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. 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, which 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. We provide solutions that help administrators attract and retain employees by adding or improving benefit packages, and we provide individual products and services for educatorsto 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 80-year history serving the education market, helps us succeed in a highly competitive environment. Our solutions orientation for educators, school districts, and other partners focuses on ourproducts and services, distribution, andinfrastructure (PDI).

Products and services

We help K-12 educators achieve their financial goals through a variety of products and services tailored to meet their unique needs.

Individual protection and savings solutions include auto insurance, property insurance, liability insurance, 403(b) retirement plans, mutual funds, life insurance, student loan solutions, credit monitoring and financial wellness workshops.

Employer-and employee-paid protection products include 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 employees to purchase, which provides the opportunity for a school, district or association to make valuable financial protection benefits directly available to employees.

Distribution

Horace Mann provides knowledgeable, trusted distribution channels to meet educators how, when, and where they want to engage with us.

•Agents, brokers and benefit specialists: For individual products and solutions, our exclusive agency force partners 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.

Similarly, broker partners and benefit specialists bring employer-sponsored solutions to employer-decision-makers as part of the benefit design process. Our understanding of the educational market and specialized solutions package allows us to help brokers design custom solutions that support recruitment and retention. We also reach adjacent public sector markets, including firefighters and municipal employers that had been served for decades by NTA and Madison National.

•Direct and digital: Industry studies indicate that consumers research and shop for insurance using multiple outlets. Approximately 90% of prospects research P&C insurance online, however 60% choose to purchase from an agent. The more complex the product, the more likely people are to work with an agent. Our strengthened direct capabilities, available online or by phone, allow us to respond to questions or bind coverage when customers prefer that interaction.

We continue to enhance our digital capabilities. Through sophisticated digital marketing strategies, more and more educators are visiting the Horace Mann website to explore our solutions. We’ve also invested in our online quoting capabilities, allowing website visitors to start and complete auto, property and life quotes online.

Infrastructure

We continue to invest in our Information Technology infrastructure to support ease of doing business through a modern, scalable environment. Two focus areas include:

•Data Enlightenment - harnessing our robust, 80-year history of data to quickly drive data-driven decisions and actions.

•Digital Transformation - transforming our end-to-end digital experience through modern tools and concepts.

Three key projects that are tangible results of these focus areas include:

•Guidewire property and casualty platform, which increases customer convenience through capabilities such as e-signatures, real-time policy issuance and changes, coverage comparison features and consolidated billing.

•LifePro administration system for our life, retirement, annuity and supplemental products, which offers substantial benefits in terms of customer experience and operating efficiencies.

•Workday Financials system, which provides an integrated, end-to-end Corporate financial process platform to efficiently support our company’s growth.

Moving forward, our infrastructure investments will use Generative AI (GenAI) to drive operational excellence, elevate customer experiences, streamline workflows, and unlock sustainable growth. In 2024, we employed a no-risk approach to pilots, aligning with the National Institute of Standards and Technology framework and anticipated emerging regulatory requirements. This ensures we remain proactive and responsible in managing AI-related risks, and reflects our commitment to ethics, security and customer trust. In 2025, we will focus on expanding GenAI adoption across the company while maturing our AI risk framework to support innovation at scale. Efficiencies gained through our technology infrastructure will be reinvested to fund growth initiatives.