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; traditional term and whole life insurance products and indexed universal life (IUL) 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 32% of total revenues in 2025.

•Higher premiums and contract charges earned

•Annualized quarterly and nine month net interest spread on fixed annuities up 139 basis points and 43 basis points, respectively

•Benefits expense decreased due to unfavorable prior-year impacts of lapse and mortality assumption updates for fixed indexed annuities

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 June 30, 2026 Form 10-Q.

Life & Retirement segment net income for the three and nine months ended September 30, 2026, was $34.1 million and $61.3 million, increases of 101.8% and 40.3%, respectively. Life benefits decreased $1.2 million and increased $2.4 million for the three and nine months periods. Retirement benefits decreased $2.5 million and $6.7 million for the three and nine months, respectively due to unfavorable prior-year impacts of lapse and mortality assumption updates for fixed indexed annuities.

The quarterly net spread increased 139 basis points primarily due to higher returns in the fixed-income portfolios and limited partnerships. 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) in the second quarter of 2025, net investment income increased $15.9 million and $13.4 million for the three and nine months ended September 30, 2026.

For the Retirement business, net annuity contract deposits were down 1.0% for the quarter at $137.2 million primarily reflecting product mix and market conditions. Educators continue to begin their relationship with Horace Mann through 403(b) retirement savings products, which provide encouraging cross-sell opportunities. Average persistency remained steady at 91.7%.

Horace Mann currently has $6.3 billion in retained annuity assets under management, including $2.2 billion of fixed annuities, $3.7 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 $3.0 million for the quarter. Persistency remains strong. Life insurance in force rose to $21.8 billion at quarter-end.

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 $2.1 million in year one, reducing the annualized net interest spread on fixed annuities by approximately 8 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.