Horace Mann Educators (HMN) Q4 2024 earnings summary

Executive summary

• Achieved record core EPS of $3.18 and core ROE of 8.8%, driven by restored P&C profitability, strong sales growth, and stable segment contributions.

• 16 consecutive years of dividend increases, current yield at 3.5%, and $123.7M in share repurchases since 2011.

• Diversified business model with a focus on the educator market and over one million households served.

• Net premiums and contract deposits increased 8% year-over-year, with P&C net premiums earned up 14%.

• Net investment income increased, aided by higher interest rates and improved commercial mortgage loan fund performance.

Financial highlights

• Full year 2024 core earnings: $132 million ($3.18 per diluted share), more than double prior year; net income reached $103 million ($2.48 per share).

• Adjusted book value per share at year-end: $37.54; tangible book value per share: $32.38; assets totaled $14.5B.

• Core ROE improved by 4.5 points to 8.8%; P&C combined ratio improved 15.4 points to 97.9%.

• S&GB core earnings up 10% over prior year; L&R core earnings slightly below prior year due to lower net interest margins.

• Net written premiums: P&C $779.3 million (+13.9%), auto $490.7 million (+11.8%), property $288.6 million (+17.7%).

Outlook and guidance

• 2025 core EPS guidance: $3.60–$3.90; core earnings expected between $150M–$165M; targeted double-digit ROE.

• Net investment income expected at $470–$480 million, with managed portfolio at $370–$380 million.

• Catastrophe losses assumed at $90 million for 2025, in line with historical averages.

• P&C segment targeting mid-90s combined ratio; auto and property lines underwritten to mid-90s and 90 or below, respectively.

• Continued investment in technology, product enhancements, and agency force to drive profitable growth.