HORACE MANN EDUCATORS CORP /DE/
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 7, 2025
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Supplemental & Group Benefits
The Supplemental & Group Benefits segment markets group solutions for districts and other public employers, as well as individual supplemental products typically distributed through the employer channel. The Supplemental & Group Benefits segment provides group term life, disability and specialty health insurance, along with supplemental products including cancer, heart, hospital, supplemental disability and accident coverages. The Supplemental & Group Benefits segment represented 18% of total revenues in 2024.
Higher premium earned reflecting investment to grow the book of business
Lower benefits ratio for Group Benefits for the quarter and higher benefits ratio for the year
Higher operating expenses due to investment in growth
| Horace Mann Educators Corporation | 51 | Third Quarter 2025 Form 10-Q |
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The following table provides certain information for Supplemental & Group Benefits for the periods indicated.
| ($ in millions) | Three Months EndedSeptember 30, | 2025-2024 | Nine Months EndedSeptember 30, | 2025-2024 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2025 · 2024 · % Change · 2025 · 2024 · % Change | ||||||||||
| Supplemental & Group Benefits | ||||||||||
| Revenues | ||||||||||
| Net premiums and contract charges earned | $66.4 | $62.7 | 5.9% | $199.2 | $190.6 | 4.5% | ||||
| Net investment income(1) | 11.1 | 10.1 | 9.9% | 27.6 | 28.4 | -2.8% | ||||
| Other income | (1.9) | (0.4) | -375.0% | (4.9) | (4.6) | -6.5% | ||||
| Total revenues | 75.6 | 72.4 | 4.4% | 221.9 | 214.4 | 3.5% | ||||
| Benefits and Expenses | ||||||||||
| Benefits, settlement expenses and change in reserves | 20.6 | 22.6 | -8.8% | 72.7 | 70.1 | 3.7% | ||||
| Operating expenses (including DAC amortization expense) | 32.5 | 27.5 | 18.2% | 95.1 | 82.8 | 14.9% | ||||
| Intangible asset amortization expense | 3.5 | 3.5 | —% | 10.6 | 10.7 | -0.9% | ||||
| Total benefits and expenses | 56.6 | 53.6 | 5.6% | 178.4 | 163.6 | 9.0% | ||||
| Income before income taxes | 19.0 | 18.8 | 1.1% | 43.5 | 50.8 | -14.4% | ||||
| Income tax expense | 4.0 | 4.0 | —% | 9.4 | 10.9 | -13.8% | ||||
| Net income | 15.0 | 14.8 | 1.4% | 34.1 | 39.9 | -14.5% | ||||
| Core earnings* | 17.7 | 17.6 | 0.6% | 45.1 | 48.4 | -6.8% | ||||
| Benefits ratio | 30.9% | 36.0% | -5.1 | pts | 36.5% | 36.8% | -0.3 | pts | ||
| Operating expense ratio | 43.1% | 37.9% | 5.2 | pts | 42.9% | 38.6% | 4.3 | pts | ||
| Pretax profit margin | 25.1% | 26.0% | -0.9 | pts | 19.6% | 23.7% | -4.1 | pts | ||
| Individual supplemental products benefits ratio | 25.4% | 27.8% | -2.4 | pts | 27.1% | 28.9% | -1.8 | pts | ||
| Individual supplemental premium persistency (rolling beginning 12 months) | 89.6% | 90.8% | -1.2 | pts | 89.6% | 90.8% | -1.2 | pts | ||
| Group benefits products benefits ratio | 35.7% | 43.6% | -7.9 | pts | 44.7% | 43.9% | 0.8 | pts | ||
| Group benefits covered lives (in thousands) | 865 | 842 | 2.7% | |||||||
(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.
Supplemental & Group Benefits segment net income for the three and nine months ended September 30, 2025, of $15.0 million and $34.1 million, was up $0.2 million and down $5.8 million, respectively. The Individual Supplemental benefits ratio decreased 2.4 points and 1.8 points for the three and nine months ended as we continue to see favorable policyholder utilization trends relative to our long-term expectations. The Group Benefits benefit ratio decreased 7.9 points and increased 0.8 points for the three and nine months due to favorable policy utilization during the quarter and slightly elevated for the year. Operating expense increase reflects inflation and investments being made in growth initiatives and infrastructure.
Excluding the reduction in net investment income due to an immaterial out-of-period correction of an error of $3.5 million ($2.8 million after tax), net investment income increased $2.7 million for the nine months ended September 30, 2025.
Total sales* for the three and nine months ended September 30, 2025 increased $4.7 million with Individual Supplemental product sales increasing $1.7 million and Group Benefits products increasing $3.0 million. Individual Supplemental sales increased 40.5% and Group Benefits sales increased 90.9% due to our strategic investments to drive growth. Variability in sales between comparable periods is typical for Group Benefits given the relatively small scale and the longer sales cycle of this business. Persistency remains strong for the segment.
| Horace Mann Educators Corporation | 52 | Third Quarter 2025 Form 10-Q |
|---|
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