HORACE MANN EDUCATORS CORP /DE/

The Property & Casualty segment primarily markets private passenger auto insurance and residential home insurance. Horace Mann offers standard auto coverages, including liability, collision and comprehensive. Property coverage includes both homeowners and renters policies. For both auto and property coverage, Horace Mann offers educators a discounted rate and the Educator Advantage® package of features. The Property & Casualty segment represented 51% of total revenues in 2024.

•Increases in average written premium per policy

•Lower underlying loss ratio*

•Catastrophe losses lower than prior year by 7.8 points and 4.4 points for the three and six months, respectively

•Higher net investment income driven by limited partnership portfolio

The following table provides certain financial information for Property & Casualty for the periods indicated.

(1)(Favorable) unfavorable.

The Property & Casualty segment three and six month net income of $16.5 million and $43.3 million, as well as the three month and six month combined ratio of 97.0% and 93.3%, respectively, reflected the positive effect of rate and non-rate actions as well as catastrophe losses below prior year and recent prior periods.

The current quarter reflects an increase in net premiums written* of 6.1%, with average written premiums* rising for both property and auto. Sales* were steady for the quarter, up 5.5% from the prior year, and household retention remains in line with expectations.

The three and six month loss ratios decreased 16.2 and 13.5 points from last year reflecting higher average premiums and catastrophe losses that were below recent prior periods. In addition, $5.5 million and $10.8 million of net favorable prior years' reserve development for the three and six months reduced the loss ratio 2.8 points for both comparisons. Catastrophe losses for the quarter were $29.7 million, pretax, contributing 15.0 points to the combined ratio. In total, there were 20 events designated as catastrophes by Property Claims Services (PCS) in this year’s second quarter. The lower catastrophe losses are driven by lower frequency and severity of policyholder claims. In the second quarter of 2024, catastrophe losses were $40.9 million, pretax, contributing 22.8 points to the combined ratio, from 28 PCS events.

The year-over-year increase in average written premiums* for auto policies remained elevated in the second quarter at 8.8%, with retention declining slightly, and in line with expectations, given substantial rate increases. The second-quarter auto underlying loss ratio* was 68.7%, improving 5.5 points from the prior year quarter, reflecting the benefit of higher average earned premium. The second quarter reported loss ratio benefited 1.2 points from favorable prior years' reserve development.

The year-over-year increase in average written premiums* for property policies was 11.6% in the second quarter, as rate increases and inflation adjustments to coverage values continue to take effect. Policyholder retention remains strong. The second-quarter property underlying loss ratio* was 36.8%, a 14.1 point decrease from prior year reflecting the increase in average earned premium* and lower frequency and severity.