | 17.5 | % | |||||||||||||||||||||||||||||
| AAA | 556.8 | 10.7 | % | 564.5 | 10.7 | % | 571.3 | 10.0 | % | 590.4 | 9.9 | % | 624.4 | 10.0 | % | 634.0 | 9.7 | % | |||||||||||||||||||||||||||||||||||
| AA | 1,099.0 | 21.2 | % | 1,088.2 | 20.6 | % | 1,179.4 | 20.7 | % | 1,258.7 | 21.0 | % | 1,260.4 | 20.2 | % | 1,341.1 | 20.6 | % | |||||||||||||||||||||||||||||||||||
| A | 916.4 | 17.7 | % | 939.9 | 17.8 | % | 1,020.8 | 17.9 | % | 1,112.2 | 18.6 | % | 1,192.8 | 19.1 | % | 1,203.4 | 18.5 | % | |||||||||||||||||||||||||||||||||||
| BBB | 1,249.4 | 24.1 | % | 1,247.1 | 23.7 | % | 1,356.6 | 23.9 | % | 1,419.3 | 23.7 | % | 1,468.4 | 23.5 | % | 1,547.5 | 23.8 | % | |||||||||||||||||||||||||||||||||||
Not rated(2) | 163.3 | 3.1 | % | 180.0 | 3.4 | % | 191.3 | 3.4 | % | 213.9 | 3.6 | % | 241.7 | 3.9 | % | 262.8 | 4.0 | % | |||||||||||||||||||||||||||||||||||
| Total investment grade | $ | 4,934.1 | 95.1 | % | $ | 4,974.2 | 94.3 | % | $ | 5,331.7 | 93.7 | % | $ | 5,607.8 | 93.7 | % | $ | 5,852.5 | 93.8 | % | $ | 6,127.8 | 94.1 | % | |||||||||||||||||||||||||||||
| BB and below | 142.6 | 2.8 | % | 186.9 | 3.5 | % | 243.7 | 4.3 | % | 274.2 | 4.5 | % | 281.5 | 4.5 | % | 280.4 | 4.3 | % | |||||||||||||||||||||||||||||||||||
Not rated(2) | 108.3 | 2.1 | % | 111.0 | 2.1 | % | 112.6 | 2.0 | % | 105.4 | 1.8 | % | 105.3 | 1.7 | % | 103.8 | 1.6 | % | |||||||||||||||||||||||||||||||||||
| Total below investment grade | $ | 250.9 | 4.9 | % | $ | 297.9 | 5.7 | % | $ | 356.3 | 6.3 | % | $ | 379.6 | 6.3 | % | $ | 386.8 | 6.2 | % | $ | 384.2 | 5.9 | % | |||||||||||||||||||||||||||||
| Total fixed maturity securities | $ | 5,185.0 | 100.0 | % | $ | 5,272.1 | 100.0 | % | $ | 5,688.0 | 100.0 | % | $ | 5,987.4 | 100.0 | % | $ | 6,239.3 | 100.0 | % | $ | 6,512.0 | 100.0 | % | |||||||||||||||||||||||||||||
| Investments by Segment | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property & Casualty | $ | 777.3 | 11.8 | % | $ | 754.9 | 11.4 | % | $ | 792.1 | 11.4 | % | $ | 846.0 | 11.7 | % | $ | 975.9 | 13.1 | % | $ | 985.3 | 13.1 | % | |||||||||||||||||||||||||||||
| Life & Retirement | 5,003.7 | 76.0 | % | 5,064.9 | 76.3 | % | 5,302.1 | 76.4 | % | 5,542.8 | 76.4 | % | 5,790.2 | 77.7 | % | 5,863.9 | 77.8 | % | |||||||||||||||||||||||||||||||||||
| Supplemental & Group Benefits | 804.6 | 12.2 | % | 813.3 | 12.2 | % | 830.1 | 12.0 | % | 863.2 | 11.9 | % | 681.4 | 9.2 | % | 680.7 | 9.1 | % | |||||||||||||||||||||||||||||||||||
Corporate & Other(3) | 2.0 | — | % | 4.9 | 0.1 | % | 12.1 | 0.2 | % | 1.1 | — | % | 2.0 | — | % | 1.4 | — | % | |||||||||||||||||||||||||||||||||||
| Total investments | $ | 6,587.6 | 100.0 | % | $ | 6,638.0 | 100.0 | % | $ | 6,936.4 | 100.0 | % | $ | 7,253.1 | 100.0 | % | $ | 7,449.5 | 100.0 | % | $ | 7,531.3 | 100.0 | % | |||||||||||||||||||||||||||||
(1) Amortized cost, net of $5,756.9, $5,904.1, $6,046.5, $5,970.7, $5,797.7, and $6,045.6, at December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021, and September 30, 2021, respectively.
(2) Securities denoted as not-rated by an NRSRO were classified as investment or non-investment grade according to the securities' respective NAIC designation.
(3) Corporate & Other segment assets are comprised primarily of short-term investments.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 17 | |||||||
Appendix: Reconciliations of GAAP Measures to Non-GAAP Measures
The following measures are used by the Company's management to evaluate financial performance against historical results and establish targets on a consolidated basis. A number of these measures are components of net income or the balance sheet but, in some cases, are not based on accounting principles generally accepted in the United States of America (non-GAAP) under applicable SEC rules because they are not displayed as separate line items in the Consolidated Statements of Operations or the Consolidated Balance Sheets or are not required to be disclosed in the Notes to the Consolidated Financial Statements or, in some cases, there is inclusion or exclusion of certain items not ordinarily included or excluded in accordance with accounting principles generally accepted in the United States of America (GAAP). Reconciliations of these measures to the most comparable GAAP measures also follow.
In the opinion of the Company's management, a discussion of these measures provides investors, financial analysts, rating agencies and other financial statement users with a better understanding of the significant factors that comprise the Company's periodic results of operations and how management evaluates the Company's financial performance. Internally, the Company's management uses these measures to evaluate performance against historical results, to establish financial targets on a consolidated basis and for other reasons, which are discussed below.
Some of these measures exclude net investment gains (losses), net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends.
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.
Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by the Company's management.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 18 | |||||||
Reconciliations of GAAP Measures to Non-GAAP Measures
| ($ in millions after tax) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Net Income (Loss) to Core Earnings (Loss) and Adjusted Core Earnings (Loss) | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (16.7) | $ | 20.4 | $ | (4.2) | $ | 20.3 | $ | 46.9 | $ | 19.8 | $ | 170.4 | |||||||||||||||||||||||||||
| Less: Net investment losses | (10.0) | (10.1) | (12.2) | (12.2) | (0.3) | (44.5) | (8.6) | ||||||||||||||||||||||||||||||||||
| Other expense - goodwill and intangible asset impairments | (3.8) | — | — | — | — | (3.8) | — | ||||||||||||||||||||||||||||||||||
| Core earnings (loss)* | $ | (2.9) | $ | 30.5 | $ | 8.0 | $ | 32.5 | $ | 47.2 | $ | 68.1 | $ | 179.0 | |||||||||||||||||||||||||||
| Less: Intangible asset amortization | 3.4 | 3.3 | 3.3 | 3.3 | 2.6 | 13.3 | 10.3 | ||||||||||||||||||||||||||||||||||
| Adjusted core earnings (loss)* | $ | 0.5 | $ | 33.8 | $ | 11.3 | $ | 35.8 | $ | 49.8 | $ | 81.4 | $ | 189.3 | |||||||||||||||||||||||||||
| Pretax net income (loss) | $ | (25.9) | $ | 23.4 | $ | (6.0) | $ | 25.0 | $ | 57.8 | $ | 16.5 | $ | 210.1 | |||||||||||||||||||||||||||
| Less: Pretax net investment losses | (12.7) | (12.8) | (15.5) | (15.5) | (0.4) | (56.5) | (11.0) | ||||||||||||||||||||||||||||||||||
| Other expense - goodwill and intangible asset impairments, pretax | (4.8) | — | — | — | — | (4.8) | — | ||||||||||||||||||||||||||||||||||
| Pretax core earnings (loss)* | $ | (8.4) | $ | 36.2 | $ | 9.5 | $ | 40.5 | $ | 58.2 | $ | 77.8 | $ | 221.1 | |||||||||||||||||||||||||||
| Less: Pretax Intangible asset amortization | 4.2 | 4.2 | 4.2 | 4.2 | 3.2 | 16.8 | 13.0 | ||||||||||||||||||||||||||||||||||
| Adjusted pretax core earnings (loss)* | $ | (4.2) | $ | 40.4 | $ | 13.7 | $ | 44.7 | $ | 61.4 | $ | 94.6 | $ | 234.1 | |||||||||||||||||||||||||||
| Reconciliation of Net Income (Loss) per Share to Core Earnings (Loss) per Share and Adjusted Core Earnings (Loss) per Share on a Basic and Diluted Basis | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) per share (basic) | $ | (0.40) | $ | 0.49 | $ | (0.10) | $ | 0.48 | $ | 1.12 | $ | 0.48 | $ | 4.06 | |||||||||||||||||||||||||||
| Less: Net investment losses | (0.25) | (0.25) | (0.29) | (0.29) | (0.01) | (1.06) | (0.21) | ||||||||||||||||||||||||||||||||||
| Other expense - goodwill and intangible asset impairments | (0.09) | — | — | — | — | (0.09) | — | ||||||||||||||||||||||||||||||||||
| Core earnings (loss) per share (basic)* | $ | (0.06) | $ | 0.74 | $ | 0.19 | $ | 0.77 | $ | 1.13 | $ | 1.63 | $ | 4.27 | |||||||||||||||||||||||||||
| Less: Intangible asset amortization | 0.08 | 0.08 | 0.08 | 0.08 | 0.06 | 0.32 | 0.24 | ||||||||||||||||||||||||||||||||||
| Adjusted core earnings per share (basic)* | $ | 0.02 | $ | 0.82 | $ | 0.27 | $ | 0.85 | $ | 1.19 | $ | 1.95 | $ | 4.51 | |||||||||||||||||||||||||||
| Net income (loss) per share (diluted) | N/A | $ | 0.49 | $ | (0.10) | $ | 0.48 | $ | 1.11 | $ | 0.47 | $ | 4.04 | ||||||||||||||||||||||||||||
| Less: Net investment losses | N/A | (0.24) | (0.29) | (0.29) | (0.01) | (1.06) | (0.20) | ||||||||||||||||||||||||||||||||||
| Other expense - goodwill and intangible asset impairments | N/A | — | — | — | — | (0.09) | — | ||||||||||||||||||||||||||||||||||
| Core earnings (loss) per share (diluted)* | N/A | $ | 0.73 | $ | 0.19 | $ | 0.77 | $ | 1.12 | $ | 1.62 | $ | 4.24 | ||||||||||||||||||||||||||||
| Less: Intangible asset amortization | N/A | 0.09 | 0.07 | 0.08 | 0.06 | 0.32 | 0.24 | ||||||||||||||||||||||||||||||||||
| Adjusted core earnings (loss) per share (diluted)* | N/A | $ | 0.82 | $ | 0.26 | $ | 0.85 | $ | 1.18 | $ | 1.94 | $ | 4.48 | ||||||||||||||||||||||||||||
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 19 | |||||||
Reconciliations of GAAP Measures to Non-GAAP Measures
| ($ in millions after tax) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Life & Retirement Net Income to Core Earnings and Adjusted Core Earnings | |||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 6.8 | $ | 17.7 | $ | 23.7 | $ | 15.6 | $ | 25.5 | $ | 63.8 | $ | 89.1 | |||||||||||||||||||||||||||
| Less: Net investment gains (losses) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Other expense - goodwill and intangible asset impairments | (3.8) | — | — | — | — | (3.8) | — | ||||||||||||||||||||||||||||||||||
| Core earnings* | $ | 10.6 | $ | 17.7 | $ | 23.7 | $ | 15.6 | $ | 25.5 | $ | 67.6 | $ | 89.1 | |||||||||||||||||||||||||||
| Less: Intangible asset amortization | 0.3 | 0.2 | 0.2 | 0.2 | 0.3 | 0.9 | 1.0 | ||||||||||||||||||||||||||||||||||
| Adjusted core earnings* | $ | 10.9 | $ | 17.9 | $ | 23.9 | $ | 15.8 | $ | 25.8 | $ | 68.5 | $ | 90.1 | |||||||||||||||||||||||||||
| Reconciliation of Supplemental & Group Benefits Net Income to Core Earnings and Adjusted Core Earnings | |||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 17.0 | $ | 20.7 | $ | 15.1 | $ | 13.1 | $ | 13.5 | $ | 65.9 | $ | 52.9 | |||||||||||||||||||||||||||
| Less: Net investment gains (losses) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Other expense - goodwill and intangible asset impairments | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Core earnings* | $ | 17.0 | $ | 20.7 | $ | 15.1 | $ | 13.1 | $ | 13.5 | $ | 65.9 | $ | 52.9 | |||||||||||||||||||||||||||
| Less: Intangible asset amortization | 3.1 | 3.1 | 3.1 | 3.1 | 2.3 | 12.4 | 9.3 | ||||||||||||||||||||||||||||||||||
| Adjusted core earnings* | $ | 20.1 | $ | 23.8 | $ | 18.2 | $ | 16.2 | $ | 15.8 | $ | 78.3 | $ | 62.2 | |||||||||||||||||||||||||||
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 20 | |||||||
Reconciliations of GAAP Measures to Non-GAAP Measures
| ($ in millions) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Return on Equity | |||||||||||||||||||||||||||||||||||||||||
| Average Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | $ | 1,098.3 | $ | 1,092.3 | $ | 1,197.2 | $ | 1,351.5 | $ | 1,499.0 | $ | 1,098.3 | $ | 1,499.0 | |||||||||||||||||||||||||||
| Net unrealized investment gains (losses) on fixed maturity securities | (449.6) | (496.8) | (281.8) | 13.0 | 347.1 | (449.6) | 347.1 | ||||||||||||||||||||||||||||||||||
| Net reserve remeasurements attributable to discount rates | 59.0 | 73.8 | (36.9) | (205.4) | (386.9) | 59.0 | (386.9) | ||||||||||||||||||||||||||||||||||
| Five quarter average shareholders' equity | 1,247.7 | 1,324.3 | 1,403.3 | 1,447.3 | 1,471.3 | 1,247.7 | 1,471.3 | ||||||||||||||||||||||||||||||||||
| Two quarter average shareholders' equity | 1,095.3 | 1,144.8 | 1,274.4 | 1,425.3 | 1,490.3 | 1,298.7 | 1,428.5 | ||||||||||||||||||||||||||||||||||
| Five quarter average shareholders' equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates | 1,520.6 | 1,523.8 | 1,520.0 | 1,507.5 | 1,498.4 | 1,520.6 | 1,498.4 | ||||||||||||||||||||||||||||||||||
| Two quarter average shareholders' equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates | 1,502.1 | 1,515.6 | 1,529.9 | 1,541.4 | 1,522.0 | 1,513.9 | 1,478.5 | ||||||||||||||||||||||||||||||||||
| Net Income Return on Equity - LTM | |||||||||||||||||||||||||||||||||||||||||
| Numerator: LTM net income | $ | 19.8 | $ | 83.4 | $ | 83.2 | $ | 141.6 | $ | 170.4 | $ | 19.8 | $ | 170.4 | |||||||||||||||||||||||||||
| Denominator: Five quarter average shareholders' equity | 1,247.7 | 1,324.3 | 1,403.3 | 1,447.3 | 1,471.3 | 1,247.7 | 1,471.3 | ||||||||||||||||||||||||||||||||||
| Net income ROE - LTM | 1.6 | % | 6.3 | % | 5.9 | % | 9.8 | % | 11.6 | % | 1.6 | % | 11.6 | % | |||||||||||||||||||||||||||
| Net Income Return on Equity - Annualized | |||||||||||||||||||||||||||||||||||||||||
| Numerator: Annualized net income | $ | (66.8) | $ | 81.6 | $ | (16.8) | $ | 81.2 | $ | 187.6 | $ | 19.8 | $ | 170.4 | |||||||||||||||||||||||||||
| Denominator: Two quarter average shareholders' equity | 1,095.3 | 1,144.8 | 1,274.4 | 1,425.3 | 1,490.3 | 1,298.7 | 1,428.5 | ||||||||||||||||||||||||||||||||||
| Net income ROE - Annualized | (6.1) | % | 7.1 | % | (1.3) | % | 5.7 | % | 12.6 | % | 1.5 | % | 11.9 | % | |||||||||||||||||||||||||||
| Core Return on Equity - LTM | |||||||||||||||||||||||||||||||||||||||||
| Numerator: LTM core earnings | $ | 68.1 | $ | 118.2 | $ | 113.1 | $ | 155.4 | $ | 179.0 | $ | 68.1 | $ | 179.0 | |||||||||||||||||||||||||||
Denominator: Five quarter average shareholders' equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates | 1,520.6 | 1,523.8 | 1,520.0 | 1,507.5 | 1,498.4 | 1,520.6 | 1,498.4 | ||||||||||||||||||||||||||||||||||
| Core ROE - LTM | 4.5 | % | 7.8 | % | 7.4 | % | 10.3 | % | 11.9 | % | 4.5 | % | 11.9 | % | |||||||||||||||||||||||||||
| Core Return on Equity - Annualized | |||||||||||||||||||||||||||||||||||||||||
| Numerator: Annualized core earnings | $ | (11.6) | $ | 122.0 | $ | 32.0 | $ | 130.0 | $ | 188.8 | $ | 68.1 | $ | 179.0 | |||||||||||||||||||||||||||
Denominator: Two quarter average shareholders' equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates | 1,502.1 | 1,515.6 | 1,529.9 | 1,541.4 | 1,522.0 | 1,513.9 | 1,478.5 | ||||||||||||||||||||||||||||||||||
| Core ROE - Annualized | (0.8) | % | 8.0 | % | 2.1 | % | 8.4 | % | 12.4 | % | 4.5 | % | 12.1 | % | |||||||||||||||||||||||||||
| Adjusted Core Return on Equity - LTM | |||||||||||||||||||||||||||||||||||||||||
| Numerator: LTM adjusted core earnings | $ | 81.4 | $ | 130.7 | $ | 124.9 | $ | 166.4 | $ | 189.3 | $ | 81.4 | $ | 189.3 | |||||||||||||||||||||||||||
Denominator: Five quarter average shareholders' equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates | 1,520.6 | 1,523.8 | 1,520.0 | 1,507.5 | 1,498.4 | 1,520.6 | 1,498.4 | ||||||||||||||||||||||||||||||||||
| Adjusted core ROE - LTM | 5.4 | % | 8.6 | % | 8.2 | % | 11.0 | % | 12.6 | % | 5.4 | % | 12.6 | % | |||||||||||||||||||||||||||
| Adjusted Core Return on Equity - Annualized | |||||||||||||||||||||||||||||||||||||||||
| Numerator: Annualized adjusted core earnings | $ | 2.0 | $ | 135.2 | $ | 45.2 | $ | 143.2 | $ | 199.2 | $ | 81.4 | $ | 189.3 | |||||||||||||||||||||||||||
Denominator: Two quarter average shareholders' equity excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates | 1,502.1 | 1,515.6 | 1,529.9 | 1,541.4 | 1,522.0 | 1,513.9 | 1,478.5 | ||||||||||||||||||||||||||||||||||
| Adjusted core ROE - Annualized | 0.1 | % | 8.9 | % | 3.0 | % | 9.3 | % | 13.1 | % | 5.4 | % | 12.8 | % | |||||||||||||||||||||||||||
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 21 | |||||||
Reconciliations of GAAP Measures to Non-GAAP Measures
| ($ in millions) | Twelve Months Ended | ||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | |||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||||||||||||
| Reconciliation of Book Value per Common Share to Adjusted Book Value per Common Share and Tangible Book Value per Common Share | |||||||||||||||||||||||||||||
| Shareholders' equity | $ | 1,098.3 | $ | 1,092.3 | $ | 1,197.2 | $ | 1,351.5 | $ | 1,499.0 | |||||||||||||||||||
| Less: Net unrealized investment gains (losses) on fixed maturity securities | (449.6) | (496.8) | (281.8) | 13.0 | 347.1 | ||||||||||||||||||||||||
| Less: Net reserve remeasurements attributable to discount rates | 59.0 | 73.8 | (36.9) | (205.4) | (386.9) | ||||||||||||||||||||||||
| Adjusted common shareholders' equity | 1,488.9 | 1,515.3 | 1,515.9 | 1,543.9 | 1,538.8 | ||||||||||||||||||||||||
| Less: Goodwill | 54.3 | 56.3 | 56.3 | 56.3 | 43.5 | ||||||||||||||||||||||||
| Other intangible assets | 185.2 | 192.2 | 196.4 | 200.6 | 145.4 | ||||||||||||||||||||||||
| Impact of deferred taxes | (1.6) | (0.6) | (0.8) | (0.9) | (0.4) | ||||||||||||||||||||||||
| Tangible shareholders' equity | $ | 1,251.0 | $ | 1,267.4 | $ | 1,264.0 | $ | 1,287.9 | $ | 1,350.3 | |||||||||||||||||||
| Common shares outstanding | 40.9 | 40.9 | 41.2 | 41.4 | 41.4 | ||||||||||||||||||||||||
| Book value per share | $ | 26.85 | $ | 26.71 | $ | 29.06 | $ | 32.66 | $ | 36.21 | |||||||||||||||||||
| Adjusted book value per share* | 36.40 | 37.05 | 36.80 | 37.31 | 37.17 | ||||||||||||||||||||||||
| Tangible book value per share* | 30.58 | 30.99 | 30.69 | 31.12 | 32.62 | ||||||||||||||||||||||||
| Reconciliation of Debt to Total Capitalization Ratio to Debt to Total Capitalization Ratio, Excluding Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities and Net Reserve Remeasurements Attributable to Discount Rates | |||||||||||||||||||||||||||||
| Debt to total capitalization | |||||||||||||||||||||||||||||
| Numerator: Total debt | $ | 498.0 | $ | 497.9 | $ | 497.8 | $ | 502.7 | $ | 502.6 | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Total debt | 498.0 | 497.9 | 497.8 | 502.7 | 502.6 | ||||||||||||||||||||||||
| Common shareholders' equity | 1,098.3 | 1,092.3 | 1,197.2 | 1,351.5 | 1,499.0 | ||||||||||||||||||||||||
| Total capital | 1,596.3 | 1,590.2 | 1,695.0 | 1,854.2 | 2,001.6 | ||||||||||||||||||||||||
| Debt to total capitalization | 31.2 | % | 31.3 | % | 29.4 | % | 27.1 | % | 25.1 | % | |||||||||||||||||||
| Debt to total capitalization excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates | |||||||||||||||||||||||||||||
| Numerator: Total debt | $ | 498.0 | $ | 497.9 | $ | 497.8 | $ | 502.7 | $ | 502.6 | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Total debt | 498.0 | 497.9 | 497.8 | 502.7 | 502.6 | ||||||||||||||||||||||||
| Common shareholders' equity | 1,098.3 | 1,092.3 | 1,197.2 | 1,351.5 | 1,499.0 | ||||||||||||||||||||||||
| Less: Net unrealized investment gains (losses) on fixed maturity securities | (449.6) | (496.8) | (281.8) | 13.0 | 347.1 | ||||||||||||||||||||||||
| Net reserve remeasurements attributable to discount rates | 59.0 | 73.8 | (36.9) | (205.4) | (386.9) | ||||||||||||||||||||||||
| Total capital excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates | 1,986.9 | 2,013.2 | 2,013.7 | 2,046.6 | 2,041.4 | ||||||||||||||||||||||||
| Debt to total capitalization excluding net unrealized investment gains (losses) on fixed maturity securities and net reserve remeasurements attributable to discount rates* | 25.1 | % | 24.7 | % | 24.7 | % | 24.6 | % | 24.6 | % | |||||||||||||||||||
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 22 | |||||||
Reconciliations of GAAP Measures to Non-GAAP Measures
| ($ in millions after tax) | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Reconciliation of Investment Yield, Excluding Limited Partnership Interests | |||||||||||||||||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||||||||||||||
| Total net investment income, pretax | $ | 100.2 | $ | 97.6 | $ | 105.2 | $ | 97.9 | $ | 114.1 | $ | 400.9 | $ | 422.5 | |||||||||||||||||||||||||||
| Less: Investment income on deposit asset on reinsurance | 26.1 | 26.7 | 25.8 | 24.9 | 26.0 | 103.5 | 101.1 | ||||||||||||||||||||||||||||||||||
Investment income on limited partnership interests(1) | 7.8 | 2.9 | 11.9 | 7.1 | 23.9 | 29.7 | 67.4 | ||||||||||||||||||||||||||||||||||
| FHLB interest credited | 2.0 | 3.6 | 1.6 | 0.8 | 0.8 | 8.0 | 2.9 | ||||||||||||||||||||||||||||||||||
| Adjusted net investment income, pretax | 64.3 | 64.4 | 65.9 | 65.1 | 63.4 | 259.7 | 251.1 | ||||||||||||||||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||||||||||||||
Adjusted investment portfolio, beginning of period(2) | $ | 6,031.5 | $ | 6,046.4 | $ | 6,081.2 | $ | 5,859.4 | $ | 5,882.9 | $ | 5,859.4 | $ | 5,815.6 | |||||||||||||||||||||||||||
Adjusted investment portfolio, end of period(2) | 5,976.9 | 6,031.5 | 6,046.4 | 6,081.2 | 5,859.4 | 5,976.9 | 5,859.4 | ||||||||||||||||||||||||||||||||||
| Average adjusted investment portfolio for the period | 6,004.2 | 6,039.0 | 6,063.8 | 5,970.3 | 5,871.2 | 5,918.2 | 5,837.5 | ||||||||||||||||||||||||||||||||||
Investment yield, excluding limited partnership interests, pretax - annualized(3) | 4.01 | % | 4.26 | % | 4.35 | % | 4.36 | % | 4.32 | % | 4.25 | % | 4.27 | % | |||||||||||||||||||||||||||
| Investment yield, excluding limited partnership interests, after tax - annualized(3)(4) | 3.19 | % | 3.40 | % | 3.46 | % | 3.47 | % | 3.44 | % | 3.38 | % | 3.40 | % | |||||||||||||||||||||||||||
(1) Excludes investment income on commercial mortgage loan funds.
(2) Represents the carrying amount of the total investment portfolio as presented in the Consolidated Balance Sheets adjusted to exclude the carrying amount of FHLB funding agreements, the carrying amount of limited partnership interests (excluding the carrying amount of commercial mortgage loan funds) and gross unrealized investment gains (losses) on fixed maturity securities.
(3) For each of the three month periods presented, investment yields are calculated by annualizing the result of year-to-date net investment income divided by the average quarter-end and beginning of quarter carrying amount of invested assets. For the periods ended December 31, 2022 and 2021 presented, investment yields are calculated by (i) summing the investment yields for each respective three month period applicable to the period and (ii) dividing that sum per the calculation in (i) by four.
(4) Investment yield, excluding limited partnership interests, after tax - annualized is calculated using the effective tax rate in effect for each applicable period.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 23 | |||||||
Reconciliations of GAAP Measures to Non-GAAP Measures
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Operating Ratios - Property & Casualty | |||||||||||||||||||||||||||||||||||||||||
| Property & Casualty | |||||||||||||||||||||||||||||||||||||||||
| Claims and claims expense ("loss") ratio | 98.6 | 80.2 | 100.2 | 72.1 | 71.6 | 87.9 | 72.5 | ||||||||||||||||||||||||||||||||||
| Expense ratio | 29.4 | 27.3 | 26.7 | 26.3 | 28.3 | 27.4 | 26.7 | ||||||||||||||||||||||||||||||||||
| Combined ratio | 128.0 | 107.5 | 126.9 | 98.4 | 99.9 | 115.3 | 99.2 | ||||||||||||||||||||||||||||||||||
| Loss ratio | 98.6 | 80.2 | 100.2 | 72.1 | 71.6 | 87.9 | 72.5 | ||||||||||||||||||||||||||||||||||
| Less: Effect of catastrophe losses | 8.0 | 9.6 | 30.5 | 4.8 | 7.2 | 13.0 | 12.7 | ||||||||||||||||||||||||||||||||||
Effect of prior years' reserve development(1) | 9.0 | 1.3 | 4.0 | — | — | 3.6 | (1.2) | ||||||||||||||||||||||||||||||||||
| Underlying loss ratio* | 81.6 | 69.3 | 65.7 | 67.3 | 64.4 | 71.3 | 61.0 | ||||||||||||||||||||||||||||||||||
| Reconciliation of combined ratio to underlying combined ratio | |||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 128.0 | 107.5 | 126.9 | 98.4 | 99.9 | 115.3 | 99.2 | ||||||||||||||||||||||||||||||||||
| Effect of catastrophe losses | 8.0 | 9.6 | 30.5 | 4.8 | 7.2 | 13.0 | 12.7 | ||||||||||||||||||||||||||||||||||
Effect of prior years' reserve development(1) | 9.0 | 1.3 | 4.0 | — | — | 3.6 | (1.2) | ||||||||||||||||||||||||||||||||||
| Underlying combined ratio* | 111.0 | 96.6 | 92.4 | 93.6 | 92.7 | 98.7 | 87.7 | ||||||||||||||||||||||||||||||||||
| Auto | |||||||||||||||||||||||||||||||||||||||||
| Claims and claims expense ("loss") ratio | 114.5 | 83.1 | 93.2 | 76.0 | 79.9 | 91.8 | 69.4 | ||||||||||||||||||||||||||||||||||
| Expense ratio | 29.1 | 27.7 | 26.1 | 25.8 | 28.5 | 27.2 | 26.7 | ||||||||||||||||||||||||||||||||||
| Combined ratio | 143.6 | 110.8 | 119.3 | 101.8 | 108.4 | 119.0 | 96.1 | ||||||||||||||||||||||||||||||||||
| Loss ratio | 114.5 | 83.1 | 93.2 | 76.0 | 79.9 | 91.8 | 69.4 | ||||||||||||||||||||||||||||||||||
| Less: Effect of catastrophe losses | 0.5 | 2.7 | 3.9 | 0.5 | 0.6 | 1.8 | 1.6 | ||||||||||||||||||||||||||||||||||
Effect of prior years' reserve development(1) | 14.2 | 2.0 | 12.4 | — | — | 7.2 | (1.2) | ||||||||||||||||||||||||||||||||||
| Underlying loss ratio* | 99.8 | 78.4 | 76.9 | 75.5 | 79.3 | 82.8 | 69.0 | ||||||||||||||||||||||||||||||||||
| Reconciliation of combined ratio to underlying combined ratio | |||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 143.6 | 110.8 | 119.3 | 101.8 | 108.4 | 119.0 | 96.1 | ||||||||||||||||||||||||||||||||||
| Effect of catastrophe losses | 0.5 | 2.7 | 3.9 | 0.5 | 0.6 | 1.8 | 1.6 | ||||||||||||||||||||||||||||||||||
Effect of prior years' reserve development(1) | 14.2 | 2.0 | 12.4 | — | — | 7.2 | (1.2) | ||||||||||||||||||||||||||||||||||
| Underlying combined ratio* | 128.9 | 106.1 | 103.0 | 101.3 | 107.8 | 110.0 | 95.7 | ||||||||||||||||||||||||||||||||||
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Reconciliations of GAAP Measures to Non-GAAP Measures
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| Operating Ratios - Property & Casualty (Cont.) | |||||||||||||||||||||||||||||||||||||||||
| Property | |||||||||||||||||||||||||||||||||||||||||
| Claims and claims expense ("loss") ratio | 70.9 | 75.1 | 113.0 | 65.0 | 56.6 | 80.7 | 78.5 | ||||||||||||||||||||||||||||||||||
| Expense ratio | 30.1 | 26.8 | 28.0 | 27.3 | 28.1 | 28.1 | 26.9 | ||||||||||||||||||||||||||||||||||
| Combined ratio | 101.0 | 101.9 | 141.0 | 92.3 | 84.7 | 108.8 | 105.4 | ||||||||||||||||||||||||||||||||||
| Loss ratio | 70.9 | 75.1 | 113.0 | 65.0 | 56.6 | 80.7 | 78.5 | ||||||||||||||||||||||||||||||||||
| Less: Effect of catastrophe losses | 21.0 | 21.8 | 79.7 | 12.7 | 19.3 | 33.4 | 33.6 | ||||||||||||||||||||||||||||||||||
Effect of prior years' reserve development(1) | — | — | (11.4) | — | — | (2.8) | (1.0) | ||||||||||||||||||||||||||||||||||
| Underlying loss ratio* | 49.9 | 53.3 | 44.7 | 52.3 | 37.3 | 50.1 | 45.9 | ||||||||||||||||||||||||||||||||||
| Reconciliation of combined ratio to underlying combined ratio | |||||||||||||||||||||||||||||||||||||||||
| Combined ratio | 101.0 | 101.9 | 141.0 | 92.3 | 84.7 | 108.8 | 105.4 | ||||||||||||||||||||||||||||||||||
| Effect of catastrophe losses | 21.0 | 21.8 | 79.7 | 12.7 | 19.3 | 33.4 | 33.6 | ||||||||||||||||||||||||||||||||||
Effect of prior years' reserve development(1) | — | — | (11.4) | — | — | (2.8) | (1.0) | ||||||||||||||||||||||||||||||||||
| Underlying combined ratio* | 80.0 | 80.1 | 72.7 | 79.6 | 65.4 | 78.2 | 72.8 | ||||||||||||||||||||||||||||||||||
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 25 | |||||||
Ratings and Contact Information
| Address: | March 31, 2023 | Insurance Financial Strength Ratings (Outlook) | Debt Ratings (Outlook) | Affirmed/Reviewed | ||||||||||||||||||||||||||||
| 1 Horace Mann Plaza | A.M. Best | |||||||||||||||||||||||||||||||
| Springfield, IL 62715 | HMEC (parent company) | N.A. | bbb | (stable) | 7/28/2022 | |||||||||||||||||||||||||||
| HMEC's Life & Retirement subsidiaries | A | (stable) | N.A. | 7/28/2022 | ||||||||||||||||||||||||||||
| Corporate Website: | HMEC's Property & Casualty subsidiaries | A | (stable) | N.A. | 7/28/2022 | |||||||||||||||||||||||||||
| www.horacemann.com | HMEC's Supplemental & Group Benefits subsidiaries | |||||||||||||||||||||||||||||||
| Madison National Life Insurance Company | A- | (stable) | N.A. | 7/28/2022 | ||||||||||||||||||||||||||||
| Contact: | National Teachers Associates Life Insurance Company | A | (stable) | N.A. | 7/28/2022 | |||||||||||||||||||||||||||
| Heather J. Wietzel | Fitch | A | (stable) | BBB | (stable) | 10/18/2022 | ||||||||||||||||||||||||||
| Vice President | Moody's | |||||||||||||||||||||||||||||||
| Investor Relations | HMEC (parent company) | Baa2 | (stable) | 8/3/2022 | ||||||||||||||||||||||||||||
| Phone: 217-788-5144 | HMEC's Life Group | A2 | (stable) | 7/27/2022 | ||||||||||||||||||||||||||||
| Heather.Wietzel@horacemann.com | HMEC's P&C Group | A2 | (stable) | 8/3/2022 | ||||||||||||||||||||||||||||
| S&P | A | (stable) | BBB | (stable) | 2/14/2022 | |||||||||||||||||||||||||||
| Transfer Agent | ||||||||||||||||||||||||||||||||
| American Stock Transfer & Trust Company | ||||||||||||||||||||||||||||||||
| 6201 15th Avenue | ||||||||||||||||||||||||||||||||
| Brooklyn, NY 11219 | ||||||||||||||||||||||||||||||||
| Phone: 800-937-5449 | ||||||||||||||||||||||||||||||||
| E-mail: help@astfinancial.com | ||||||||||||||||||||||||||||||||
| Corporate Website: https://us.astfinancial.com/ShareHolder/GeneralAccountInformation | ||||||||||||||||||||||||||||||||
COMMON STOCK
Common stock of Horace Mann Educators Corporation is traded on the New York Stock Exchange under the symbol "HMN".
This report is for information purposes only. It should be read in conjunction with documents filed by Horace Mann Educators Corporation with the U.S. Securities and Exchange Commission, including the most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
Horace Mann Educators Corporation I Fourth-Quarter 2022 Investor Supplement - Recast | Page 26 | |||||||