HORACE MANN EDUCATORS CORP /DE/
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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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.
Jun 30, 2025 · Filed Aug 6, 2025
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Supplemental & Group Benefits
The Supplemental & Group Benefits segment markets group solutions for districts and other public employers, as well as individual supplemental products typically distributed through the employer channel. The Supplemental & Group Benefits segment 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 18% of total revenues in 2024.
Lower net investment income related to fixed income portfolio
Lower benefits ratio for group benefits for the quarter and higher benefits ratio for the year
Higher operating expenses due to investment in growth
| Horace Mann Educators Corporation | 51 | Second Quarter 2025 Form 10-Q |
|---|
The following table provides certain information for Supplemental & Group Benefits for the periods indicated.
| ($ in millions) | Three Months EndedJune 30, | 2025-2024 | Six Months EndedJune 30, | 2025-2024 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2025 · 2024 · % Change · 2025 · 2024 · % Change | ||||||||||
| Supplemental & Group Benefits | ||||||||||
| Revenues | ||||||||||
| Net premiums and contract charges earned | $65.7 | $63.7 | 3.1% | $132.8 | $127.9 | 3.8% | ||||
| Net investment income(1) | 7.1 | 10.5 | -32.4% | 16.5 | 18.3 | -9.8% | ||||
| Other income | (1.9) | (1.2) | -58.3% | (3.0) | (4.2) | 28.6% | ||||
| Total revenues | 70.9 | 73.0 | -2.9% | 146.3 | 142.0 | 3.0% | ||||
| Benefits and Expenses | ||||||||||
| Benefits, settlement expenses and change in reserves | 24.0 | 24.7 | -2.8% | 52.1 | 47.5 | 9.7% | ||||
| Operating expenses (including DAC amortization expense) | 33.1 | 26.7 | 24.0% | 62.6 | 55.3 | 13.2% | ||||
| Intangible asset amortization expense | 3.6 | 3.6 | —% | 7.1 | 7.2 | -1.4% | ||||
| Total benefits and expenses | 60.7 | 55.0 | 10.4% | 121.8 | 110.0 | 10.7% | ||||
| Income before income taxes | 10.2 | 18.0 | -43.3% | 24.5 | 32.0 | -23.4% | ||||
| Income tax expense | 2.3 | 3.9 | -41.0% | 5.4 | 6.9 | -21.7% | ||||
| Net income | 7.9 | 14.1 | -44.0% | 19.1 | 25.1 | -23.9% | ||||
| Core earnings* | 13.4 | 17.0 | -21.2% | 27.4 | 30.8 | -11.0% | ||||
| Benefits ratio | 36.7% | 38.8% | -2.1 | pts | 39.3% | 37.2% | 2.1 | pts | ||
| Operating expense ratio | 46.7% | 36.6% | 10.1 | pts | 42.8% | 39.0% | 3.8 | pts | ||
| Pretax profit margin | 14.4% | 24.6% | -10.2 | pts | 16.7% | 22.5% | -5.8 | pts | ||
| Individual supplemental products benefits ratio | 27.7% | 28.0% | -0.3 | pts | 28.0% | 29.5% | -1.5 | pts | ||
| Individual supplemental premium persistency (rolling beginning 12 months) | 89.9% | 91.4% | -1.5 | pts | 89.9% | 91.4% | -1.5 | pts | ||
| Group benefits products benefits ratio | 44.8% | 48.3% | -3.5 | pts | 49.2% | 44.0% | 5.2 | pts | ||
| Group benefits covered lives (in thousands) | 822 | 830 | -1.0% | |||||||
(1) In the second quarter of 2025, the Company recorded a reduction in net investment income due to an immaterial out-of-period correction of an error. See additional disclosure contained in Note 1 of the June 30, 2025 Form 10-Q.
Supplemental & Group Benefits segment net income for the three and six months ended June 30, 2025, of $7.9 million and $19.1 million, was down $6.2 million and $6.0 million. The individual supplemental benefits ratio decreased 0.3 points. The group benefits benefit ratio decreased 3.5 points due to favorable policy utilization during the quarter. Operating expense increase reflects inflation and investments being made in growth initiatives and infrastructure.
Excluding the reduction in net investment income due to an immaterial out-of-period correction of an error of $3.5 million ($2.8 million after tax), net investment income increased $0.1 million and $1.7 million for the three and six months ended June 30, 2025.
Total sales* for the three and six months ended June 30, 2025 increased $0.4 million with individual supplemental product sales increasing $1.7 million and group benefits products decreasing $1.3 million. Individual supplemental sales increased 42.5% due to strong customer demand. Variability in sales between comparable periods is typical for Group Benefits given the relatively small scale and the longer sales cycle of this business. Persistency remains strong for the segment.
| Horace Mann Educators Corporation | 52 | Second Quarter 2025 Form 10-Q |
|---|
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