HORACE MANN EDUCATORS CORP /DE/

In 2025, we conducted our business across four reporting segments. The three reporting segments representing the major lines of business are: Property & Casualty, Life & Retirement, and Supplemental & Group Benefits. We do not allocate the impact of corporate-level transactions to these reporting segments, consistent with the basis for management's evaluation of the results in those segments, but classify those items in the fourth reporting segment, Corporate & Other.

These segments are defined based on the way management organizes the business for making operating decisions and assessing performance. Management maintains discrete financial information for these segments to evaluate performance and allocate resources.

The calculations of segment data are described in more detail in Part II - Item 8, Note 17 of the Consolidated Financial Statements in this Annual Report on Form 10-K. Additionally, the business operations of each segment are explained in this section. The financial performance of each segment is discussed in Part II - Item 7 of this Annual Report on Form 10-K.

Property & Casualty segment

The Property & Casualty segment's primary insurance products include private passenger auto insurance, residential home insurance, and personal umbrella insurance.

We offer standard auto coverages, including liability, collision and comprehensive. Property coverage includes both homeowners and renters policies. For both auto and property coverage, we offer educators a discounted rate and the Educator Advantage® package of features. This includes value-added benefits specifically for educators, such as liability coverage for transporting students in an insured vehicle and reimbursement for stolen school fundraising items.

We have third-party programs in a majority of states to provide higher-risk auto and property coverages. We also have a number of other insurance coverages with third-party vendors that underwrite and bear the risk of such insurance. We receive commissions on these risks.

Similarly, we have increased our offering of third-party partner products in many areas to meet additional educator needs such as coverage for small business owners or classic/collector autos.

326,040 auto risks in force and

163,711 property risks in force at December 31, 2025.

Geographic distribution

Our Property & Casualty business is geographically diversified. For the year ended December 31, 2025, based on direct premiums for all product lines, the top five states and their portion of total direct insurance premiums were California, 15.4%; Texas, 9.2%; North Carolina, 7.6%; Minnesota, 6.2%; and Georgia, 4.9%.

Competition in this market for personal protection products is from a number of national providers of personal lines insurance, including Allstate, Farmers, Liberty Mutual, Nationwide and State Farm, as well as a number of regional companies. We also compete for auto business with other companies such as GEICO, Progressive and USAA, many of which feature direct marketing distribution. A number of technology start-ups have also entered the market.

In our target market, we believe that our principal competitive advantages in the sale of property and casualty products are overall service, school partnerships, price, and name recognition.

$804.4 million in direct premiums, defined as premiums earned before reinsurance as determined under statutory accounting principles. Our Property & Casualty subsidiaries are licensed to write business in 49 states and the District of Columbia.

Catastrophe Losses (Pretax)(1)

The number of catastrophe events and the level of catastrophe losses can fluctuate significantly from year to year. Our catastrophe losses for the last five years are shown in the following table ($ in millions).

(1)Net of reinsurance and before income tax benefits. Includes allocated loss adjustment expenses.

Fluctuations in catastrophe losses impact a property and casualty insurance company's claims and claim adjustment expenses incurred.

Claims and Claim Expenses Incurred(1), 2023 - 2025 ($ in millions)

(1) Claims and claim expenses incurred include the impact of prior years' reserve development as quantified in Property & Casualty reserves. Catastrophe totals are net of reinsurance and before income tax benefits.

Property & Casualty Reserves

Property & Casualty unpaid claims and claim expense reserves (reserves) represent management's best estimate of ultimate unpaid costs of losses and settlement expenses for reported claims and claims that have been incurred but not yet reported (IBNR). We calculate and record a single best estimate of the reserve as of each reporting date in conformity with actuarial standards of practice. We engage an independent property and casualty actuarial consulting firm to prepare an independent study of our Property & Casualty reserves as of December 31 of each year. For additional information regarding the process used to estimate Property & Casualty reserves and the risk factors involved, as well as a summary reconciliation of the beginning and ending Property & Casualty insurance claims and claim expense reserves and prior years' reserve development recorded in each of the three years ended December 31, 2025, see Part I - Item 1A - Risk Factors - "Our property and casualty loss reserves may not be adequate", Part II - Item 7, Application of Critical Accounting Estimates and Results of Operations for the Property & Casualty Segment, and Part II - Item 8, Note 5 in the Consolidated Financial Statements of this Annual Report on Form 10-K.

All of our reserves for Property & Casualty unpaid claims and claim expenses are carried at the full value of estimated liabilities and are not discounted for interest expected to be earned on the reserves.

Property & Casualty Reinsurance

All reinsurance is obtained through contracts which generally are entered into for each calendar year. Although reinsurance does not legally discharge us from primary liability for the full amount of our risks, it does allow for recovery from assuming reinsurers to the extent of the reinsurance ceded. Past due reinsurance recoverables as of December 31, 2025 were not material.

We maintain catastrophe excess of loss reinsurance coverage. For 2025, our catastrophe excess of loss reinsurance coverage consisted of one contract in addition to a minimal amount of coverage by the Florida Hurricane Catastrophe Fund. For 2025, our retention was $35.0 million and the catastrophe excess of loss reinsurance coverage provided 95% coverage for the layers of $25.0 million excess of $35.0 million, $35.0 million excess of $60.0 million, and $90.0 million excess of $95.0 million. For 2026, our retention will remain at $35.0 million and the catastrophe excess of loss reinsurance coverage will provide 95% coverage for the layers of $25.0 million excess of $35.0 million, $35.0 million excess of $60.0 million, $90.0 million excess of $95.0 million, and $55.0 million excess of $185.0 million.

The following table identifies our most significant reinsurers under the catastrophe first event excess of loss reinsurance program, their percentage participation in this program and their ratings by A.M. Best Company (A.M. Best) and Standard & Poor's Global Inc. (S&P) as of January 1, 2026. No other single reinsurer's percentage participation in 2026 or 2025 exceeds 5%. We monitor reinsurers' financial strength by reviewing A.M. Best and S&P ratings. For 2026 and 2025, all catastrophe reinsurance participants have an AM Best or S&P rating of A or higher.

NR - Not rated.

N/A - Not applicable.

We have not joined the California Earthquake Authority (CEA). Our exposure to losses from earthquakes is managed through our underwriting standards, our earthquake policy coverage limits and deductible levels, and the geographic distribution of our business, as well as our reinsurance program. After reviewing the exposure to earthquake losses from our own risks and from what it would be with participation in the CEA, including estimated start-up and ongoing costs related to CEA participation, we believe it is in our best economic interest to offer earthquake coverage directly to our property policyholders.

For liability coverages in 2025, we reinsured each loss above a retention of $5.0 million per occurrence up to $20.0 million in a clash event. A clash cover is a reinsurance casualty excess contract requiring two or more casualty coverages or risks issued by us to be involved in the same loss occurrence for coverage to apply. The clash event coverage is unchanged for 2026.

We market personal lines excess liability risks. The limits of these risks are $1.0 million to $5.0 million in excess of $0.5 million of underlying auto and homeowners liability coverage. In 2025, we reinsured risks on a quota share basis with Renaissance Reinsurance and Swiss Reinsurance who each assume 25% of losses for a total of 50%, including allocated loss adjustment expenses and premiums for all states. Policies written in 2026 will be subject to a 55% quota share with Renaissance Reinsurance and Swiss Reinsurance each assuming a 25% quota share and DEVK Rueckversicherungs assuming 5%.

For auto insurance sold in Michigan, Personal Injury Protection (PIP) unlimited coverage is offered in compliance with Michigan state law. For these risks with unlimited coverage, we participate in the Michigan Catastrophic Claims Association (MCCA). For risks issued in 2025, MCCA reimbursed PIP losses including allocated loss adjustment expenses in excess of $0.6 million.

Our property and casualty insurance subsidiaries are members of an intercompany pooling arrangement. Pooling arrangements permit the participating companies to rely on the capacity of the entire pool's statutory capital and surplus rather than just on its own statutory capital and surplus. Under such arrangements, the members share substantially all insurance business that is written and allocate the combined premiums, losses, and expenses.

Life & Retirement segment

Our 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; traditional term and whole life insurance products and indexed universal life (IUL) products. We offer educator rates for our life insurance customers.

Educators in our target market continue to benefit from the provisions of Section 403(b) of the Internal Revenue Code (Code) which allows public school employees and employees of other tax-exempt organizations, such as not-for-profit private schools, to utilize pretax income to make periodic contributions to a qualified retirement plan (also see Regulation - Regulation at Federal Level).

We are one of the largest participants in the K-12 educator portion of the 403(b) tax-qualified annuity market, measured by 403(b) net written premium on a statutory accounting basis. Our 403(b) tax-qualified annuities are voluntarily purchased by individuals employed by public school systems or other tax-exempt organizations through employee benefit plans of those entities.

In 2025, 43.7% of net annuity contract deposits* were for 403(b) tax-qualified annuities. At year-end 2025, 55.0% of accumulated annuity value on deposit was 403(b) tax-qualified. To further assist registered representatives in delivering our value proposition, we have agreements with third-party vendors to market 529 college savings programs and provide brokerage clearing arrangements.

We offer a lineup of several life product portfolios. Life by Design® is a portfolio of our manufactured and branded life insurance products that specifically address the financial planning needs of educators. The Life by Design® portfolio features individual whole life and individual term products, including 10, 15, 20 and 30-year level term policies. The Life by Design® policies have premiums that are guaranteed for the duration of the contract.

We offer a combination product called Life Select® that mixes a base of either traditional whole life, 20-pay life or life paid-up at age 65 with a variety of term riders to allow for more flexibility in tailoring the coverage to customers' varying life insurance needs. Additional products include single premium whole life products and Cash Value Term — a term policy that builds cash value while providing the income protection of traditional level term life insurance.

We offer an IUL product with interest crediting strategies linked to the S&P 500 Index and the Dow Jones Industrial Average (DJIA), offering a contingent return based on equity market performance. Along with our current product offerings, we continue to introduce new marketing support tools to aid the agency force.

We also maintain a closed block of Experience Life® policies. This product, discontinued in 2006, represents a flexible premium life insurance contract consisting mainly of whole life and term elements, along with an interest bearing policy account.

During 2025, the average face amount of individual life insurance policies issued by us was approximately $213,000 and the average face amount of individual life insurance policies in force at December 31, 2025 was approximately $134,000. Life insurance in force rose to $21.5 billion at year-end.

Retirement assets under management

We market both fixed and variable annuity contracts, primarily on a tax-qualified basis. Total accumulated fixed and variable annuity cash value on deposit at December 31, 2025 was $5.9 billion, net of reinsurance.

Fixed-only annuities provide a guarantee of principal and a guaranteed minimum rate of return. These contracts are backed by our general account investments. We bear the investment risk associated with the investments and may change the declared interest rate on these contracts subject to contract guarantees.

We also offer fixed indexed annuity (FIA) products with interest crediting strategies linked to the S&P 500 Index and the DJIA.

213,137 annuity contracts in force at December 31, 2025.

Variable annuities combine a fixed account option with equity-linked and bond-linked sub-account options. By utilizing tools that provide assistance in determining needs and making asset allocation decisions, contractholders are able to choose the investment mix that matches their personal risk tolerance and retirement goals. As of December 31, 2025, we had 119 variable sub-account options including funds managed by some of the larger participants in the mutual fund industry.

Annuities are marketed under the Personal Retirement Planner annuity series, which includes a flexible premium deferred variable annuity, a flexible premium deferred fixed indexed annuity, a single premium deferred fixed annuity and a single premium immediate annuity. There are no surrender charges for early withdrawal across this series.

We also have funding agreements as part of our participation in the Federal Home Loan Bank (FHLB) program that provide an additional source of spread-based income.

Retirement assets under administration

In addition to annuities, we market the Horace Mann Retirement Advantage® open architecture platform for 403(b)(7) and other defined contribution plans. This platform combines a wide array of mutual funds integrated with a group unallocated fixed annuity stable value fund. This platform provides us with greater flexibility to offer customized 403(b)(7) and other qualified plan solutions to better meet the needs of school districts and other non-for-profit plan sponsors. In 2019, we acquired a recordkeeping administrator, Benefit Consultants Group, Inc. (BCG) and we migrated the administration of our Horace Mann Retirement Advantage® platform from a third-party vendor to the BCG platform. We offer our group unallocated fixed annuity and Horace Mann Stable Value Solution, as an option within a number of the 401(k) plans administered by BCG. BCG had $1.0 billion of recordkeeping assets under administration as of December 31, 2025.

Retirement Assets Under Administration, 2023 - 2025 ($ in billions)

Geographic distribution

Our Life & Retirement business is geographically diversified. For the year ended December 31, 2025, based on direct premiums and contract deposits for all product lines, the top five states and their portion of total direct premiums and contract deposits were Pennsylvania, 8.6%; Indiana, 6.5%; Minnesota, 5.9%; Texas, 5.1%; and California, 5.0%.

National providers of annuities and other financial service platforms that serve the retirement needs of educators and others that serve the community, include AXA; Life Insurance Company of the Southwest, a subsidiary of National Life Insurance Company; Security Benefit; Teachers Insurance and Annuity Association – College Retirement Equities Fund; The Variable Annuity Life Insurance Company, a subsidiary of Corebridge Financial; and Voya Financial, Inc. Select mutual fund families and financial planners also compete in this marketplace.

We believe that our principal competitive advantages in the sale of retirement products and life insurance are school-based sales and service, product features, perceived stability of the insurer, price, overall service and name recognition.

$639.2 million in direct premiums and contract deposits, defined as premiums collected before reinsurance as determined under statutory accounting principles. Our principal life subsidiary is licensed to write business in 49 states and the District of Columbia.

The market for tax-deferred retirement products in our target market was impacted by the revised Code Section 403(b) regulations, which made the 403(b) market more comparable to the 401(k) market than it was in the past. This change made the 403(b) market more attractive to some of the larger companies experienced in 401(k) plans, including both insurance and mutual fund companies, that had not previously been active competitors in this business.

Annuity Reinsurance

We reinsure a $3.1 billion block of in force fixed and variable annuity business with a minimum crediting rate of 4.5%. The reinsured fixed business represents approximately 50% of our in force fixed annuity account balances. The arrangement contains investment guidelines and a trust to help meet our risk management objectives. Under the annuity reinsurance agreement, approximately $2.3 billion of fixed annuity reserves are reinsured on a coinsurance basis. The separate account assets and liabilities of approximately $0.8 billion are reinsured on a modified coinsurance basis and thus, remain on our consolidated financial statements, but the related results of operations are fully reinsured. The annuity reinsurance agreement does not expose the reinsurer (RGA Reinsurance Company, a subsidiary of Reinsurance Group of America, Incorporated) to a reasonable possibility of a significant loss from insurance risk. Therefore, we recognize the annuity reinsurance agreement using the deposit method of accounting.

Life Reinsurance

The maximum individual life insurance risk retained by our Life segment is $500,000 on any individual life. The excess of the amounts retained are reinsured with life reinsurers that are rated A (Excellent) or above by A.M. Best. We also maintain a life catastrophe reinsurance program. In 2025, we reinsured 100% of the catastrophe risk in excess of $1.0 million up to $35.0 million per occurrence, with one reinstatement. For 2026, our catastrophe risk coverage is unchanged. Our life catastrophe risk reinsurance program covers acts of terrorism and includes nuclear, biological and chemical explosions but excludes other acts of war.

Supplemental & Group Benefits segment

The Supplemental & Group Benefits segment offers employer-sponsored group coverage including accident, critical illness, limited-benefit fixed indemnity insurance, term life, short-term disability and long-term disability. Additionally, we offer individual supplemental products including heart, cancer, disability and accident coverages. We also have funding agreements as part of our participation in the FHLB program that provide an additional source of spread-based income.

The Supplemental & Group product portfolio is designed to help districts and other employers improve recruitment and retention. As the competition for top talent intensifies, public sector employers are increasingly looking to offer benefits that are competitive with those of the private sector. The products we provide are part of a typical "total rewards" compensation package, including some products paid by the employer and provided to groups of employees, as well as products that employees can select as part of their benefit enrollment process.

275,183 total Supplemental policies in force and 874,556 total Group covered lives at December 31, 2025

Group products may be purchased by employers to include in benefit packages for all employees or offered as a voluntary option for employees to purchase. Our typical group products are guaranteed issue, meaning no individual underwriting is required; in some instances an employee can apply for and purchase expanded coverage with individual medical underwriting. Group products can be customized to complement each employer's benefit package features. These group products typically have minimum participation rates and are underwritten at the group level to account for population size, industry, gender and age distribution, and other applicable risk factors.

Our typical supplemental policies provide "HIPAA Excepted" benefits with simplified underwriting. They are most often purchased after face-to-face consultation and discussion in the workplace, often during a benefit enrollment process. Payment for supplemental products can be made directly to Horace Mann via recurring bank draft, credit card, or payroll deduction. These products offer defined benefit amounts that are paid directly to the insured, and are payable in addition to any other insurance coverages. An insured can use the supplemental benefit payments to cover medical or non-medical costs.

Supplemental products remain an important tool in the changing healthcare landscape, particularly with the prevalence of high deductible health care plans and an increasing focus on employee health and wellness. Our supplemental products offer indemnity benefits rather than the reimbursement of actual costs. Benefit risks are well controlled with specified limitations regarding preexisting conditions, the frequency of occurrences, maximum benefits per occurrence, and maximum occurrences. Diagnosis or treatment is a required element when establishing proof of loss necessary for benefit payments. Our supplemental disability products have various elimination periods and only provide short-term benefit periods. Sound underwriting strategies and disciplined underwriting methods help ensure loss experience is commensurate with pricing expectations.

$159.5 million in direct premiums, defined as premiums earned before reinsurance as determined under statutory accounting principles. Our principal group products insurance subsidiary is licensed to write business in 49 states, the U.S. Virgin Islands and the District of Columbia.

$126.0 million in direct premiums, defined as premiums earned before reinsurance as determined under statutory accounting principles. Our principal supplemental products insurance subsidiary is licensed to write business in 49 states, the U.S. Virgin Islands and the District of Columbia.

Geographic distribution of business

Our Group line of business is concentrated in the Upper Midwest, while our Supplemental business is concentrated in the Southern states including California. This provides opportunities for growth for both lines of business. For the year ended December 31, 2025, based on direct premiums for all product lines, the top five states and their portion of total direct insurance premiums for the Supplemental business were California, 30.3%; Texas, 12.6%; Florida, 7.2%; North Carolina, 5.2%; and Louisiana, 5.1%. The top five states and their portion of total direct insurance premiums for the Group business were Minnesota, 14.8%; Wisconsin, 13.3%; Pennsylvania, 9.7%; Indiana, 9.0%; and Iowa, 8.7%.

Competition in this market for employee benefit products is robust and consists of a number of national and regional carriers offering disability, accident, and health insurance, including Aflac, American Fidelity, Colonial (a subsidiary of Unum), Reliance Standard, The Standard, Trustmark, and Washington National (a subsidiary of

CNO). Other carriers, such as Guardian, MetLife, Securian, and Voya, offer similar group products although, typically, focused on large cases in the private sector. A number of additional carriers have also entered parts of the employee benefit market.

In our target market, we believe that our principal competitive advantages in the sale of supplemental and Group products are overall service, product features, school and union partnerships, price, and name recognition.

Group Reserves

Unpaid claims and claim expense reserves for the Group products (Group reserves) represent management's best estimate of ultimate unpaid costs of losses and settlement expenses for reported claims and claims IBNR. We calculate and record a single best estimate of the Group reserves as of each reporting date in conformity with actuarial standards of practice. For additional information regarding the process used to estimate Group reserves and the risk factors involved, as well as a summary reconciliation of the beginning and ending Group claims and claim expense reserves and prior years' reserve development recorded for the year ended December 31, 2025, see Part I - Item 1A - Risk Factors - "Actual experience may differ from actuarial assumptions, which could adversely affect our results of operations and financial condition", Part II - Item 7, Results of Operations for the Supplemental & Group Benefits Segment, and Part II - Item 8, Note 5 of the Consolidated Financial Statements of this Annual Report on Form 10-K.

Group Reinsurance

We retained approximately 73.1% of gross and assumed group disability, life, and specialty health benefits in 2025. Reinsurance is used to manage our product portfolio, reduce the potentially adverse financial impact of large individual or group risks, and to reduce the strain on statutory income and surplus related to new business. We purchase quota share reinsurance and excess reinsurance in amounts deemed appropriate by our risk committee. We monitor our retention amounts by product line and have the ability to adjust our retention as appropriate.

Our current reinsurance program serves three primary purposes:

•We have legacy blocks of individual life, annuity and long term care benefits that are no longer strategic; these blocks are in runoff and effectively 100% ceded to remove the financial impact to us

•Reinsurance is purchased on a quota share basis to manage the surplus impact of new business

•For certain products, we use reinsurance above certain retention limits to mitigate large risks above our current risk appetite

These three uses roughly correspond to the percentages in the table below.

The following reinsurers represent approximately 98.0% of total ceded premium for the year ended December 31, 2025:

We remain liable with respect to the insurance in force, which has been reinsured, in the unlikely event that the assuming reinsurers are unable to satisfy their obligations. The ceding of reinsurance does not discharge us from the primary liability of the insured.

Supplemental Reserves

Supplemental policy reserves represent our best estimate of the present value of future ultimate benefits, net of future premiums, to be provided for cancer, heart, hospital, disability and accident claims. The reserves are a single best estimate calculated in accordance with actuarial standards of practice. Unpaid claims and claim expenses provide provisions for claims reported to us plus an estimated accrual for claims IBNR. For additional information regarding the process used to estimate Supplemental reserves and the risk factors involved, see

Part I - Item 1A - Risk Factors - "Actual experience may differ from actuarial assumptions, which could adversely affect our results of operations and financial condition”, Part II - Item 7, Results of Operations for the Supplemental & Group Benefits Segment, and Part II - Item 8, Note 6 of the Consolidated Financial Statements of this Annual Report on Form 10-K.

Supplemental Reinsurance

We retain all of the risk on our supplemental product lines, including accidental death risk embedded within certain products. However, other accidental death and dismemberment risks issued through life insurance policies and riders are ceded 100%. The maximum life insurance risk retained on any individual life is $100,000. The excess risk on the life insurance products is ceded to and reinsured by a third party that is rated A (Excellent) by A.M. Best.

Corporate & Other

Corporate & Other includes capital raising activities (including debt financing and related interest expense), net investment gains (losses), certain public company expenses and other corporate-level transactions including expenses related to business acquisition activity and termination of defined benefit plans. We do not allocate the impact of corporate-level transactions to the other reporting segments, consistent with the basis for management's evaluation of the results of those segments.

In addition, Corporate & Other includes commercial exposures related to legacy commercial claims. In the late 1960s and early 1970s, the Company reinsured certain commercial lines policies as a member of various insurance pooling arrangements. On January 1, 1975, the Company entered into a quota share retrocession treaty. Ultimately, after a series of amendments to the treaty and various corporate transactions involving the reinsurer, these obligations were assumed by Randall & Quilter Investment Holdings Limited (R&Q). It is management’s understanding that since 1975, claims arising under these legacy commercial lines policies were handled by various third parties pursuant to the terms of the January 1, 1975 reinsurance treaty and its subsequent amendments.