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Horace Mann CR weakens 15.5 points to 112%, P&C premiums down 5.2%

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Educator-focused carrier Horace Mann reported its combined ratio swelled by 15.5 points in the third quarter, as both its underlying loss ratio and expense ratio spiked.

The Springfield, Illinois-based carrier reported a combined ratio of 112%, up from 96.5% in Q3 2020.

The company’s underlying loss ratio rose 6.7 points to 61.4%, as catastrophe loss costs and auto loss costs moved closer to pre-pandemic levels.

The company’s expense ratio recorded a 2.3 point increase to 27.5%.

Horace Mann’s adjusted diluted earnings per share fell 39% to $0.50 per share as its core earnings slid 38% to $21.4mn, from $34.6mn last year.

P&C premiums written dropped 5.2% to $163.8mn, with new business volume remaining below historical levels due to the Covid-19 pandemic. Auto average premiums edged down, in part because of changes in miles driven during the pandemic.

Property premiums rose slightly as adjustments to coverage values continued to take effect amid a firming market. The company noted in its earnings release that “rate increases are expected to play a greater role in the coming quarters”.

Net investment income rose 10.7% to $103.7mn.

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“While all our business areas are showing some encouraging signs of momentum, the pace continues to vary by segment and geography compared to the pre-pandemic environment,” said Horace Mann President and CEO Marita Zuraitis in a statement.

“Our retirement line continued the strong performance it has delivered since the pandemic began, with its highest sales quarter in several years.”

“In addition, as educators returned to a ‘more normal’ school year, we have seen more opportunities to interact with them, introduce ourselves to new clients and engage in enrollment activities,” she continued.

“This led to our highest sales quarter since the pandemic began for the supplemental segment. Overall, it is clear that educators continue to find our financial solutions relevant for their needs. We also are seeing solid agent recruiting, typically a ‘leading indicator’ of future sales growth."

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