Horace Mann Q2 2025 slides: Core EPS surges 293%, P&C profitability improves

Horace Mann Educators Corporation (NYSE:HMN) presented its second-quarter 2025 results on August 6, highlighting substantial earnings growth and improved profitability across its business segments. The education-focused financial services company reported a 293% year-over-year increase in core earnings per share, driven by significant improvements in its Property & Casualty operations and strong performance in its Life & Retirement segment.

Executive Summary

Horace Mann reported core earnings per share of $1.06 for the second quarter of 2025, a dramatic 293% increase compared to the same period last year. The company’s core return on equity reached 12.6%, up 6.1 percentage points year-over-year, putting the company on track to deliver record full-year core earnings.

As shown in the following financial performance summary, the company saw improvements across all key metrics:

"Our second-quarter results demonstrate the earnings power of our multiline business model and the success of our strategic initiatives," said Horace Mann in its presentation. The company highlighted that its P&C combined ratio improved 14.5 points to 97.0%, while total revenues increased 6% year-over-year to $412 million.

Quarterly Performance Highlights

The Property & Casualty segment showed remarkable improvement, with core earnings of $16.5 million significantly higher than the prior year. The segment benefited from improved underlying results, lower catastrophe losses, and favorable reserve development.

The following chart illustrates the strong performance in the P&C segment:

The Life & Retirement segment delivered core earnings of $24.6 million, double the prior year result. This improvement reflected higher net investment income and lower mortality costs. The segment continues to provide steady earnings ballast for the company, contributing 30% of consolidated core earnings.

As shown in the following chart of L&R performance:

The Supplemental & Group Benefits segment reported core earnings of $13.4 million, reflecting continued strong Individual Supplemental sales momentum and favorable benefit utilization. Second-quarter Individual Supplemental sales increased 43% over the prior year, while persistency remained strong at nearly 90%.

Detailed Financial Analysis

Horace Mann’s financial position continued to strengthen, with the company highlighting 17 consecutive years of dividend increases. The current dividend yield stands at 3.3% as of July 31, 2025. Year-to-date, the company has repurchased $13.2 million in shares, demonstrating its commitment to returning value to shareholders.

The following chart illustrates the company’s growing financial strength:

The company maintains a high-quality, well-diversified investment portfolio with a fair value of $6.9 billion. The portfolio is constructed to support insurance liabilities through various market cycles, with 75% of the fixed-maturity portfolio rated A or higher.

The investment portfolio allocation is illustrated in the following chart:

Strategic Initiatives

Horace Mann continues to focus on its niche market of educators, leveraging its 80-year history and deep understanding of this customer segment. The company serves approximately 13% of K-12 educators in its current footprint and about half of school locations in its market area.

The company’s enterprise strategy focuses on three key areas:

1. Achieving and maintaining profitability while reducing earnings volatility

2. Positioning for sustained, profitable household growth

3. Driving outsized growth in Individual Supplemental & Group Benefits

As illustrated in the company’s strategic roadmap:

Forward-Looking Statements

Based on its strong second-quarter performance, Horace Mann revised its full-year 2025 core earnings guidance to $170-185 million (after-tax). This updated guidance reflects the company’s confidence in achieving record full-year core earnings and delivering a double-digit core ROE.

The revised guidance includes assumptions of approximately $90 million in catastrophe losses, total net investment income of $470-480 million, and segment earnings offset by interest expense and other corporate items of $35-40 million.

As shown in the following guidance summary:

The company’s long-term strategy aims to deliver sustainable double-digit ROE while supporting growth and maintaining disciplined capital stewardship. For 2025, the focus is on positioning the business to deliver 10%+ ROE and sustaining profitable growth, while for 2026 and beyond, the goal is to deliver sustainable double-digit ROE and support continued growth.

Following the earnings presentation, Horace Mann’s stock closed at $42.06 on August 6, 2025, up 0.56% for the day. The stock has traded between $33.00 and $44.44 over the past 52 weeks, according to available market data.

Full presentation:

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