Horace Mann Reports Record EPS and Raises Guidance

Horace Mann Educators ((HMN)) has held its Q3 earnings call. Read on for the main highlights of the call.

Horace Mann Educators’ recent earnings call showcased a highly positive sentiment, driven by record earnings per share (EPS), increased guidance, and strong performance across all segments. Despite minor setbacks such as decreased auto retention and elevated expenses due to growth investments, the company’s robust execution and strategic positioning were emphasized, leaving investors optimistic about its future trajectory.

Record Third Quarter Core EPS

Horace Mann reported a record third quarter core EPS of $1.36, marking a significant 64% increase over the previous year. This impressive growth underscores the company’s effective strategies and operational efficiency.

Significant Increase in Full Year Core EPS Guidance

The company has raised its full-year core EPS guidance to a range of $4.50 to $4.70, reflecting confidence in its ongoing performance and future prospects.

Strong Performance Across All Segments

Business profitability across all segments met or exceeded target levels, with total revenues for the quarter rising by 6% and net premiums and contract charges earned increasing by over 7%.

Growth in Supplemental and Group Benefits Segment

The Supplemental and Group Benefits segment experienced remarkable growth, with individual supplemental sales increasing by 40% and Group Benefits sales nearly doubling during the quarter.

Decreased Catastrophe Losses

Pretax catastrophe losses year-to-date were reduced to $56 million from $91 million last year, benefiting from lighter severe weather activity.

Strategic Partnerships and Brand Engagement

Horace Mann has forged new partnerships with Teach for America and Grand Canyon University, enhancing brand awareness through events such as Crayola Creativity Week.

Shareholder Value Creation

The company returned $20 million of capital to shareholders through share repurchases and $43 million through dividends, demonstrating its commitment to shareholder value.

Decreased Household Retention in Auto

Household retention in auto decreased to 84% from the prior period, highlighting a challenge the company aims to address.

Elevated Expense Levels

Expense levels are anticipated to remain elevated in the near term as Horace Mann invests in growth and scales its operations.

Forward-Looking Guidance

Looking ahead, Horace Mann Educators remains committed to achieving a 10% compound annual growth rate in core EPS and maintaining a 12% to 13% core return on equity by 2028. The company is focusing on strategic investments, boosting brand engagement in the education sector, and enhancing digital lead generation, with website visits up by 120% year-over-year.

In summary, Horace Mann Educators’ earnings call conveyed a highly positive outlook, with record EPS, increased guidance, and strong segment performances. The company’s strategic initiatives and commitment to growth indicate a promising future, despite minor challenges in auto retention and elevated expenses.