HORACE MANN EDUCATORS CORP DE
For the period ended Sep 30, 2024. Filed Nov 4, 2024.
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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, 2024 · Filed Nov 4, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Supplemental & Group Benefits
The Supplemental & Group Benefits segment markets employer-sponsored group solutions for districts and other public employers, as well as worksite direct products typically distributed through the employer channel. The Worksite business 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 19% of total revenues in 2023.
Decline in premium due to run-off of an indemnified block of employer-sponsored products; net premiums earned increased 2.2% excluding the run-off for the nine months
Higher benefits ratio for worksite direct products for the nine months reflecting the anticipated increase in utilization
Higher benefits ratio for employer sponsored for three months driven by book of business in run-off but comparable benefit ratios for the nine months
| Horace Mann Educators Corporation | 46 | Third Quarter 2024 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, | 2024-2023 | Nine Months EndedSeptember 30, | 2024-2023 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2024 · 2023 · % Change · 2024 · 2023 · % Change | ||||||||||
| Supplemental & Group Benefits | ||||||||||
| Revenues | ||||||||||
| Net premiums and contract charges earned | $62.7 | $63.5 | -1.3% | $190.6 | $195.2 | -2.4% | ||||
| Net investment income | 10.1 | 10.3 | -1.9% | 28.4 | 28.5 | -0.4% | ||||
| Other income | (0.4) | (3.1) | 87.1% | (4.6) | (8.2) | 43.9% | ||||
| Total revenues | 72.4 | 70.7 | 2.4% | 214.4 | 215.5 | -0.5% | ||||
| Benefits and Expenses | ||||||||||
| Benefits, settlement expenses and change in reserves | 22.6 | 20.5 | 10.2% | 70.1 | 69.3 | 1.2% | ||||
| Operating expenses (including DAC amortization expense) | 27.5 | 26.4 | 4.2% | 82.8 | 82.3 | 0.6% | ||||
| Intangible asset amortization expense | 3.5 | 3.6 | -2.8% | 10.7 | 10.9 | -1.8% | ||||
| Total benefits and expenses | 53.6 | 50.5 | 6.1% | 163.6 | 162.5 | 0.7% | ||||
| Income before income taxes | 18.8 | 20.2 | -6.9% | 50.8 | 53.0 | -4.2% | ||||
| Income tax expense | 4.0 | 4.4 | -9.1% | 10.9 | 11.4 | -4.4% | ||||
| Net income | 14.8 | 15.8 | -6.3% | 39.9 | 41.6 | -4.1% | ||||
| Core earnings* | 14.8 | 15.8 | -6.3% | 39.9 | 41.6 | -4.1% | ||||
| Adjusted core earnings* | 17.6 | 18.7 | -5.9% | 48.4 | 50.2 | -3.6% | ||||
| Benefits ratio | 36.0% | 32.3% | 3.7 | pts | 36.8% | 35.5% | 1.3 | pts | ||
| Operating expense ratio | 37.9% | 37.3% | 0.6 | pts | 38.6% | 38.2% | 0.4 | pts | ||
| Pretax profit margin | 26.0% | 28.5% | -2.5 | pts | 23.7% | 24.6% | -0.9 | pts | ||
| Worksite direct products benefits ratio | 27.8% | 27.8% | — | pts | 28.9% | 26.7% | 2.2 | pts | ||
| Worksite direct premium persistency (rolling beginning 12 months) | 91.5% | 90.5% | 1.0 | pts | 91.5% | 90.5% | 1.0 | pts | ||
| Employer-sponsored products benefits ratio | 43.6% | 36.4% | 7.2 | pts | 43.9% | 43.1% | 0.8 | pts | ||
| Employer-sponsored covered lives (in thousands) | 842 | 825 | 2.1% | |||||||
Supplemental & Group Benefits segment net income for the three and nine months ended September 30, 2024, of $14.8 million and $39.9 million were down $1.0 million and $1.7 million, respectively. The worksite direct benefits ratio increased for the nine months reflecting the anticipated increase in utilization. The employer-sponsored benefit ratio was 0.8 points higher than the prior year due to the block of business in run-off and is offset in Other income due to the indemnification agreement related to the book in run-off. The non-cash impact of amortization of intangible assets under purchase accounting reduced core earnings by $3.6 million, pretax, in both years.
Total sales* for the nine months ended September 30, 2024 were $19.4 million with worksite direct product sales of $11.5 million and employer-sponsored products of $7.9 million. Worksite direct sales increased 7.5% and employer sponsored sales decreased 21.0%. Employer sponsored sales may vary significantly between comparable periods due to differences in average case size and specific timing of new cases can result in quarter over quarter variances. Persistency remains strong for the segment.
| Horace Mann Educators Corporation | 47 | Third Quarter 2024 Form 10-Q |
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