Horace Mann Educators ((HMN)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Horace Mann Educators’ latest earnings call conveyed a strong overall performance, marked by record-breaking core EPS and robust growth across multiple segments. Despite facing challenges such as increased catastrophe losses and higher mortality in the Life and Retirement segment, the company demonstrated solid progress towards its long-term goals and expressed confidence in its growth strategy.
Record First Quarter Core EPS
Horace Mann Educators reported a record core EPS of $1.07, representing a remarkable 73% increase over the previous year. This achievement marks a significant milestone for the company, setting a new record for the first quarter.
Strong Property and Casualty Segment Performance
The Property and Casualty segment showed impressive results with a combined ratio of 89.4%, a 10.5 point improvement from the prior year. This performance highlights the company’s effective management and strategic initiatives in this segment.
Significant Net Investment Income Growth
Total net investment income reached $116 million, a 10% increase from the previous year. Notably, income from the internally managed portfolio rose by 15%, showcasing the company’s successful investment strategies.
Robust Sales Growth Across Segments
The company experienced robust sales growth, with individual supplemental sales up 61%, auto sales increasing by 8%, and annuity net contract deposits rising by 6%. This growth reflects strong customer demand and effective sales strategies.
Increased Shareholder Returns
Horace Mann continued to enhance shareholder value, with the board approving a dividend increase for the 17th consecutive year and executing $7 million in share repurchases.
Environmental Commitment Achievements
The company achieved a significant reduction in its environmental impact, with a 61% reduction in Scope 1 and Scope 2 emissions from the 2019 baseline, underscoring its commitment to sustainability.
Higher Life and Retirement Segment Mortality
Earnings in the Life and Retirement segment were below the prior year due to higher mortality rates, although these remained within expected actuarial ranges.
Increased Catastrophe Losses
Catastrophe losses amounted to $16.4 million, slightly above the previous year. However, excluding California wildfires, these losses were below historical averages, indicating effective risk management.
California Rate Increases Impacting New Business
Cumulative rate increases in California over the last two years have had a marginal impact on auto new business, highlighting the challenges of operating in this market.
Forward-Looking Guidance
Looking ahead, Horace Mann Educators reaffirmed its 2025 core EPS guidance range of $3.85 to $4.15, emphasizing its strategic focus on sustained profitable growth. The company aims to leverage its diversified multiline business model to achieve these targets.
In summary, Horace Mann Educators’ earnings call highlighted a strong performance with record core EPS and robust growth across segments. Despite challenges in the Life and Retirement segment and increased catastrophe losses, the company remains confident in its strategic direction and growth prospects.