Horace Mann Educators (HMN) Q4 2025 earnings summary

Executive summary

• Achieved record 2025 core earnings of $196 million ($4.71 per share) and net income of $162 million ($3.90 per share), with 12.4% ROE, the highest in company history; all segments met or exceeded profitability targets and total revenues rose nearly 7% year-over-year.

• Individual Supplemental sales rose nearly 40%, Group Benefits up 33%, and Life sales hit a record, reflecting strong marketing, distribution, and brand awareness initiatives.

• Catastrophe losses were unusually light at $62 million, boosting core earnings by $0.55 per share relative to original assumptions.

• Expanded educator market reach, increased unaided brand awareness to 35%, and launched the Horace Mann Club for educator support.

• Business diversification and a strong balance sheet support consistent shareholder value and a compelling dividend.

Financial highlights

• 2025 core earnings of $196 million, up 39% over prior year; total net premiums and contract charges earned increased 7%.

• Book value per share at year-end was $36.47, up 15.7% year-over-year; adjusted book value per share was $40.21, up 7.1%.

• Net income per diluted share for Q4 was $0.87, down 5.4% year-over-year; full-year was $3.90, up 57.3%.

• Core ROE (LTM) was 12.4%, up 3.0pts year-over-year.

• Property & Casualty core earnings more than doubled to $112 million; combined ratio improved over 8 points to 89.7.

Outlook and guidance

• 2026 core EPS guidance of $4.20–$4.50, a nearly 10% increase from normalized 2025 baseline.

• Management targets sustained, profitable growth in 2026 and beyond, supported by strong segment performance and lower catastrophe losses.

• Targets a 10% average compound annual growth rate in core EPS and sustainable 12–13% ROE over three years.

• Expense ratio improvement of 100–150 basis points expected, with most gains realized in later years of the plan.

• 2026 net investment income expected at $485–$495 million; CAT loss assumption set at $90 million.