10-K: Horace Mann Reports Strong 2025 Growth, Improved Profitability

Sentiment:

Annual Results 27 February 2026 1:09 PM

📋All filings for Horace Mann Educators CORP /DE/

Horace Mann Educators Corporation announced a significant increase in net income and improved underlying profitability across its Property & Casualty segment for the fiscal year ended December 31, 2025, alongside strategic investments in technology and distribution.

Capital raiseOn September 26, 2025, the company issued $300.0 million aggregate principal amount of 4.70% Senior Notes due October 1, 2030.The net proceeds from the 2025 Senior Notes were used to fully repay the $250.0 million aggregate principal amount of 4.50% Senior Notes due 2025.Remaining net proceeds are available for general corporate purposes.A "universal shelf" registration statement on Form S-3 was filed on March 8, 2024, allowing for the offer and sale from time to time of an indeterminate amount of various securities (debt, common stock, preferred stock, depositary shares, warrants, delayed delivery contracts and/or units) until March 8, 2027.A "shelf" registration statement on Form S-4 was filed on March 13, 2018, allowing for the issuance of up to 5,000,000 shares of common stock in connection with future acquisitions of other businesses, assets or securities.

Better than expectedNet income increased by 57.7% to $162.1 million, significantly higher than the previous year.Diluted EPS increased by 57.3% to $3.90.Property & Casualty segment net income surged by 128.9%, driven by improved underlying loss ratios and lower catastrophe losses.Net income return on equity (LTM) improved to 11.7% from 8.3%.

Summary

Net income increased by $59.3 million to $162.1 million in 2025, up 57.7% from $102.8 million in 2024.
Diluted earnings per share (EPS) rose to $3.90 in 2025 from $2.48 in 2024, a 57.3% increase.
Total revenues increased by 6.7% to $1,701.4 million in 2025 from $1,595.2 million in 2024.
Net premiums and contract charges earned increased by 7.2% to $1,228.4 million.
The Property & Casualty segment's net income increased 128.9% to $112.4 million, driven by improved underlying auto and property loss ratios and lower catastrophe losses.
The Life & Retirement segment's net income increased 0.9% to $56.8 million, with an annualized net interest spread of 184 basis points (up from 172 bps in 2024).
The Supplemental & Group Benefits segment's net income decreased 25.5% to $45.0 million, despite higher premiums earned, due to a higher benefits ratio in Group Benefits and increased operating expenses.
Operating expenses increased $51.1 million, reflecting investments in technology, marketing, and distribution, as well as costs related to pension plan termination and foundation donations.
Catastrophe losses decreased to $61.7 million in 2025 from $94.9 million in 2024.
Book value per share increased 15.7% to $36.47.
Net income return on equity (last twelve months) improved to 11.7% from 8.3%.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance, particularly in the Property & Casualty segment, with significant net income and EPS growth. Strategic investments and a positive outlook for 2026 contribute to a favorable sentiment, despite some increased operating expenses and a decline in the Supplemental & Group Benefits segment.

Positives

Net income increased by 57.7% to $162.1 million in 2025.
Diluted EPS increased by 57.3% to $3.90.
Total revenues grew by 6.7% to $1,701.4 million.
Property & Casualty segment net income surged by 128.9% to $112.4 million.
Improved underlying loss ratios in both auto and property lines contributed to Property & Casualty profitability.
Catastrophe losses decreased significantly to $61.7 million in 2025 from $94.9 million in 2024.
Life & Retirement segment saw an increase in annualized net interest spread to 184 basis points from 172 basis points.
Life insurance in force rose to $21.5 billion at year-end 2025.
Annuity contract deposits for variable and fixed annuities increased 6.7% to $482.8 million.
Cash value persistency in Life & Retirement rose to 91.7%.
Life annualized sales increased by 7.7% to $11.2 million.
Total Supplemental & Group Benefits segment sales were up 37.5% to $35.2 million.
Book value per share increased 15.7% to $36.47.
Net income return on equity (LTM) improved to 11.7%.
Successful issuance of $300.0 million in 4.70% Senior Notes due 2030 to repay existing debt.
Extension of Revolving Credit Facility commitment termination date to May 19, 2030.
Continued investment in technology infrastructure, including Generative Artificial Intelligence (GenAI), Guidewire, LifePro, and Workday Financials.
Effective internal control over financial reporting as of December 31, 2025.

Negatives

Supplemental & Group Benefits segment net income decreased by 25.5% to $45.0 million.
Higher benefits ratio in Group Benefits increased to 45.8% in 2025 from 37.8% in 2024.
Operating expenses increased $51.1 million (14.8%) due to technology, marketing, distribution investments, pension plan termination costs, and foundation donations.
Auto risks in force declined by 4.7% and property risks in force declined by 1.8%.
Life policies in force decreased by 0.6%.
Annuity contracts in force decreased by 2.7%.
Individual Supplemental premium persistency declined to 89.3% from 90.5%.
Net cash used in investing activities increased significantly by 85.6% to $252.1 million.
Net increase (decrease) in cash was negative $10.6 million in 2025, compared to a positive $8.4 million in 2024.
A $10.2 million pre-tax out-of-period correction of an error reduced net investment income in the second quarter of 2025.
Net unrealized investment losses on fixed maturity securities remained substantial at $245.5 million (net of tax) as of December 31, 2025.

Risks

Volatile financial markets and adverse economic environments can affect financial market risk, financial condition, and results of operations.
Changes in interest rates could materially affect financial condition and results of operations, including reducing investment spread and net income or increasing capital requirements.
Investment portfolios are subject to the risk of loss from economic conditions, adverse capital market conditions, volatility, credit spread changes, benchmark interest rate changes, and declines in collateral value.
The personal lines insurance, retirement, and supplemental group benefit markets are highly competitive, potentially impacting financial condition and results of operations.
Inability to recruit, develop, and retain high-producing agents or maintain market penetration in existing territories could adversely affect sales.
Failure to maintain secure access to educators (e.g., in schools) could adversely affect new business.
Lack of successful execution on acquisition integration strategies could result in impairment of goodwill and intangible assets.
Catastrophe events, a series of multiple catastrophe events, or a series of non-catastrophe severe weather events could have a material adverse effect on financial condition and results of operations.
Property and casualty loss reserves may not be adequate, leading to potential shortfalls.
Legacy commercial lines exposure (asbestos, environmental, sexual molestation claims) involves inherent uncertainty in loss reserve estimation.
Actual experience differing significantly from life and health pricing and reserving assumptions could negatively affect results of operations and financial condition.
A large-scale pandemic, the occurrence of terrorism, or military actions may have an adverse effect on the business.
Climate change may adversely affect financial position, results of operations, and cash flows due to increased frequency/severity of weather events, less reliable catastrophe models, and impact on investment creditworthiness.
Increased regulation adopted in response to potential changes in climate conditions may impact the company and its customers, including state insurance regulations that could impact the ability to manage property exposures.
Cybersecurity breaches could have an adverse effect on business and reputation, including operational disruptions, data loss, regulatory actions, and litigation.
Increasing reliance on Artificial Intelligence (AI) technologies introduces risks such as inaccuracies, regulatory scrutiny, unintended biases, data privacy and security concerns, and operational disruptions.
Successful execution of the business growth strategy is dependent on effective implementation of new or enhanced technology systems and applications, with inherent difficulties in replacing or modernizing older technologies.
Loss of key vendor relationships could affect operations.
Inability to attract, develop, engage, and retain top talent, maintain optimal staffing levels, and foster/sustain a highly inclusive and engaging culture contributes to success.
Losses due to defaults by third parties (issuers, reinsurers, borrowers) could reduce profitability or negatively affect the value of investments.
Uncollectible reinsurance, as well as reinsurance availability and pricing, can have a material adverse effect on business volume and profitability.
Concentration of credit risk with RGA Reinsurance Company for a large block of annuity business.
Any downgrade in claims-paying ratings, financial strength ratings, or credit ratings could adversely affect financial condition and results of operations.
Changes in tax rates, laws, or regulations could adversely impact financial results, particularly for tax-advantaged products.
Extensive regulation limits operating flexibility and could negatively impact financial results.
Legal, statutory, and regulatory developments could adversely impact the business by increasing costs or making it less profitable.
Litigation may harm financial strength or reduce profitability.
Events, including those external to operations, could damage reputation.
Risk of employees and independent agents taking excessive risks and/or failing to comply with internal policies and practices.

Future Outlook

For 2026, the company estimates full-year core income to be within a range of $4.20 to $4.50 per diluted share, targeting a core return on equity of 11%+. This outlook anticipates a Property & Casualty segment combined ratio in the low-mid 90s with approximately $90 million of catastrophe losses, a Life & Retirement segment long-term net interest spread between 220 and 230 basis points, and a Supplemental & Group Benefits segment target blended benefit ratio of 39%. Net investment income is projected between $485 million and $495 million pre-tax. The company also expects to further scale the application of Generative AI across Claims, Customer Care, and Operations in 2026 to improve cycle times, service quality, employee productivity, and operating efficiency.

Management Comments

"In the opinion of the Company's management, a discussion of these measures provides investors, financial analysts, rating agencies and other financial statement users with a better understanding of the significant factors that comprise the Company's periodic results of operations and how management evaluates the Company's financial performance."
"In the opinion of the Company's management, a discussion of the impact of catastrophes is meaningful for investors to understand the variability in periodic earnings."
"We are proud to be the largest multiline financial services company focused on helping America's educators and others who serve their communities achieve lifelong financial success."
"We believe the unique value of Horace Mann is providing solutions tailored for educators at each stage of their lives, empowering them to achieve lifelong financial success."
"Our motivation stems from our gratitude for educators: They are looking after our children's futures, and we believe they deserve someone to look after theirs."
"We are confident this approach positions Horace Mann to deliver sustained, profitable growth in service of educators, school districts, and trusted partners."
"Management believes this ratio [Underlying loss ratio] provides a valuable measure of the Company's underlying underwriting performance that may be obscured by the effects of catastrophe losses and prior years' reserve development, the amounts of which may be significant and may vary significantly between periods."
"Management believes that, based on data currently available, it has reasonably estimated the Company's ultimate losses."

Industry Context

StockSavvy.ai notes that Horace Mann operates in a highly competitive insurance and financial services market, facing competition from national providers like Allstate, Farmers, Liberty Mutual, Nationwide, State Farm, GEICO, Progressive, USAA, and technology start-ups in personal lines. In the retirement sector, competitors include AXA, Life Insurance Company of the Southwest, Security Benefit, TIAA-CREF, VALIC, and Voya Financial, Inc., with increased competition in the 403(b) market due to regulatory changes making it more attractive to 401(k) plan providers. The company's focus on the K-12 educator market provides a niche advantage, but also exposes it to specific risks related to school access and state-sponsored plans. The industry is grappling with evolving climate change risks, leading to increased catastrophe losses and regulatory scrutiny, which Horace Mann is addressing through reinsurance and risk modeling. The increasing use of AI across the insurance industry, as highlighted by Horace Mann's investments in GenAI, reflects a broader trend towards leveraging technology for efficiency, customer engagement, and risk management, while also navigating new regulatory landscapes.

Comparison to Industry Standards

The company's Property & Casualty segment's combined ratio of 96.5% for auto and 78.3% for property (excluding other liability) indicates profitable underwriting, as a combined ratio less than 100% generally signifies underwriting profit. This compares favorably to many industry peers who might struggle with higher combined ratios, especially in volatile personal lines markets, where some larger multi-line insurers might report combined ratios closer to 98-102% in challenging years.
Horace Mann's core return on equity target of 11%+ for 2026 is a reasonable target within the insurance industry, where ROE can vary widely but often falls in the 8-15% range for well-performing companies. This is in line with or slightly above the average for some regional insurers but may be lower than top-tier national carriers with broader market reach and scale.
The company's investment portfolio, with 97.6% investment grade and an average credit quality of A+, aligns with conservative industry standards for insurance companies, prioritizing stability and income generation to support policy liabilities. This is comparable to the investment strategies of large, established insurers like MetLife or Prudential, which also maintain high-quality fixed-income portfolios.
The filing notes that the 403(b) market has become more comparable to the 401(k) market, attracting larger companies experienced in 401(k) plans, including both insurance and mutual fund companies. This implies increased competition from established players like Fidelity, Vanguard, and T. Rowe Price, which are dominant in the 401(k) space and now potentially expanding their 403(b) offerings.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Human Capital Oversight	The Board of Directors, through its Compensation Committee, oversees the human capital management strategy. The Chief Administrative Officer has executive responsibility for human capital management and regularly reports to senior management and the Board.	Ongoing	Reinforces commitment to ethical conduct, inclusion, and accountability, aligning talent strategy with long-term goals.
Pension Plan Termination	The Board of Directors approved a plan to terminate the Horace Mann Pension Plan on September 3, 2025, which became effective on November 30, 2025, and was completed on December 11, 2025. This involved a pre-tax settlement charge of $7.1 million within operating expenses.	December 11, 2025	Eliminates primary responsibility and significant risks related to the Plan's obligations, resulting in a one-time settlement charge.
Credit Agreement Amendment	The Fourth Amendment to the Amended and Restated Credit Agreement, dated May 19, 2025, extended the commitment termination date to May 19, 2030, and replaced the Eurodollar-based interest rate benchmark with a Term SOFR Rate.	May 19, 2025	Enhances liquidity and capital management flexibility by extending the credit facility term and updating interest rate benchmarks.
Executive Compensation Plan Amendment	In May 2024, shareholders approved an amendment and restatement of the 2010 Comprehensive Executive Compensation Plan, increasing the number of shares of common stock reserved for issuance by 3,000,000.	May 2024	Provides additional capacity for share-based incentives to attract, retain, and motivate employees and non-employee Directors, aligning compensation with shareholder interests.
Income Tax Disclosure Standards	Adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, on a retrospective basis.	December 31, 2025	Improves transparency of income tax disclosures with consistent categories and greater disaggregation of information; no net impact on financial position, results of operations, or cash flows.
Cybersecurity Risk Management	Maintains a cybersecurity risk management program based on recognized standards (e.g., NIST Cybersecurity Framework). The Chief Information Security Officer (CISO) oversees the program and reports quarterly to the Audit Committee. The Disclosure Committee reviews cybersecurity incidents for materiality.	Ongoing	Strengthens protection against evolving cyber threats, ensures compliance with regulatory requirements, and mitigates potential reputational and financial harm.

Stakeholder Impact

Shareholders: Positive impact from increased net income, EPS, book value per share, and return on equity. Share repurchase program and stable dividends enhance shareholder value. Future returns are subject to market volatility, competition, and climate change risks.
Employees: Workforce planning includes a voluntary Early Retirement Offering in December 2025. Investments in technology, including Generative AI, aim to improve productivity and efficiency, potentially impacting roles. The company notes increased competition in hiring and retaining employees.
Customers (Educators): Continued focus on tailored products and services, including the Educator Advantage package. Omni-channel distribution aims to improve access and service quality. Product offerings include auto, property, life, retirement, and supplemental health insurance.
School Districts/Employers: Enhanced value proposition through group benefits and open architecture retirement platforms. The company maintains business-to-business relationships with over half of U.S. K-12 school districts.
Creditors: Compliance with all financial covenants and strong financial strength ratings provide assurance. Debt issuance and repayment activities are managed to maintain capital structure.
Suppliers/Vendors: Increased reliance on third-party vendors for services and products, including technology, introduces vendor risk, which the company monitors through cybersecurity due diligence.

Next Steps

Further scale the application of Generative AI across Claims, Customer Care, and Operations in 2026.
Continue to enhance governance, security, and compliance processes for AI, informed by industry frameworks such as NIST.
Reinvest efficiencies generated through technology and automation initiatives to support strategic growth priorities.
Monitor developments and assess potential impact of future tax law changes.
File Proxy Statement for the 2026 Annual Meeting of Shareholders by April 10, 2026.
Continue share repurchase program under the remaining $55.5 million authorization.

Key Dates

Date	Description
1945	Company founded in Springfield, Illinois, by two school teachers to provide automobile insurance to association members.
1949	Company expanded product line to include group and individual life insurance.
1961	Company expanded product line to include 403(b) tax-qualified retirement annuities.
December 23, 1963	Horace Mann Insurance Company (HMIC) commenced business.
1965	Company expanded product line to include homeowners insurance.
November 2, 1967	Horace Mann Insurance Company adopted its present name.
1968	INA Corporation acquired a 25% interest in Horace Mann.
January 1, 1975	Company entered into a quota share retrocession treaty for commercial lines.
January 1975	INA Corporation acquired the entire company.
1982	INA Corporation merged with Connecticut General Corporation, forming CIGNA Corporation.
August 1989	An investor group acquired HMEC from CIGNA.
November 1991	HMEC began trading on the New York Stock Exchange (NYSE) following an initial public offering.
1994	Goodwill recognized with respect to the acquisition of Horace Mann Property & Casualty Insurance Company.
1996	Shareholders approved authorization of 1,000,000 shares of $0.001 par value preferred stock.
2002	Qualified defined benefit plan frozen.
2006	Experience Life product discontinued.
2007	Began including losses from events meeting the definition of a covered loss in the primary catastrophe excess of loss reinsurance contract.
2010	Shareholders approved the 2010 Comprehensive Executive Compensation Plan.
2012	Shareholders approved the implementation of a fungible share pool under the Comprehensive Plan.
2013	Horace Mann Life Insurance Company (HMLIC) became a member of the Federal Home Loan Bank (FHLB).
March 13, 2018	Filed a 'shelf' registration statement on Form S-4 for up to 5,000,000 shares of common stock for future acquisitions.
October 30, 2018	Stock Purchase Agreement for Benefit Consultants Group, Inc. (BCG).
December 10, 2018	Purchase Agreement for NTA Life Enterprises, LLC (NTA).
2019	Acquired all equity interests in NTA Life Enterprises, LLC (NTA) and Benefit Consultants Group, Inc. (BCG).
January 2020	The California Consumer Privacy Act (CCPA) went into effect.
March 3, 2021	HMEC 2010 Comprehensive Executive Compensation Plan amended and restated.
July 12, 2021	Second Amendment to Credit Agreement.
January 1, 2022	Adopted ASU 2018-12 for Liabilities for future policy benefits on a modified retrospective basis.
January 1, 2022	Acquired Madison National Life Insurance Company, Inc. (MNL).
Second Quarter 2022	Company entered into reverse repurchase agreements.
May 25, 2022	Board authorized a $50 million share repurchase plan (2022 Program).
January 1, 2023	The California Privacy Rights Act (CPRA) became effective.
2023	Colorado, Connecticut, Utah, and Virginia enacted similar privacy laws.
September 15, 2023	Issued $300.0 million aggregate principal amount of 7.25% Senior Notes due 2028.
October 1, 2023	Performed a qualitative goodwill impairment test.
December 2023	FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures.
March 8, 2024	Filed a 'universal shelf' registration statement on Form S-3.
March 2024	SEC adopted final rules requiring enhanced climate-related disclosures (effectiveness stayed due to legal challenges).
May 2024	Shareholders approved an amendment and restatement of the Comprehensive Plan, increasing the number of shares of common stock reserved for issuance by 3,000,000.
September 23, 2024	2024 Amended and Restated Bylaws of HMEC filed.
October 1, 2024	Performed a qualitative goodwill impairment test.
December 31, 2024	End of fiscal year.
May 13, 2025	Board authorized a new share repurchase program of up to $50 million (2025 Program).
May 19, 2025	Fourth Amendment to Credit Agreement, extending the commitment termination date to May 19, 2030.
June 10, 2025	Chief Executive Officer (CEO) submitted the Annual Section 12(a) CEO Certification to the NYSE without any qualifications.
July 4, 2025	The One Big Beautiful Bill Act was enacted into U.S. law.
Second Quarter 2025	Company recorded a reduction in net investment income due to an immaterial out-of-period correction of an error.
September 3, 2025	Board of Directors approved a plan to effect the termination of the Horace Mann Pension Plan.
September 26, 2025	Issued $300.0 million aggregate principal amount of 4.70% Senior Notes due October 1, 2030.
September 29, 2025	Issued a notice of redemption for all outstanding 4.50% Senior Notes due 2025.
October 1, 2025	Performed a qualitative goodwill impairment test.
October 14, 2025	Redemption of 4.50% Senior Notes due 2025 occurred.
November 30, 2025	Termination of the Horace Mann Pension Plan became effective.
December 2025	Made a cash contribution of $3.0 million to the Horace Mann Pension Plan.
December 11, 2025	Termination of the Horace Mann Pension Plan completed.
December 23, 2025	CEO Marita Zuraitis adopted a new 10b5-1 plan.
December 31, 2025	End of fiscal year.
February 17, 2026	Shares outstanding were 40,449,550, with approximately 43,250 holders of common stock.
February 27, 2026	Date of Annual Report on Form 10-K filing.
April 10, 2026	Latest date for filing the Proxy Statement for the 2026 Annual Meeting of Shareholders.
December 15, 2026	Effective date for ASU 2024-04, Disaggregation of Income Statement Expenses, for annual periods.
March 8, 2027	Universal shelf registration statement on Form S-3 remains effective until this date.
March 31, 2027	CEO's 10b5-1 plan expires.
September 15, 2028	Maturity date for 7.25% Senior Notes.
May 19, 2030	Revolving Credit Facility commitment termination date.
October 1, 2030	Maturity date for 4.70% Senior Notes.

Recommendation

buy

The company demonstrated strong financial performance in 2025 with significant increases in net income, EPS, and ROE, primarily driven by improved underwriting in the Property & Casualty segment and strategic investments. The positive outlook for 2026, including targeted core income and ROE, coupled with ongoing share repurchases and a stable dividend, suggests continued value creation for shareholders. While increased operating expenses and a decline in one segment are noted, the overall trajectory and strategic focus on the education market, enhanced by technology adoption, position the company for sustained growth.

Keywords

Insurance, Educators, Property & Casualty, Life Insurance, Retirement Solutions, Annuities, Supplemental Health, Group Benefits, SEC Filing, 10-K, Financial Performance, Risk Management, Cybersecurity, Artificial Intelligence, Climate Change, Share Repurchase, Dividends, Financial Services

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