HORACE MANN EDUCATORS CORP /DE/

The Life & Retirement segment markets 403(b) tax-qualified fixed, fixed indexed and variable annuities; the Horace Mann Retirement Advantage® open architecture platform for 403(b)(7) and other defined contribution plans; and other retirement products to educators as well as traditional term and whole life insurance products. Horace Mann is one of the largest participants in the K-12 educator portion of the 403(b) tax-qualified annuity market, measured by 403(b) net premiums written on a statutory accounting basis. The Life & Retirement segment represented 34% of total revenues in 2024.

•Benefits expense in Life decreased due to annual assumption updates related to mortality for both comparisons

•Annualized quarterly and nine month net interest spread on fixed annuities up 3 basis points and 28 basis points, respectively

•Higher operating expenses due to growth

The following table provides certain information for Life & Retirement for the periods indicated.

(1) In the second quarter of 2025, the Company recorded a reduction in net investment income due to an immaterial out-of-period correction of an error. See additional disclosure contained in Note 1 of the September 30, 2025 Form 10-Q.

Life & Retirement segment net income for the three and nine months ended September 30, 2025, of $16.9 million and $43.7 million was up 14.2% and 12.6%, primarily due to favorable benefits in the Life segment for both comparisons and higher net investment income for the nine month comparison. Life benefits reflected favorable assumption changes related to mortality costs in the current quarter compared to the prior year. On a year-to-date basis, mortality costs remain within our expected actuarial range. The net spread increase reflects lower borrowing costs and increased advances from our FHLB funding agreements compared with 2024. Excluding the reduction in net investment income due to an immaterial out-of-period correction of an error of $6.7 million ($5.3 million after tax), net investment income increased $10.9 million for the nine months ended September 30, 2025.

For the Retirement business, net annuity contract deposits were up 9.3% for the quarter at $138.6 million. Educators continue to begin their relationship with Horace Mann through 403(b) retirement savings products, which provide encouraging cross-sell opportunities. Average persistency rose from the prior period to 92.0%.

Horace Mann currently has $5.9 billion in annuity assets under management, including $2.2 billion of fixed annuities, $3.3 billion of variable annuities and $0.4 billion of fixed indexed annuities. Assets under administration, which includes Horace Mann Retirement Advantage® and other advisory and recordkeeping assets, were up due to the effect of equity market performance on assets.

Life annualized sales* were $2.9 million for the quarter. Persistency remains strong. Life insurance in force rose to $21.4 billion at quarter-end.

We actively manage our interest rate risk exposure, considering a variety of factors, including earned interest rates, credited interest rates and the relationship between the expected durations of assets and liabilities. We estimate that over the next 12 months approximately $833.6 million of the Life & Retirement investment portfolio and related investable cash flows will be reinvested at current market rates.

As a general guideline, based on our existing policies and investment portfolio, the impact from a 100 basis point decline in the average reinvestment rate would reduce Life & Retirement net investment income by approximately $2.6 million in year one, reducing the annualized net interest spread on fixed annuities by approximately 10 basis points, compared to the current period annualized net interest spread on fixed annuities. We could also consider potential changes in rates credited to policyholders, tempered by any restrictions on the ability to adjust policyholder rates due to guaranteed minimum crediting rates.