HORACE MANN EDUCATORS CORP DE
For the period ended Dec 31, 2024. Filed Feb 28, 2025.
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FY2024 · Filed Feb 28, 2025
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Property & Casualty
Increases in average written premium per policy
Improved underlying property loss ratio* due to favorable frequency
Favorable prior years' reserve development in the current year
Higher net investment income on fixed maturity investments
The following table provides certain financial information for Property & Casualty for the years indicated.
| ($ in millions, unless otherwise indicated) | Year Ended December 31, | 2024-2023 | |||
|---|---|---|---|---|---|
| 2024 · 2023 · Change % | |||||
| Financial Data: | |||||
| Net premiums written*: | |||||
| Auto | $490.7 | $439.1 | 11.8% | ||
| Property and other | 288.6 | 245.3 | 17.7% | ||
| Total net premiums written | 779.3 | 684.4 | 13.9% | ||
| Change in unearned net premiums | (42.8) | (38.8) | 10.3% | ||
| Total net premiums earned | 736.5 | 645.6 | 14.1% | ||
| Incurred claims and claims expenses: | |||||
| Claims occurring in the current year | 552.8 | 557.0 | -0.8% | ||
| Prior years' reserve development(1) | (29.5) | — | N.M. | ||
| Total claims and claim expenses incurred | 523.3 | 557.0 | -6.1% | ||
| Operating expenses, including DAC amortization | 200.4 | 174.6 | 14.8% | ||
| Underwriting gain (loss) | 12.8 | (86.0) | 114.9% | ||
| Net investment income | 46.0 | 37.9 | 21.4% | ||
| Income (loss) before income taxes | 63.4 | (45.3) | 240.0% | ||
| Net income (loss) | 49.1 | (35.5) | 238.3% | ||
| Core earnings (loss)* | 49.1 | (35.5) | 238.3% | ||
| Operating Statistics: | |||||
| Auto | |||||
| Loss and loss adjustment expense ratio | 71.2% | 84.4% | -13.2 | pts | |
| Expense ratio | 27.2% | 27.3% | -0.1 | pts | |
| Combined ratio: | 98.4% | 111.7% | -13.3 | pts | |
| Prior years' reserve development(1) | -3.2% | —% | -3.2 | pts | |
| Catastrophe losses | 1.8% | 2.7% | -0.9 | pts | |
| Underlying combined ratio* | 99.8% | 109.0% | -9.2 | pts | |
| Property | |||||
| Loss and loss adjustment expense ratio | 69.1% | 89.5% | -20.4 | pts | |
| Expense ratio | 27.3% | 26.6% | 0.7 | pts | |
| Combined ratio: | 96.4% | 116.1% | -19.7 | pts | |
| Prior years' reserve development(1) | -5.8% | —% | -5.8 | pts | |
| Catastrophe losses | 32.6% | 37.3% | -4.7 | pts | |
| Underlying combined ratio* | 69.6% | 78.8% | -9.2 | pts | |
| Risks in force (in thousands) | |||||
| Auto(2) | 346 | 358 | -3.4% | ||
| Property | 167 | 168 | -0.6% | ||
| Total | 513 | 526 | -2.5% | ||
(1)(Favorable) unfavorable.
(2)Includes assumed risks in force of 4.
Catastrophe losses incurred were as follows:(1)
| ($ in millions) | Year Ended December 31, | |
|---|---|---|
| 2024 | 2023 | |
| Three months ended | ||
| March 31st | $16.2 | $22.4 |
| June 30th | 40.9 | 41.5 |
| September 30th | 34.0 | 28.7 |
| December 31st | 3.8 | 5.0 |
| Total for year | $94.9 | $97.6 |
(1)See Part I - Item 1 - Reporting Segments - Property & Casualty for further details regarding catastrophe losses for the past five years.
Including a profit of $36.5 million in the fourth quarter, the Property & Casualty segment’s net income for the full year 2024 reflected favorable prior years' reserve development in the current year and non-catastrophe loss activity for much of the year. Property & Casualty net premiums written were up 13.9% for the year and segment net investment income was up 21.4% for the year.
On a reported basis, the 13.3 point decrease in the auto combined ratio in 2024 was mainly attributable to a 9.1 point decrease in the auto underlying loss ratio* and favorable prior year development. Favorable prior years' auto reserve development of $15.2 millionwas reported in 2024, reflecting the impact of lower severity.
The reported property combined ratio decreased 19.7 points in 2024 primarily due to a 9.9 point decrease in property underlying ratio* and favorable prior year development. Additionally, there was a 4.7 point decrease in the catastrophe ratio driven by higher premiums.
In 2024, total Property & Casualty net premiums written* increased $94.9 million as rate actions and inflation adjustments to coverage values for property more than offset declines in risks in force. Retention remained strong despite the rate actions with auto at 85.3%, reflecting a one point decline, and property flat at 89.6%.
In 2024, auto net premiums written* increased $51.6 million, primarily due to rate actions partially offset by the continuing decline in auto risks in force. For 2024, average auto net premium written and average net premium earned increased 15.7% and 16.3%, respectively. Property and other net premiums written* increased $43.3 million due to increases in average net premium written and average net premium earned which increased 18.2% and 17.8% respectively, as rate actions and inflation adjustments to coverage values continue to take effect. The number of educator risks has been at or above 80% relative to overall risks in force over the past two years.
We continue to evaluate and implement actions to further mitigate our risk exposure. Such actions could include, but are not limited to, non-renewal of property risks, restricted agent geographic placement, limitations on agent new business sales, further tightening of underwriting standards and increased utilization of third-party vendor products.
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