Horace Mann's Q1 2025: Unpacking Contradictions in Catastrophe Loss, Sales Growth, and Pricing Strategy

Catastrophe loss expectations, supplemental sales growth and previous year sales, pricing flexibility and approach, catastrophe activity and seasonality, supplemental and group benefits demand and utilization are the key contradictions discussed in Horace Mann Educators Corporation's latest 2025Q1 earnings call.



Strong Financial Performance:
- Horace Mann Educators reported core EPS of $1.07 in Q1 2025, a sizable increase over the prior year and a record first quarter.
- The growth was driven by solid business profitability and strong growth momentum, highlighting the ability of the company's multiline business model to deliver consistent and reliable earnings.

Property and Casualty Segment Performance:
- The Property and Casualty (P&C) segment had a reported combined ratio of 89.4%, a 10.5 point improvement over the prior year.
- This improvement was due to the profitability restoration work completed in 2024, lower property frequency, and favorable prior year development in both auto and property lines.

Investment Income Growth:
- Total net investment income was $116 million, a 10% increase over the prior year.
- This growth was driven by higher limited partnership returns and continued strong returns from the company's growing fixed income portfolio.

Sales Growth Across Segments:
- Individual supplemental sales were up 61%, auto sales rose by 8%, and annuity net contract deposits increased by 6%.
- The momentum was driven by more points of distribution, improved agent productivity, and efficient lead generation, supported by investments in omnichannel distribution capabilities.

Dividend and Shareholder Returns:
- In March, the Board of Directors approved a 3% increase to the quarterly shareholder dividend, marking the 17th consecutive year of dividend increases.
- The company also executed on its share repurchase program, returning $7 million to shareholders in share repurchases year-to-date through May 2nd.