HORACE MANN EDUCATORS CORP DE

Our vision is to be the company of choice to provide insurance and financial solutions for all educators and others who serve their communities, whether they engage with Horace Mann directly or through their district/employer. We believe the unique value of Horace Mann is providing solutions tailored for educators at each stage of their lives, empowering them to achieve lifelong financial success. Our motivation stems from our gratitude for educators: They are looking after our children's futures, and we believe they deserve someone to look after theirs. Our commitment to having a positive impact on our customers' lives extends to all our corporate stakeholders, including employees, agents, investors and the communities where we live and work.

Education market focus

The U.S. Department of Education estimates that there are approximately 7.5 million K-12 school teachers, administrators and support staff nationwide. Horace Mann serves approximately 1 million of these households. Our customer base is about 80% educators. (The remaining 20% are generally in other public sector occupations such as firefighters.) The niche educator market has similar characteristics and preferred risk profiles, which allows for more precise underwriting processes and more targeted marketing operations.

A major motivator for people choosing careers in education is its intangible rewards: The ability to make a difference in students’ lives and contribute to the greater good and as the U.S. population increases, the need for educator positions grows proportionally. However, 86% of U.S. K-12 public schools reported challenges hiring teachers for the 2023-24 school year, according to data from the National Center for Education Statistics (NCES), the statistical center of the U.S. Department of Education's Institute of Education Sciences (IES).

The NCES reported that the biggest barriers to hiring teachers were too few candidates applying for open positions (cited by 70 percent of public schools) and a lack of qualified applicants applying for open positions (cited by 66 percent). Horace Mann research also indicates challenges to hiring and retention that include the burden of financial stress, heavier workloads due to the current U.S. educator shortage, and conflicting expectations of parents, administrators and lawmakers are driving more professionals out of the job they love.

Horace Mann's research indicated that more than a quarter of educators would be more likely to stay in their job if they felt more financially secure. Horace Mann's Worksite Division provides solutions that help administrators attract and retain employees by adding or improving benefit packages. Our Retail Division is focused on providing products and services that educators generally purchase directly, designed to protect what they have today or prepare for a successful future.

Our partnerships with a diverse group of national, state and local education associations also supports recruiting and retention. Working closely with the educational community helps us to identify emerging educator financial wellness issues and build solutions to address them.

We believe our niche market strategy, combined with our Company's more than 75-year history serving the education market, helps us succeed in a highly competitive environment. The insurance industry consists of a large number of companies, some of which have substantially greater financial resources, widespread advertising campaigns, more diversified product lines, greater economies of scale and/or lower-cost marketing approaches compared to us.

Our solutions orientation for both educator and school district customers focuses on products, distribution and infrastructure (PDI):

•Protection and savings products, as well as financial wellness resources and programs, designed to meet K-12 educators’ unique needs.

•Knowledgeable, trusted distribution tailored to educator preferences. In our Retail Division, the solutions are delivered directly to educators. In our Worksite Division, our solutions are often delivered as employee benefits or as part of an annual enrollment process.

•Modern, scalable infrastructure that is easy to do business with.

Retail Division strategy

We provide protection and savings products directly to educators through local, trusted agents or by centralized phone and online options. These products include auto insurance, property insurance, liability insurance, 403(b) retirement plans, mutual funds and individual life insurance tailored to meet the needs of educators.

Horace Mann is focused on meeting educators where they want to engage with us while leveraging the value of our exclusive agency force to address educator needs. Our agents partner with their local educational community as a trusted advisor in financial wellness. Educators have specific financial challenges, such as navigating individual state teacher retirement systems, student loan debt, and personal spend on classroom supplies. Horace Mann shares financial education resources and specific programs to help educators address these challenges. This trusted adviser model builds particularly strong brand loyalty and affinity.

One example is Horace Mann's Student Loan Solutions program. For many educators — particularly those new to the profession — student loan debt is often substantial. Among other challenges, that debt may preclude early in career saving for retirement at the point when those savings would have the most time to grow and make a significant impact at retirement age. We offer complimentary online student loan management accounts for all educators nationwide, which includes guidance on how to successfully qualify for federal student loan forgiveness available to public sector employees.

Industry studies indicate that consumers gather information and shop for insurance using multiple sales outlets. In fact, only 20% shop solely through an agent; however, 60% of sales end with agent involvement. Our strengthened direct capabilities, available by phone or online, allow us to respond to questions or bind coverage when customers prefer that interaction. Customers can also secure auto, property and life quotes and coverage comparisons online.

We continuously improve the infrastructure that supports our Retail Division. In particular, we are enhancing our digital capabilities to ensure our operation runs efficiently and educators can connect with us in the manner they prefer. Key projects include the Guidewire property and casualty platform, which increases customer convenience through improved digital capabilities, e-signatures, real-time policy issuance and changes, coverage comparison features and consolidated billing; and the LifePro administration system for our life, retirement, annuity and supplemental products, which offers substantial benefits in terms of customer experience and operating efficiencies.

Worksite Division strategy

We provide protection products through the workplace as employee benefits or directly. The product set includes life insurance, group long- and short-term disability, supplemental cancer, supplemental heart, supplemental disability, supplemental accident and supplemental hospital indemnity. Group products may be paid for by the employer, or provided as optional benefits for employee purchase. Individual products provide the opportunity for a school, district or association to make valuable financial protection benefits directly available to employees. The Division also reaches adjacent public sector markets, including firefighters and municipal employers that had been served for decades by NTA and Madison National.

Our core worksite distribution strategy is to market through the benefit brokers and others that bring employer-sponsored solutions for educators and others who serve their communities directly to employer-decision makers as part of the benefit design process. Our benefit enrollment teams can support the roll out of group solutions or manage the enrollment process for individual products.

Our understanding of the educational market and specialized solutions package allows us to help these brokers design custom solutions that support recruitment and retention. For example, we can package our student loan solutions offering with other worksite benefits.

Following the integration of NTA and Madison National, we are focused on ensuring the infrastructure for our Worksite Division is responsive to the needs of our distribution partners, employers, educators and others who serve their communities. In 2023, one area of focus was enhancing the platforms used by marketing partners.