HORACE MANN EDUCATORS CORP /DE/

The Property & Casualty segment primarily markets private passenger auto insurance and residential home insurance. Horace Mann offers standard auto coverages, including liability, collision and comprehensive. Property coverage includes both homeowners and renters policies. For both auto and property coverage, Horace Mann offers educators a discounted rate and the Educator Advantage® package of features. The Property & Casualty segment represented 49% of total revenues in 2024.

•Increases in average written premium per policy

•Lower underlying loss ratio*

•Catastrophe losses lower than prior year by 13.3 points and 7.5 points for the three and nine months, respectively

•Higher net investment income driven by limited partnership portfolio and the fixed income portfolio

The following table provides certain financial information for Property & Casualty for the periods indicated.

(1)(Favorable) unfavorable.

The Property & Casualty segment three and nine month net income of $31.8 million and $75.1 million, as well as the three month and six month combined ratio of 87.8% and 91.4%, respectively, reflected improved current year underlying results and catastrophe losses below prior year and recent prior periods.

The current quarter reflects an increase in net premiums written* of 9.3%, with average written premiums* rising for both property and auto. Sales* were steady for the quarter, up 5.4% from the prior year, and household retention remains in line with expectations.

The three and nine month loss ratios decreased 11.7 and 12.8 points from last year reflecting higher average premiums and catastrophe losses that were below recent prior periods. In addition, $3.0 million and $13.8 million of net favorable prior years' reserve development for the three and nine months reduced the loss ratio 1.5 and 2.3 points, respectively. Catastrophe losses for the quarter were $9.9 million, pretax, contributing 4.8 points to the combined ratio. In total, there were 14 events designated as catastrophes by Property Claims Services (PCS) in this year’s third quarter. The lower catastrophe losses are driven by lower frequency and severity of policyholder claims. In the third quarter of 2024, catastrophe losses were $34.0 million, pretax, contributing 18.1 points to the combined ratio, from 20 PCS events.

The year-over-year increase in average written premiums* for auto policies remained elevated in the third quarter at 6.6%, with retention consistent with the second quarter, and in line with expectations, given the rate actions the Company has taken. The third-quarter auto underlying loss ratio* was 66.6%, improving 4.9 points from the prior year quarter, reflecting the benefit of higher average earned premium. The third quarter reported loss ratio benefited 0.2 points from favorable prior years' reserve development.

The year-over-year increase in average written premiums* for property policies was 13.8% in the third quarter, as rate increases and inflation adjustments to coverage values continue to take effect. Policyholder retention remains strong. The third-quarter property underlying loss ratio* was 41.2%, a 0.2 point decrease from prior year reflecting the increase in average earned premium*. The third quarter reported loss ratio benefited 3.6 points from favorable prior years' reserve development.