Summary of Horace Mann Educators Q2 2026 Earnings Call

1Key Financial Results and Metrics

Core Earnings: Reported at $1.17 per share, up over 10% year-over-year.

Return on Equity: Core shareholder return on equity for the trailing 12 months was 12.8%.

Total Revenues: Increased by 8% compared to the prior year quarter.

Property and Casualty (P&C): Core earnings rose 56% year-over-year to $26 million; combined ratio improved by 7 points to 89.6%.

Life and Retirement: Core earnings of $17 million; life sales increased by 20%.

Individual Supplemental and Group Benefits: Sales up 44%, continuing strong performance.

2Strategic Updates and Business Highlights

Horace Mann's diversified business model is yielding consistent operating performance across various economic conditions.

Investments in product offerings and distribution capabilities are driving growth, particularly in individual supplemental and group benefits.

New partnerships (e.g., with Crayola, Disney Institute) enhance educator engagement and brand recognition.

The company is focused on strengthening relationships with educators and school districts, which is central to its long-term strategy.

The company announced acquisitions aimed at expanding its service capabilities and customer reach, with expected earnings accretion starting in 2027.

3Forward Guidance and Outlook

Full Year 2026 Core Earnings Guidance: Increased to a range of $4.60 to $4.90 per share.

Catastrophe Loss Assumption: Reduced from $90 million to $75 million for the full year.

Net Investment Income: Expected to be in the range of $465 million to $475 million.

Blended Benefit Ratio: Increased expectation to approximately 42% for individual supplemental and group benefits.

4Bad News, Challenges, or Points of Concern

Investment Income Outlook: Guidance for net investment income was lowered due to mixed impacts from market conditions, particularly affecting alternative investment strategies.

Organic Growth in P&C: While profitability is strong, there is a noted need for organic policy growth, particularly in auto insurance.

Weather Dependency: The favorable weather conditions that benefited the first half of the year are not expected to continue, which could normalize loss ratios in the second half.

5Notable Q&A Insights

Paid Family and Medical Leave Pricing: Discussed the pricing structure and annual repricing opportunities, indicating that the business is performing as expected.

Fixed Annuity Spread: Improved due to strong limited partnership earnings; however, guidance was adjusted to reflect lower anticipated returns from certain asset classes.

Acquisition Impact: The Medical Mutual of Ohio deal is expected to provide EPS accretion in the range of $0.40 to $0.50 annually starting in 2027, but will not significantly impact 2026 earnings due to timing.

Capital Management: The company maintains a disciplined approach to capital management, balancing buybacks with the need for financial flexibility, especially in light of recent acquisitions. Overall, Horace Mann's Q2 2026 results reflect strong operational performance and strategic execution, although there are challenges related to investment income and organic growth in certain segments. The company remains optimistic about its long-term growth trajectory and commitment to serving the educator community.