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 in line with guidance.

• Total revenues increased 9% year-over-year, driven by 8% growth in net premiums and contract charges earned.

• Property & Casualty profitability restoration is on track, with a goal of underwriting profit in 2024 and target profitability in 2025.

• Double-digit sales growth achieved in Property & Casualty and Supplemental & Group Benefits segments.

• Adjusted book value per share reached $36.33 at quarter end.

Financial highlights

• Core earnings for Q2 were $8.4 million, or $0.20 per diluted share, up from $0.03 a year ago.

• Net written P&C premiums rose nearly 17% to $199 million; auto premiums up 15%, property premiums up 20%.

• Combined P&C ratio improved 13 points to 111.5, with auto combined ratio at 97.2, reflecting favorable prior year reserve development.

• Supplemental and Group Benefits earnings rose 19% to $14 million, with a blended benefits ratio of 39%.

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

Outlook and guidance

• Full-year 2024 core EPS guidance revised to $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 and Retirement segment earnings outlook adjusted to $50–$56 million; Supplemental and Group Benefits raised 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 by 2025 and profitability in all segments.