Horace Mann Educators (HM9) Q2 2026 Earnings Report

The call emphasized strong operating results across segments, notable revenue and sales growth (especially in individual supplemental, group benefits, and life), a meaningful improvement in P&C profitability, increased full-year EPS guidance, and solid capital metrics (tangible book value growth and ongoing shareholder returns). Headwinds cited were a lowered net investment income outlook driven by alternative strategies in a higher-for-longer rate environment, a higher blended benefit ratio in the growing group benefits mix (anticipated and priced), flat P&C premiums, and some seasonality/near-term utilization risk in paid family & medical leave. On balance, the positive operating momentum, guidance raise, and strategic M&A/distribution progress outweigh the manageable near-term headwinds.

Management raised full‑year 2026 core earnings guidance to $4.60–$4.90 per share after a strong Q2 (core EPS $1.17, +>10% YoY) and a trailing‑12‑month core ROE of 12.8%; the update reflected lowered full‑year catastrophe expectations of ~$75M (from $90M), reduced net investment income guidance of $465M–$475M (managed portfolio income $365M–$375M), and a higher blended individual supplemental and group benefits benefit ratio of ~42%, with interest expense and other corporate items of $35M–$40M. Quarterly operating metrics supporting the raise included total revenues +8% YoY, P&C combined ratio improved 7 points to 89.6 (P&C core earnings $26M, +56% YoY), net written premiums of $212M (flat) with property premiums +6%, life sales +20%, individual supplemental & group benefits sales growth noted as +44% (segment individual sales +5% in Q2), persistency ~96% for life and ~89% for individual supplemental, auto household retention ~84% and other business retention near/above 90%, online quoting +~10%, new‑money fixed income yield 5.85% for the quarter, tangible book value per share +10% YoY, $15M returned as dividends and ~$37M remaining buyback authorization. Management reiterated long‑term targets of 10% CAGR in core EPS and sustainable ROE of 12%–13%, noted that announced acquisitions (not in 2026 guidance) are expected to be immediately accretive in 2027 (~100 bps ROE accretion and ~$0.40–$0.50 annual run‑rate EPS) with a 6–7 year TBV payback by standard methodology.