Horace Mann Educators (HMN) Q2 2024 earnings summary

Executive summary

• Second-quarter 2024 core earnings were $8.4 million ($0.20 per diluted share), with net income of $3.8–$4 million, a significant improvement over the prior year, and total revenues increased 8.9–9% year-over-year, driven by strong segment sales and improved underwriting.

• Adjusted book value per share reached $36.33 at quarter end, up 2.2% year-over-year.

• Property & Casualty profitability restoration strategy is on track, with double-digit sales growth and a 13-point improvement in combined ratio.

• Agency force productivity and engagement are driving profitable growth in both retail and worksite divisions, with a focus on the education market.

• The company serves over 1 million households, focusing on educators and expanding through acquisitions and product diversification.

Financial highlights

• Core earnings for Q2 were $8.4 million ($0.20 per diluted share), up from $0.03 a year ago; net income for Q2 was $3.8–$4 million, compared to a loss of $12.8 million in Q2 2023.

• Net written P&C premiums rose 16.6–17% year-over-year, driven by premium increases.

• Supplemental & Group Benefits segment earnings were $14–$14.1 million, up nearly 20% year-over-year.

• Book value per share increased 9.8% year-over-year to $29.60; adjusted book value per share rose to $36.33.

• Share repurchases totaled 140,782–231,000 shares for $7.7 million year-to-date, with $28–$30.2 million remaining authorized.

Outlook and guidance

• Full-year 2024 core EPS guidance is $2.40–$2.70, reflecting lower net investment income and higher catastrophe losses.

• P&C segment earnings guidance narrowed to $36–$39 million for the year, with a combined ratio near 100%.

• Life & Retirement segment earnings outlook adjusted to $50–$56 million; Supplemental & Group Benefits to $49–$52 million.

• Net investment income for 2024 expected at $440–$450 million; operating expenses to rise ~6%.

• Management targets sustainable double-digit ROE and profitability in all segments by 2025.