Delaware | 37-0911756 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, $0.001 par value | HMN | New York Stock Exchange |
Large accelerated filer | Accelerated filer | ☐ | ||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||||||
Emerging growth company | ☐ |
Page | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
/s/ KPMG LLP | |||||
KPMG LLP | |||||
Chicago, Illinois | |||||
Horace Mann Educators Corporation | 1 | First Quarter 2023 Form 10-Q |
March 31, 2023 | December 31, 2022 | |||||||||||||
Assets | ||||||||||||||
Investments | ||||||||||||||
Fixed maturity securities, available for sale, at fair value (amortized cost, net 2023, $5,803.3; 2022, $5,756.9) | $ | 5,350.0 | $ | 5,185.0 | ||||||||||
Equity securities at fair value | 98.8 | 99.6 | ||||||||||||
Limited partnership interests | 1,045.4 | 983.7 | ||||||||||||
Short-term and other investments | 291.1 | 319.3 | ||||||||||||
Total investments | 6,785.3 | 6,587.6 | ||||||||||||
Cash | 27.4 | 42.8 | ||||||||||||
Deferred policy acquisition costs | 331.6 | 330.6 | ||||||||||||
Reinsurance balances receivable | 467.6 | 468.0 | ||||||||||||
Deposit asset on reinsurance | 2,518.0 | 2,516.6 | ||||||||||||
Intangible assets | 181.5 | 185.2 | ||||||||||||
Goodwill | 54.3 | 54.3 | ||||||||||||
Other assets | 333.5 | 328.7 | ||||||||||||
Separate Account variable annuity assets | 2,954.7 | 2,792.3 | ||||||||||||
Total assets | $ | 13,653.9 | $ | 13,306.1 | ||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||
Policy liabilities | ||||||||||||||
Future policy benefit reserves | $ | 1,772.4 | $ | 1,718.0 | ||||||||||
Policyholders' account balances | 5,234.6 | 5,260.6 | ||||||||||||
Unpaid claims and claim expenses | 574.8 | 564.0 | ||||||||||||
Unearned premiums | 263.3 | 266.1 | ||||||||||||
Total policy liabilities | 7,845.1 | 7,808.7 | ||||||||||||
Other policyholder funds | 887.1 | 809.3 | ||||||||||||
Other liabilities | 329.8 | 299.5 | ||||||||||||
Short-term debt | 249.0 | 249.0 | ||||||||||||
Long-term debt | 249.0 | 249.0 | ||||||||||||
Separate Account variable annuity liabilities | 2,954.7 | 2,792.3 | ||||||||||||
Total liabilities | 12,514.7 | 12,207.8 | ||||||||||||
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | — | — | ||||||||||||
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2023, 66,710,189; 2022, 66,618,465 | 0.1 | 0.1 | ||||||||||||
Additional paid-in capital | 503.1 | 502.6 | ||||||||||||
Retained earnings | 1,505.2 | 1,512.4 | ||||||||||||
Accumulated other comprehensive income (loss), net of tax: | ||||||||||||||
Net unrealized investment losses on fixed maturity securities | (356.4) | (449.6) | ||||||||||||
Net reserve remeasurements attributable to discount rates | 17.8 | 59.0 | ||||||||||||
Net funded status of benefit plans | (8.8) | (8.8) | ||||||||||||
Treasury stock, at cost, 2023, 25,842,693 shares; 2022, 25,714,153 shares | (521.8) | (517.4) | ||||||||||||
Total shareholders’ equity | 1,139.2 | 1,098.3 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 13,653.9 | $ | 13,306.1 |
September 30, 2017 | December 31, 2016 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Investments | ||||||||
Fixed maturity securities, available for sale, at fair value (amortized cost 2017, $7,194,397; 2016, $7,152,127) | $ | 7,630,634 | $ | 7,456,708 | ||||
Equity securities, available for sale, at fair value (cost 2017, $140,200; 2016, $134,013) | 159,275 | 141,649 | ||||||
Short-term and other investments | 547,227 | 401,015 | ||||||
Total investments | 8,337,136 | 7,999,372 | ||||||
Cash | 6,692 | 16,670 | ||||||
Deferred policy acquisition costs | 257,214 | 267,580 | ||||||
Goodwill | 47,396 | 47,396 | ||||||
Other assets | 344,443 | 321,874 | ||||||
Separate Account (variable annuity) assets | 2,051,467 | 1,923,932 | ||||||
Total assets | $ | 11,044,348 | $ | 10,576,824 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Policy liabilities | ||||||||
Investment contract and life policy reserves | $ | 5,540,045 | $ | 5,447,969 | ||||
Unpaid claims and claim expenses | 341,784 | 329,888 | ||||||
Unearned premiums | 262,029 | 246,274 | ||||||
Total policy liabilities | 6,143,858 | 6,024,131 | ||||||
Other policyholder funds | 717,369 | 708,950 | ||||||
Other liabilities | 493,810 | 378,620 | ||||||
Long-term debt | 247,403 | 247,209 | ||||||
Separate Account (variable annuity) liabilities | 2,051,467 | 1,923,932 | ||||||
Total liabilities | 9,653,907 | 9,282,842 | ||||||
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued | — | — | ||||||
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2017, 65,382,877; 2016, 64,917,683 | 65 | 65 | ||||||
Additional paid-in capital | 462,068 | 453,479 | ||||||
Retained earnings | 1,165,282 | 1,155,732 | ||||||
Accumulated other comprehensive income (loss), net of taxes: | ||||||||
Net unrealized investment gains on fixed maturity and equity securities | 255,718 | 175,738 | ||||||
Net funded status of benefit plans | (11,817 | ) | (11,817 | ) | ||||
Treasury stock, at cost, 2017, 24,721,372 shares; 2016, 24,672,932 shares | (480,875 | ) | (479,215 | ) | ||||
Total shareholders’ equity | 1,390,441 | 1,293,982 | ||||||
Total liabilities and shareholders’ equity | $ | 11,044,348 | $ | 10,576,824 |
Horace Mann Educators Corporation | 2 | First Quarter 2023 Form 10-Q |
Three Months Ended March 31, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Statements of Operations | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Net premiums and contract charges earned | $ | 255.9 | $ | 255.8 | ||||||||||||||||||||||
Net investment income | 100.4 | 97.9 | ||||||||||||||||||||||||
Net investment losses | (3.9) | (15.5) | ||||||||||||||||||||||||
Other income | 1.5 | 8.5 | ||||||||||||||||||||||||
Total revenues | 353.9 | 346.7 | ||||||||||||||||||||||||
Benefits, losses and expenses | ||||||||||||||||||||||||||
Benefits, claims and settlement expenses | 183.2 | 175.2 | ||||||||||||||||||||||||
Interest credited | 48.7 | 39.7 | ||||||||||||||||||||||||
Operating expenses | 79.8 | 76.7 | ||||||||||||||||||||||||
DAC amortization expense | 23.7 | 22.0 | ||||||||||||||||||||||||
Intangible asset amortization expense | 3.7 | 4.2 | ||||||||||||||||||||||||
Interest expense | 6.7 | 3.9 | ||||||||||||||||||||||||
Total benefits, losses and expenses | 345.8 | 321.7 | ||||||||||||||||||||||||
Income before income taxes | 8.1 | 25.0 | ||||||||||||||||||||||||
Income tax expense | 1.5 | 4.7 | ||||||||||||||||||||||||
Net income | $ | 6.6 | $ | 20.3 | ||||||||||||||||||||||
Net income per share | ||||||||||||||||||||||||||
Basic | $ | 0.16 | $ | 0.48 | ||||||||||||||||||||||
Diluted | $ | 0.16 | $ | 0.48 | ||||||||||||||||||||||
Weighted average number of shares and equivalent shares | ||||||||||||||||||||||||||
Basic | 41.3 | 41.9 | ||||||||||||||||||||||||
Diluted | 41.4 | 42.1 | ||||||||||||||||||||||||
Statements of Comprehensive Income (Loss) | ||||||||||||||||||||||||||
Net income | $ | 6.6 | $ | 20.3 | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
Change in net unrealized investment losses on fixed maturity securities | 93.2 | (334.1) | ||||||||||||||||||||||||
Change in net reserve remeasurements attributable to discount rates | (41.2) | 181.5 | ||||||||||||||||||||||||
Change in net funded status of benefit plans | — | — | ||||||||||||||||||||||||
Other comprehensive income (loss) | 52.0 | (152.6) | ||||||||||||||||||||||||
Comprehensive income (loss) | $ | 58.6 | $ | (132.3) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues | ||||||||||||||||
Insurance premiums and contract charges earned | $ | 198,935 | $ | 191,050 | $ | 590,375 | $ | 564,860 | ||||||||
Net investment income | 92,320 | 94,847 | 275,025 | 270,685 | ||||||||||||
Net realized investment gains (losses) | (3,486 | ) | 3,985 | (1,656 | ) | 6,911 | ||||||||||
Other income | 2,048 | 1,294 | 4,813 | 3,581 | ||||||||||||
Total revenues | 289,817 | 291,176 | 868,557 | 846,037 | ||||||||||||
Benefits, losses and expenses | ||||||||||||||||
Benefits, claims and settlement expenses | 134,895 | 135,710 | 444,870 | 403,631 | ||||||||||||
Interest credited | 50,078 | 48,658 | 148,200 | 142,924 | ||||||||||||
Policy acquisition expenses amortized | 24,210 | 24,474 | 73,904 | 73,113 | ||||||||||||
Operating expenses | 44,172 | 44,337 | 139,156 | 130,478 | ||||||||||||
Interest expense | 2,978 | 2,975 | 8,879 | 8,858 | ||||||||||||
Total benefits, losses and expenses | 256,333 | 256,154 | 815,009 | 759,004 | ||||||||||||
Income before income taxes | 33,484 | 35,022 | 53,548 | 87,033 | ||||||||||||
Income tax expense | 6,933 | 8,099 | 9,418 | 23,091 | ||||||||||||
Net income | $ | 26,551 | $ | 26,923 | $ | 44,130 | $ | 63,942 | ||||||||
Net income per share | ||||||||||||||||
Basic | $ | 0.64 | $ | 0.66 | $ | 1.07 | $ | 1.55 | ||||||||
Diluted | $ | 0.64 | $ | 0.65 | $ | 1.06 | $ | 1.55 | ||||||||
Weighted average number of common and common equivalent shares (in thousands) | ||||||||||||||||
Basic | 41,433 | 41,092 | 41,337 | 41,155 | ||||||||||||
Diluted | 41,575 | 41,347 | 41,467 | 41,386 | ||||||||||||
Net realized investment gains (losses) | ||||||||||||||||
Total other-than-temporary impairment losses on securities | $ | (6,091 | ) | $ | (160 | ) | $ | (12,452 | ) | $ | (7,686 | ) | ||||
Portion of losses recognized in other comprehensive income | — | — | — | (290 | ) | |||||||||||
Net other-than-temporary impairment losses on securities recognized in earnings | (6,091 | ) | (160 | ) | (12,452 | ) | (7,396 | ) | ||||||||
Realized investment gains, net | 2,605 | 4,145 | 10,796 | 14,307 | ||||||||||||
Total | $ | (3,486 | ) | $ | 3,985 | $ | (1,656 | ) | $ | 6,911 |
Horace Mann Educators Corporation | 3 | First Quarter 2023 Form 10-Q |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Comprehensive income | ||||||||||||||||
Net income | $ | 26,551 | $ | 26,923 | $ | 44,130 | $ | 63,942 | ||||||||
Other comprehensive income, net of taxes: | ||||||||||||||||
Change in net unrealized investment gains on fixed maturity and equity securities | 12,208 | 7,638 | 79,980 | 162,124 | ||||||||||||
Change in net funded status of benefit plans | — | — | — | — | ||||||||||||
Other comprehensive income | 12,208 | 7,638 | 79,980 | 162,124 | ||||||||||||
Total | $ | 38,759 | $ | 34,561 | $ | 124,110 | $ | 226,066 |
Three Months Ended March 31, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Common stock, $0.001 par value | ||||||||||||||||||||||||||
Beginning balance | $ | 0.1 | $ | 0.1 | ||||||||||||||||||||||
Options exercised | — | — | ||||||||||||||||||||||||
Conversion of common stock units | — | — | ||||||||||||||||||||||||
Conversion of restricted stock units | — | — | ||||||||||||||||||||||||
Ending balance | 0.1 | 0.1 | ||||||||||||||||||||||||
Additional paid-in capital | ||||||||||||||||||||||||||
Beginning balance | 502.6 | 495.3 | ||||||||||||||||||||||||
Options exercised and conversion of common and restricted stock units | (1.4) | (0.6) | ||||||||||||||||||||||||
Share-based compensation expense | 1.9 | 1.9 | ||||||||||||||||||||||||
Ending balance | 503.1 | 496.6 | ||||||||||||||||||||||||
Retained earnings | ||||||||||||||||||||||||||
Beginning balance | 1,512.4 | 1,547.0 | ||||||||||||||||||||||||
Net income | 6.6 | 20.3 | ||||||||||||||||||||||||
Dividends, 2023, $0.33 per share; 2022, $0.32 per share | (13.8) | (13.5) | ||||||||||||||||||||||||
Effect of adopting ASU 2018-12(1) | — | (0.8) | ||||||||||||||||||||||||
Ending balance | 1,505.2 | 1,553.0 | ||||||||||||||||||||||||
Accumulated other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
Beginning balance | (399.4) | (50.0) | ||||||||||||||||||||||||
Change in net unrealized investment losses on fixed maturity securities | 93.2 | (334.1) | ||||||||||||||||||||||||
Change in net reserve remeasurements attributable to discount rates | (41.2) | 181.5 | ||||||||||||||||||||||||
Change in net funded status of benefit plans | — | — | ||||||||||||||||||||||||
Ending balance | (347.4) | (202.6) | ||||||||||||||||||||||||
Treasury stock, at cost | ||||||||||||||||||||||||||
Beginning balance | (517.4) | (493.4) | ||||||||||||||||||||||||
Treasury stock acquired - share repurchase authorization | (4.4) | (2.2) | ||||||||||||||||||||||||
Ending balance | (521.8) | (495.6) | ||||||||||||||||||||||||
Shareholders' equity at end of period | $ | 1,139.2 | $ | 1,351.5 |
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Common stock, $0.001 par value | ||||||||
Beginning balance | $ | 65 | $ | 65 | ||||
Options exercised, 2017, 156,211 shares; 2016, 114,507 shares | — | — | ||||||
Conversion of common stock units, 2017, 15,981 shares; 2016, 15,629 shares | — | — | ||||||
Conversion of restricted stock units, 2017, 293,002 shares; 2016, 188,207 shares | — | — | ||||||
Ending balance | 65 | 65 | ||||||
Additional paid-in capital | ||||||||
Beginning balance | 453,479 | 442,648 | ||||||
Options exercised and conversion of common stock units and restricted stock units | 2,773 | 2,045 | ||||||
Share-based compensation expense | 5,816 | 6,066 | ||||||
Ending balance | 462,068 | 450,759 | ||||||
Retained earnings | ||||||||
Beginning balance | 1,155,732 | 1,116,277 | ||||||
Net income | 44,130 | 63,942 | ||||||
Cash dividends, 2017, $0.825 per share; 2016, $0.795 per share | (34,580 | ) | (33,241 | ) | ||||
Ending balance | 1,165,282 | 1,146,978 | ||||||
Accumulated other comprehensive income, net of taxes | ||||||||
Beginning balance | 163,921 | 163,373 | ||||||
Change in net unrealized investment gains on fixed maturity and equity securities | 79,980 | 162,124 | ||||||
Change in net funded status of benefit plans | — | — | ||||||
Ending balance | 243,901 | 325,497 | ||||||
Treasury stock, at cost | ||||||||
Beginning balance, 2017, 24,672,932 shares; 2016, 23,971,522 shares | (479,215 | ) | (457,702 | ) | ||||
Acquisition of shares, 2017, 48,440 shares; 2016, 701,410 shares | (1,660 | ) | (21,513 | ) | ||||
Ending balance, 2017, 24,721,372 shares; 2016, 24,672,932 shares | (480,875 | ) | (479,215 | ) | ||||
Shareholders’ equity at end of period | $ | 1,390,441 | $ | 1,444,084 |
Horace Mann Educators Corporation | 4 | First Quarter 2023 Form 10-Q |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash flows - operating activities | ||||||||||||||
Net income | $ | 6.6 | $ | 20.3 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Net investment losses | 3.9 | 15.5 | ||||||||||||
Depreciation and intangible asset amortization | 6.6 | 3.8 | ||||||||||||
Share-based compensation expense | 2.0 | 2.1 | ||||||||||||
Loss from equity method investments, net of dividends or distributions | 10.0 | 1.6 | ||||||||||||
Changes in: | ||||||||||||||
Insurance liabilities | 55.8 | 367.7 | ||||||||||||
Amounts due under reinsurance agreements | 0.3 | (333.0) | ||||||||||||
Income tax liabilities | (9.9) | 54.5 | ||||||||||||
Other operating assets and liabilities | 5.4 | (40.1) | ||||||||||||
Other, net | 5.7 | 3.3 | ||||||||||||
Net cash provided by operating activities | 86.4 | 95.7 | ||||||||||||
Cash flows - investing activities | ||||||||||||||
Fixed maturity securities | ||||||||||||||
Purchases | (185.5) | (397.4) | ||||||||||||
Sales | 62.7 | 168.3 | ||||||||||||
Maturities, paydowns, calls and redemptions | 73.7 | 234.4 | ||||||||||||
Equity securities | ||||||||||||||
Purchases | (1.1) | (1.1) | ||||||||||||
Sales and repayments | — | 6.8 | ||||||||||||
Limited partnership interests | ||||||||||||||
Purchases | (75.1) | (111.0) | ||||||||||||
Sales | 3.4 | 20.5 | ||||||||||||
Change in short-term and other investments, net | 26.6 | 26.2 | ||||||||||||
Acquisition of business, net of cash acquired | — | (164.4) | ||||||||||||
Net cash used in investing activities | (95.3) | (217.7) | ||||||||||||
Cash flows - financing activities | ||||||||||||||
Dividends paid to shareholders | (13.5) | (13.2) | ||||||||||||
Treasury stock acquired | (4.4) | (2.2) | ||||||||||||
Withholding tax payments on RSUs tendered | (1.7) | (0.9) | ||||||||||||
Annuity contracts: variable, fixed and FHLB funding agreements: | ||||||||||||||
Deposits including advances from FHLB funding agreements | 278.7 | 182.8 | ||||||||||||
Benefits, withdrawals and net transfers to Separate Account variable annuity assets | (152.2) | (117.9) | ||||||||||||
Repayment of FHLB funding agreements | (85.0) | — | ||||||||||||
Life policy accounts: | ||||||||||||||
Deposits | 3.4 | 2.2 | ||||||||||||
Withdrawals and surrenders | (1.1) | (0.8) | ||||||||||||
Change in deposit asset on reinsurance | (24.0) | (14.2) | ||||||||||||
Change in book overdrafts | (6.7) | 1.6 | ||||||||||||
Net cash provided by (used in) financing activities | (6.5) | 37.4 | ||||||||||||
Net decrease in cash | (15.4) | (84.6) | ||||||||||||
Cash at beginning of period | 42.8 | 133.7 | ||||||||||||
Cash at end of period | $ | 27.4 | $ | 49.1 |
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Cash flows - operating activities | ||||||||
Premiums collected | $ | 598,882 | $ | 557,816 | ||||
Policyholder benefits paid | (410,241 | ) | (422,184 | ) | ||||
Policy acquisition and other operating expenses paid | (208,248 | ) | (207,825 | ) | ||||
Federal income taxes paid | (10,061 | ) | (18,156 | ) | ||||
Investment income collected | 271,717 | 259,373 | ||||||
Interest expense paid | (5,821 | ) | (6,072 | ) | ||||
Other | 976 | 1,884 | ||||||
Net cash provided by operating activities | 237,204 | 164,836 | ||||||
Cash flows - investing activities | ||||||||
Fixed maturity securities | ||||||||
Purchases | (1,041,744 | ) | (1,097,880 | ) | ||||
Sales | 315,531 | 351,739 | ||||||
Maturities, paydowns, calls and redemptions | 691,169 | 634,686 | ||||||
Purchase of other invested assets | (98,109 | ) | (42,578 | ) | ||||
Net cash used in equity securities, short-term and other investments | (54,281 | ) | (75,665 | ) | ||||
Net cash used in investing activities | (187,434 | ) | (229,698 | ) | ||||
Cash flows - financing activities | ||||||||
Dividends paid to shareholders | (34,580 | ) | (33,241 | ) | ||||
Acquisition of treasury stock | (1,661 | ) | (21,513 | ) | ||||
Proceeds from exercise of stock options | 3,815 | 2,361 | ||||||
Withholding tax payments on RSUs tendered | (2,745 | ) | (3,321 | ) | ||||
Annuity contracts: variable, fixed and FHLB funding agreements | ||||||||
Deposits | 348,900 | 391,944 | ||||||
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets | (295,064 | ) | (240,489 | ) | ||||
Transfer of Company 401(k) assets to a third-party provider | (77,898 | ) | — | |||||
Life policy accounts | ||||||||
Deposits | 3,357 | 2,957 | ||||||
Withdrawals and surrenders | (3,340 | ) | (3,151 | ) | ||||
Change in bank overdrafts | (532 | ) | 7,422 | |||||
Net cash (used in) provided by financing activities | (59,748 | ) | 102,969 | |||||
Net (decrease) increase in cash | (9,978 | ) | 38,107 | |||||
Cash at beginning of period | 16,670 | 15,509 | ||||||
Cash at end of period | $ | 6,692 | $ | 53,616 |
Horace Mann Educators Corporation | 5 | First Quarter 2023 Form 10-Q |
($ in thousands) | September 30, 2017 | December 31, 2016 | ||||||
Investment contract reserves | $ | 4,428,989 | $ | 4,360,456 | ||||
Life policy reserves | 1,111,056 | 1,087,513 | ||||||
Total | $ | 5,540,045 | $ | 5,447,969 |
Horace Mann Educators Corporation | 6 | First Quarter 2023 Form 10-Q |
($ in millions) | ||||||||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life | Limited Pay Whole Life | Supplemental Health(1) | SPIA (life contingent) | |||||||||||||||||||||||||||||||||
Balance, end of year December 31, 2020 | $ | 218.7 | $ | 93.2 | $ | 758.3 | $ | 51.3 | $ | 392.5 | $ | 115.9 | ||||||||||||||||||||||||||
Change in discount rate assumptions | 111.5 | 27.3 | 433.0 | 18.2 | 23.0 | 20.6 | ||||||||||||||||||||||||||||||||
Change in cash flow assumptions, effect of net premiums exceeding gross premiums | 0.4 | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Adjusted balance, beginning of year January 1, 2021 | 330.6 | 120.5 | 1,191.3 | 69.5 | 415.5 | 136.5 | ||||||||||||||||||||||||||||||||
Less: Reinsurance recoverables, end of year December 31, 2020 | (0.1) | (5.4) | (1.3) | (0.1) | — | — | ||||||||||||||||||||||||||||||||
Less: Change in discount rate assumptions | (0.2) | (0.9) | (0.7) | (0.1) | — | — | ||||||||||||||||||||||||||||||||
Adjusted balance, beginning of year January 1, 2021, net of reinsurance | $ | 330.3 | $ | 114.2 | $ | 1,189.3 | $ | 69.3 | $ | 415.5 | $ | 136.5 |
Horace Mann Educators Corporation | 7 | First Quarter 2023 Form 10-Q |
($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life | Limited-Pay Whole Life | Indexed Universal Life | Supplemental Health | Total Annuities | ||||||||||||||||||||||||||||||||||||||
Balance, end of year December 31, 2020 | $ | 17.8 | $ | 25.6 | $ | 2.6 | $ | 4.4 | $ | 11.3 | $ | 4.3 | $ | 137.7 | ||||||||||||||||||||||||||||||
Adjustment for removal of related balances in AOCI | — | — | 3.6 | — | 1.6 | — | 85.4 | |||||||||||||||||||||||||||||||||||||
Adjusted balance, beginning of year January 1, 2021 | $ | 17.8 | $ | 25.6 | $ | 6.2 | $ | 4.4 | $ | 12.9 | $ | 4.3 | $ | 223.1 |
($ in millions) | ||||||||
Balance, end of year December 31, 2020 | $ | 0.1 | ||||||
Adjustment for the difference between carrying amount and fair value, except for the difference due to instrument-specific credit risk | 6.8 | |||||||
Adjustment for cumulative effect of changes in the instrument-specific credit risk at issuance | 1.7 | |||||||
Total adjustment for the difference between carrying amount and fair value | 8.5 | |||||||
Balance, beginning of year January 1, 2021 | 8.6 | |||||||
Less: Reinsurance recoverable | — | |||||||
Balance, beginning of year January 1, 2021, net of reinsurance | $ | 8.6 |
($ in millions) | January 1, 2021 | |||||||||||||
AOCI | Retained Earnings | |||||||||||||
Liability for future policy benefits | $ | (496.3) | $ | (0.2) | ||||||||||
Deferred policy acquisition costs | 71.1 | — | ||||||||||||
Deferred sales inducements | — | — | ||||||||||||
Market risk benefits | (1.3) | (5.4) | ||||||||||||
Total | $ | (426.5) | $ | (5.6) |
($ in thousands) | Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) | Benefit Plans (1) | Total (1) | |||||||||
Beginning balance, July 1, 2017 | $ | 243,510 | $ | (11,817 | ) | $ | 231,693 | |||||
Other comprehensive income (loss) before reclassifications | 9,786 | — | 9,786 | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 2,422 | — | 2,422 | |||||||||
Net current period other comprehensive income | 12,208 | — | 12,208 | |||||||||
Ending balance, September 30, 2017 | $ | 255,718 | $ | (11,817 | ) | $ | 243,901 | |||||
Beginning balance, January 1, 2017 | $ | 175,738 | $ | (11,817 | ) | $ | 163,921 | |||||
Other comprehensive income (loss) before reclassifications | 78,419 | — | 78,419 | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 1,561 | — | 1,561 | |||||||||
Net current period other comprehensive income | 79,980 | — | 79,980 | |||||||||
Ending balance, September 30, 2017 | $ | 255,718 | $ | (11,817 | ) | $ | 243,901 |
First Quarter 2023 Form 10-Q |
($ in thousands) | Net Unrealized Investment Gains and Losses on Fixed Maturity and Equity Securities (1)(2) | Benefit Plans (1) | Total (1) | |||||||||
Beginning balance, July 1, 2016 | $ | 329,653 | $ | (11,794 | ) | $ | 317,859 | |||||
Other comprehensive income (loss) before reclassifications | 9,912 | — | 9,912 | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (2,274 | ) | — | (2,274 | ) | |||||||
Net current period other comprehensive income | 7,638 | — | 7,638 | |||||||||
Ending balance, September 30, 2016 | $ | 337,291 | $ | (11,794 | ) | $ | 325,497 | |||||
Beginning balance, January 1, 2016 | $ | 175,167 | $ | (11,794 | ) | $ | 163,373 | |||||
Other comprehensive income (loss) before reclassifications | 167,692 | — | 167,692 | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (5,568 | ) | — | (5,568 | ) | |||||||
Net current period other comprehensive income | 162,124 | — | 162,124 | |||||||||
Ending balance, September 30, 2016 | $ | 337,291 | $ | (11,794 | ) | $ | 325,497 |
First Quarter 2023 Form 10-Q |
Horace Mann Educators Corporation | 10 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Fixed maturity securities | $ | 67.7 | $ | 58.6 | ||||||||||||||||||||||
Equity securities | 2.7 | 1.3 | ||||||||||||||||||||||||
Limited partnership interests | 4.4 | 13.0 | ||||||||||||||||||||||||
Short-term and other investments | 3.5 | 2.7 | ||||||||||||||||||||||||
Investment expenses | (3.6) | (2.6) | ||||||||||||||||||||||||
Net investment income - investment portfolio | 74.7 | 73.0 | ||||||||||||||||||||||||
Investment income - deposit asset on reinsurance | 25.7 | 24.9 | ||||||||||||||||||||||||
Total net investment income | $ | 100.4 | $ | 97.9 |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Fixed maturity securities | $ | (2.4) | $ | (2.3) | ||||||||||||||||||||||
Equity securities | (1.0) | (15.5) | ||||||||||||||||||||||||
Short-term investments and other | (0.5) | 2.3 | ||||||||||||||||||||||||
Net investment losses | $ | (3.9) | $ | (15.5) |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Credit loss impairments | $ | — | $ | (0.9) | ||||||||||||||||||||||
Intent-to-sell impairments | — | (0.9) | ||||||||||||||||||||||||
Total impairments | — | (1.8) | ||||||||||||||||||||||||
Sales and other, net | (2.4) | 1.1 | ||||||||||||||||||||||||
Change in fair value - equity securities | (1.0) | (17.1) | ||||||||||||||||||||||||
Change in fair value and gains (losses) realized on settlements - derivatives | (0.5) | 2.3 | ||||||||||||||||||||||||
Net investment losses | $ | (3.9) | $ | (15.5) |
Horace Mann Educators Corporation | 11 | Quarterly Report on Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Beginning balance | $ | 1.2 | $ | 7.7 | ||||||||||||||||||||||
Credit losses on fixed maturity securities for which credit losses were not previously reported | — | — | ||||||||||||||||||||||||
Net increase related to credit losses previously reported | — | 0.9 | ||||||||||||||||||||||||
Reduction of credit allowances related to sales | — | — | ||||||||||||||||||||||||
Write-offs | — | (0.3) | ||||||||||||||||||||||||
Ending balance | $ | 1.2 | $ | 8.3 |
($ in millions) | Amortized Cost, net | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations:(1) | ||||||||||||||||||||||||||
Mortgage-backed securities | $ | 637.6 | $ | 2.0 | $ | 55.6 | $ | 584.0 | ||||||||||||||||||
Other, including U.S. Treasury securities | 424.4 | 1.2 | 60.6 | 365.0 | ||||||||||||||||||||||
Municipal bonds | 1,363.0 | 26.3 | 98.5 | 1,290.8 | ||||||||||||||||||||||
Foreign government bonds | 34.1 | — | 1.5 | 32.6 | ||||||||||||||||||||||
Corporate bonds | 2,155.4 | 17.2 | 229.1 | 1,943.5 | ||||||||||||||||||||||
Other asset-backed securities | 1,188.8 | 2.9 | 57.6 | 1,134.1 | ||||||||||||||||||||||
Totals | $ | 5,803.3 | $ | 49.6 | $ | 502.9 | $ | 5,350.0 | ||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations:(1) | ||||||||||||||||||||||||||
Mortgage-backed securities | $ | 638.2 | $ | 1.3 | $ | 69.1 | $ | 570.4 | ||||||||||||||||||
Other, including U.S. Treasury securities | 410.0 | 0.5 | 67.8 | 342.7 | ||||||||||||||||||||||
Municipal bonds | 1,380.9 | 16.9 | 128.1 | 1,269.7 | ||||||||||||||||||||||
Foreign government bonds | 35.1 | — | 1.6 | 33.5 | ||||||||||||||||||||||
Corporate bonds | 2,161.2 | 12.7 | 272.2 | 1,901.7 | ||||||||||||||||||||||
Other asset-backed securities | 1,131.5 | 3.6 | 68.1 | 1,067.0 | ||||||||||||||||||||||
Totals | $ | 5,756.9 | $ | 35.0 | $ | 606.9 | $ | 5,185.0 |
($ in thousands) | Amortized Cost or Cost | Unrealized Investment Gains | Unrealized Investment Losses | Fair Value | OTTI in AOCI (1) | |||||||||||||||
September 30, 2017 | ||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||
U.S. Government and federally sponsored agency obligations (2): | ||||||||||||||||||||
Mortgage-backed securities | $ | 613,761 | $ | 34,712 | $ | 3,071 | $ | 645,402 | $ | — | ||||||||||
Other, including U.S. Treasury securities | 653,237 | 24,705 | 6,922 | 671,020 | — | |||||||||||||||
Municipal bonds | 1,669,273 | 177,359 | 4,428 | 1,842,204 | — | |||||||||||||||
Foreign government bonds | 93,761 | 6,416 | — | 100,177 | — | |||||||||||||||
Corporate bonds | 2,635,313 | 190,548 | 4,158 | 2,821,703 | — | |||||||||||||||
Other mortgage-backed securities | 1,529,052 | 26,879 | 5,803 | 1,550,128 | 1,335 | |||||||||||||||
Totals | $ | 7,194,397 | $ | 460,619 | $ | 24,382 | $ | 7,630,634 | $ | 1,335 | ||||||||||
Equity securities (3) | $ | 140,200 | $ | 20,483 | $ | 1,408 | $ | 159,275 | $ | — | ||||||||||
December 31, 2016 | ||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||
U.S. Government and federally sponsored agency obligations (2): | ||||||||||||||||||||
Mortgage-backed securities | $ | 587,355 | $ | 34,256 | $ | 6,720 | $ | 614,891 | $ | — | ||||||||||
Other, including U.S. Treasury securities | 458,745 | 18,518 | 10,120 | 467,143 | — | |||||||||||||||
Municipal bonds | 1,648,252 | 143,733 | 22,588 | 1,769,397 | — | |||||||||||||||
Foreign government bonds | 93,864 | 5,102 | 297 | 98,669 | — | |||||||||||||||
Corporate bonds | 2,672,818 | 152,229 | 14,826 | 2,810,221 | — | |||||||||||||||
Other mortgage-backed securities | 1,691,093 | 21,153 | 15,859 | 1,696,387 | 1,618 | |||||||||||||||
Totals | $ | 7,152,127 | $ | 374,991 | $ | 70,410 | $ | 7,456,708 | $ | 1,618 | ||||||||||
Equity securities (3) | $ | 134,013 | $ | 13,210 | $ | 5,574 | $ | 141,649 | $ | — |
First Quarter 2023 Form 10-Q |
($ in millions) | 12 Months or Less | More than 12 Months | Total | |||||||||||||||||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 305.4 | $ | 22.1 | $ | 202.0 | $ | 33.5 | $ | 507.4 | $ | 55.6 | ||||||||||||||||||||||||||
Other | 167.9 | 12.2 | 137.3 | 48.4 | 305.2 | 60.6 | ||||||||||||||||||||||||||||||||
Municipal bonds | 509.6 | 28.9 | 363.3 | 69.6 | 872.9 | 98.5 | ||||||||||||||||||||||||||||||||
Foreign government bonds | 31.2 | 1.4 | 0.4 | 0.1 | 31.6 | 1.5 | ||||||||||||||||||||||||||||||||
Corporate bonds | 684.9 | 51.4 | 781.6 | 177.7 | 1,466.5 | 229.1 | ||||||||||||||||||||||||||||||||
Other asset-backed securities | 339.3 | 14.1 | 663.0 | 43.5 | 1,002.3 | 57.6 | ||||||||||||||||||||||||||||||||
Total | $ | 2,038.3 | $ | 130.1 | $ | 2,147.6 | $ | 372.8 | $ | 4,185.9 | $ | 502.9 | ||||||||||||||||||||||||||
Number of positions with a gross unrealized loss | 1,295 | 1,626 | 2,921 | |||||||||||||||||||||||||||||||||||
Fair value as a percentage of total fixed maturity securities at fair value | 38.1 | % | 40.1 | % | 78.2 | % | ||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 458.3 | $ | 54.4 | $ | 52.6 | $ | 14.7 | $ | 510.9 | $ | 69.1 | ||||||||||||||||||||||||||
Other | 242.7 | 34.1 | 65.8 | 33.7 | 308.5 | 67.8 | ||||||||||||||||||||||||||||||||
Municipal bonds | 911.6 | 113.7 | 42.2 | 14.4 | 953.8 | 128.1 | ||||||||||||||||||||||||||||||||
Foreign government bonds | 32.7 | 1.4 | 0.4 | 0.2 | 33.1 | 1.6 | ||||||||||||||||||||||||||||||||
Corporate bonds | 1,345.0 | 221.1 | 148.9 | 51.1 | 1,493.9 | 272.2 | ||||||||||||||||||||||||||||||||
Other asset-backed securities | 543.4 | 37.1 | 424.3 | 31.0 | 967.7 | 68.1 | ||||||||||||||||||||||||||||||||
Total | $ | 3,533.7 | $ | 461.8 | $ | 734.2 | $ | 145.1 | $ | 4,267.9 | $ | 606.9 | ||||||||||||||||||||||||||
Number of positions with a gross unrealized loss | 2,515 | 587 | 3,102 | |||||||||||||||||||||||||||||||||||
Fair value as a percentage of total fixed maturity securities at fair value | 68.2 | % | 14.2 | % | 82.4 | % |
($ in thousands) | 12 Months or Less | More than 12 Months | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||
September 30, 2017 | ||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||
Mortgage-backed securities | $ | 111,456 | $ | 2,213 | $ | 12,879 | $ | 858 | $ | 124,335 | $ | 3,071 | ||||||||||||
Other | 275,332 | 5,901 | 16,979 | 1,021 | 292,311 | 6,922 | ||||||||||||||||||
Municipal bonds | 118,881 | 2,731 | 32,710 | 1,697 | 151,591 | 4,428 | ||||||||||||||||||
Foreign government bonds | — | — | — | — | — | — | ||||||||||||||||||
Corporate bonds | 138,207 | 2,287 | 49,931 | 1,871 | 188,138 | 4,158 | ||||||||||||||||||
Other mortgage-backed securities | 349,600 | 3,985 | 126,297 | 1,818 | 475,897 | 5,803 | ||||||||||||||||||
Total fixed maturity securities | 993,476 | 17,117 | 238,796 | 7,265 | 1,232,272 | 24,382 | ||||||||||||||||||
Equity securities (1) | 10,547 | 692 | 2,192 | 716 | 12,739 | 1,408 | ||||||||||||||||||
Combined totals | $ | 1,004,023 | $ | 17,809 | $ | 240,988 | $ | 7,981 | $ | 1,245,011 | $ | 25,790 | ||||||||||||
Number of positions with a gross unrealized loss | 393 | 77 | 470 | |||||||||||||||||||||
Fair value as a percentage of total fixed maturity and equity securities fair value | 12.9 | % | 3.1 | % | 16.0 | % | ||||||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||
Mortgage-backed securities | $ | 186,439 | $ | 6,176 | $ | 3,235 | $ | 544 | $ | 189,674 | $ | 6,720 | ||||||||||||
Other | 219,372 | 10,120 | — | — | 219,372 | 10,120 | ||||||||||||||||||
Municipal bonds | 408,163 | 19,006 | 9,928 | 3,582 | 418,091 | 22,588 | ||||||||||||||||||
Foreign government bonds | 24,182 | 297 | — | — | 24,182 | 297 | ||||||||||||||||||
Corporate bonds | 459,402 | 11,056 | 57,261 | 3,770 | 516,663 | 14,826 | ||||||||||||||||||
Other mortgage-backed securities | 640,691 | 10,470 | 229,106 | 5,389 | 869,797 | 15,859 | ||||||||||||||||||
Total fixed maturity securities | 1,938,249 | 57,125 | 299,530 | 13,285 | 2,237,779 | 70,410 | ||||||||||||||||||
Equity securities (1) | 56,676 | 4,567 | 7,956 | 1,007 | 64,632 | 5,574 | ||||||||||||||||||
Combined totals | $ | 1,994,925 | $ | 61,692 | $ | 307,486 | $ | 14,292 | $ | 2,302,411 | $ | 75,984 | ||||||||||||
Number of positions with a gross unrealized loss | 629 | 102 | 731 | |||||||||||||||||||||
Fair value as a percentage of total fixed maturity and equity securities fair value | 26.3 | % | 4.0 | % | 30.3 | % |
First Quarter 2023 Form 10-Q |
Number of Positions | ||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||
Credit Rating | ||||||||||||||
AAA | 173 | 67 | ||||||||||||
AA | 591 | 217 | ||||||||||||
A | 283 | 94 | ||||||||||||
BBB | 327 | 93 | ||||||||||||
BB | 145 | 68 | ||||||||||||
B | 62 | 31 | ||||||||||||
CCC or lower | 4 | 2 | ||||||||||||
Not rated | 41 | 15 | ||||||||||||
Totals: | 1,626 | 587 |
($ in thousands) | Nine Months Ended September 30, | |||||||
2017 | 2016 | |||||||
Cumulative credit loss (1) | ||||||||
Beginning of period | $ | 13,703 | $ | 7,844 | ||||
New credit losses | — | 300 | ||||||
Increases to previously recognized credit losses | 1,994 | 2,480 | ||||||
Gains related to securities sold or paid down during the period | (2 | ) | — | |||||
End of period | $ | 15,695 | $ | 10,624 |
($ in millions) | Percent of Total Fair Value | March 31, 2023 | ||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | Fair Value | Amortized Cost, net | |||||||||||||||||||||||
Estimated expected maturity: | ||||||||||||||||||||||||||
Due in 1 year or less | 4.7 | % | 4.4 | % | $ | 249.5 | $ | 256.3 | ||||||||||||||||||
Due after 1 year through 5 years | 26.0 | 26.3 | 1,392.5 | 1,441.9 | ||||||||||||||||||||||
Due after 5 years through 10 years | 28.1 | 27.9 | 1,501.0 | 1,581.4 | ||||||||||||||||||||||
Due after 10 years through 20 years | 25.0 | 25.0 | 1,342.2 | 1,482.3 | ||||||||||||||||||||||
Due after 20 years | 16.2 | 16.4 | 864.8 | 1,041.4 | ||||||||||||||||||||||
Total | 100.0 | % | 100.0 | % | $ | 5,350.0 | $ | 5,803.3 | ||||||||||||||||||
Average option-adjusted duration, in years | 6.3 | 6.4 |
($ in thousands) | Percent of Total Fair Value | September 30, 2017 | ||||||||||||
September 30, 2017 | December 31, 2016 | Fair Value | Amortized Cost | |||||||||||
Estimated expected maturity: | ||||||||||||||
Due in 1 year or less | 3.4 | % | 3.9 | % | $ | 256,527 | $ | 250,803 | ||||||
Due after 1 year through 5 years | 27.5 | 28.7 | 2,097,243 | 1,998,498 | ||||||||||
Due after 5 years through 10 years | 33.3 | 35.2 | 2,540,303 | 2,431,895 | ||||||||||
Due after 10 years through 20 years | 23.3 | 19.5 | 1,780,760 | 1,654,259 | ||||||||||
Due after 20 years | 12.5 | 12.7 | 955,801 | 858,942 | ||||||||||
Total | 100.0 | % | 100.0 | % | $ | 7,630,634 | $ | 7,194,397 | ||||||
Average option-adjusted duration, in years | 6.0 | 5.9 |
Horace Mann Educators Corporation | 14 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||
Proceeds received | $ | 62.7 | $ | 168.3 | ||||||||||||||||||||||
Gross gains realized | 0.3 | 2.4 | ||||||||||||||||||||||||
Gross losses realized | (2.7) | (2.9) | ||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Proceeds received | $ | — | $ | 5.8 | ||||||||||||||||||||||
Gross gains realized | — | 1.7 | ||||||||||||||||||||||||
Gross losses realized | — | (0.1) |
($ in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Fixed maturity securities | ||||||||||||||||
Proceeds received | $ | 85,841 | $ | 94,706 | $ | 315,531 | $ | 351,739 | ||||||||
Gross gains realized | 2,293 | 2,966 | 8,862 | 13,824 | ||||||||||||
Gross losses realized | (181 | ) | (102 | ) | (1,558 | ) | (1,542 | ) | ||||||||
Equity securities | ||||||||||||||||
Proceeds received | $ | 3,514 | $ | 4,479 | $ | 20,510 | $ | 17,101 | ||||||||
Gross gains realized | 477 | 790 | 3,227 | 1,960 | ||||||||||||
Gross losses realized | (293 | ) | (21 | ) | (721 | ) | (862 | ) |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Net unrealized investment gains (losses) on fixed maturity securities, net of tax | ||||||||||||||||||||||||||
Beginning of period | $ | (449.6) | $ | 347.1 | ||||||||||||||||||||||
Change in net unrealized investment gains (losses) on fixed maturity securities | 91.3 | (335.9) | ||||||||||||||||||||||||
Reclassification of net investment losses on fixed maturity securities to net income | 1.9 | 1.8 | ||||||||||||||||||||||||
End of period | $ | (356.4) | $ | 13.0 |
($ in millions) | ||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||
Commercial mortgage loan funds | $ | 623.7 | $ | 593.6 | ||||||||||
Private equity funds | 77.7 | 76.3 | ||||||||||||
Infrastructure equity funds | 73.2 | 72.0 | ||||||||||||
Real estate equity funds | 87.7 | 71.3 | ||||||||||||
Infrastructure debt funds | 62.6 | 60.0 | ||||||||||||
Other funds(1) | 120.5 | 110.5 | ||||||||||||
Total | $ | 1,045.4 | $ | 983.7 |
($ in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net unrealized investment gains and losses on fixed maturity securities, net of tax | ||||||||||||||||
Beginning of period | $ | 270,834 | $ | 371,456 | $ | 197,978 | $ | 198,714 | ||||||||
Change in net unrealized investment gains and losses | 10,133 | 20,827 | 83,547 | 188,912 | ||||||||||||
Reclassification of net realized investment (gains) losses to net income | 2,587 | (11,072 | ) | 2,029 | (6,415 | ) | ||||||||||
End of period | $ | 283,554 | $ | 381,211 | $ | 283,554 | $ | 381,211 | ||||||||
Net unrealized investment gains and losses on equity securities, net of tax | ||||||||||||||||
Beginning of period | $ | 10,631 | $ | 8,183 | $ | 4,963 | $ | 2,649 | ||||||||
Change in net unrealized investment gains and losses | 1,933 | (2,052 | ) | 7,905 | 4,846 | |||||||||||
Reclassification of net realized investment (gains) losses to net income | (165 | ) | 2,211 | (469 | ) | 847 | ||||||||||
End of period | $ | 12,399 | $ | 8,342 | $ | 12,399 | $ | 8,342 |
Horace Mann Educators Corporation | 15 | First Quarter 2023 Form 10-Q |
($ in millions) | Gross Amounts Offset in the Consolidated Balance Sheets | Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets | Gross Amounts Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
Gross Amounts | Financial Instruments | Cash Collateral Received | Net Amount | |||||||||||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||||||||||||||||
Free-standing derivatives | $ | 9.2 | $ | — | $ | 9.2 | $ | — | $ | 8.3 | $ | 0.9 | ||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||||||||||||||||
Free-standing derivatives | $ | 6.8 | $ | — | $ | 6.8 | $ | — | $ | 5.9 | $ | 0.9 |
($ in thousands) | Gross Amounts Offset in the | Net Amounts of Assets/ Liabilities Presented in the | Gross Amounts Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||
Gross Amounts | Consolidated Balance Sheets | Consolidated Balance Sheets | Financial Instruments | Cash Collateral Received | Net Amount | |||||||||||||||||||
September 30, 2017 | ||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||
Free-standing derivatives | $ | 10,431 | $ | — | $ | 10,431 | $ | — | $ | 10,954 | $ | (523 | ) | |||||||||||
December 31, 2016 | ||||||||||||||||||||||||
Asset derivatives: | ||||||||||||||||||||||||
Free-standing derivatives | $ | 8,694 | $ | — | $ | 8,694 | $ | — | $ | 8,824 | $ | (130 | ) |
Horace Mann Educators Corporation | 16 | First Quarter 2023 Form 10-Q |
($ in millions) | Carrying Amount | Fair Value | Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 584.0 | $ | 584.0 | $ | — | $ | 581.4 | $ | 2.6 | ||||||||||||||||||||||
Other, including U.S. Treasury securities | 364.8 | 364.8 | 38.5 | 326.3 | — | |||||||||||||||||||||||||||
Municipal bonds | 1,290.9 | 1,290.9 | — | 1,235.5 | 55.4 | |||||||||||||||||||||||||||
Foreign government bonds | 32.6 | 32.6 | — | 32.6 | — | |||||||||||||||||||||||||||
Corporate bonds | 1,943.5 | 1,943.5 | 13.2 | 1,646.3 | 284.0 | |||||||||||||||||||||||||||
Other asset-backed securities | 1,134.2 | 1,134.2 | — | 1,032.2 | 102.0 | |||||||||||||||||||||||||||
Total fixed maturity securities | 5,350.0 | 5,350.0 | 51.7 | 4,854.3 | 444.0 | |||||||||||||||||||||||||||
Equity securities | 98.8 | 98.8 | 24.3 | 72.5 | 2.0 | |||||||||||||||||||||||||||
Short-term investments | 75.0 | 75.0 | 75.0 | — | — | |||||||||||||||||||||||||||
Other investments | 41.8 | 41.8 | — | 41.8 | — | |||||||||||||||||||||||||||
Totals | $ | 5,565.6 | $ | 5,565.6 | $ | 151.0 | $ | 4,968.6 | $ | 446.0 | ||||||||||||||||||||||
Separate Account variable annuity assets(1) | $ | 2,954.7 | $ | 2,954.7 | $ | 2,954.7 | $ | — | $ | — | ||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Investment contract and future policy benefit reserves, embedded derivatives | $ | 1.7 | $ | 1.7 | $ | — | $ | 1.7 | $ | — | ||||||||||||||||||||||
Other policyholder funds, embedded derivatives | $ | 89.9 | $ | 89.9 | $ | — | $ | — | $ | 89.9 | ||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 570.4 | $ | 570.4 | $ | — | $ | 567.8 | $ | 2.6 | ||||||||||||||||||||||
Other, including U.S. Treasury securities | 342.6 | 342.6 | 24.6 | 318.0 | — | |||||||||||||||||||||||||||
Municipal bonds | 1,269.7 | 1,269.7 | — | 1,215.3 | 54.4 | |||||||||||||||||||||||||||
Foreign government bonds | 33.6 | 33.6 | — | 33.6 | — | |||||||||||||||||||||||||||
Corporate bonds | 1,901.7 | 1,901.7 | 12.2 | 1,628.2 | 261.3 | |||||||||||||||||||||||||||
Other asset-backed securities | 1,067.0 | 1,067.0 | — | 962.0 | 105.0 | |||||||||||||||||||||||||||
Total fixed maturity securities | 5,185.0 | 5,185.0 | 36.8 | 4,724.9 | 423.3 | |||||||||||||||||||||||||||
Equity securities | 99.6 | 99.6 | 23.3 | 74.3 | 2.0 | |||||||||||||||||||||||||||
Short-term investments | 109.4 | 109.4 | 109.4 | — | — | |||||||||||||||||||||||||||
Other investments | 38.6 | 38.6 | — | 38.6 | — | |||||||||||||||||||||||||||
Totals | $ | 5,432.6 | $ | 5,432.6 | $ | 169.5 | $ | 4,837.8 | $ | 425.3 | ||||||||||||||||||||||
Separate Account (variable annuity) assets(1) | $ | 2,792.3 | $ | 2,792.3 | $ | 2,792.3 | $ | — | $ | — | ||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Investment contract and future policy benefit reserves, embedded derivatives | $ | 1.2 | $ | 1.2 | $ | — | $ | 1.2 | $ | — | ||||||||||||||||||||||
Other policyholder funds, embedded derivatives | $ | 91.0 | $ | 91.0 | $ | — | $ | — | $ | 91.0 |
($ in thousands) | Fair Value Measurements at | |||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
September 30, 2017 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||
Mortgage-backed securities | $ | 645,402 | $ | 645,402 | $ | — | $ | 642,110 | $ | 3,292 | ||||||||||
Other, including U.S. Treasury securities | 671,020 | 671,020 | 13,484 | 657,536 | — | |||||||||||||||
Municipal bonds | 1,842,204 | 1,842,204 | — | 1,792,992 | 49,212 | |||||||||||||||
Foreign government bonds | 100,177 | 100,177 | — | 100,177 | — | |||||||||||||||
Corporate bonds | 2,821,703 | 2,821,703 | 14,798 | 2,712,660 | 94,245 | |||||||||||||||
Other mortgage-backed securities | 1,550,128 | 1,550,128 | — | 1,431,802 | 118,326 | |||||||||||||||
Total fixed maturity securities | 7,630,634 | 7,630,634 | 28,282 | 7,337,277 | 265,075 | |||||||||||||||
Equity securities | 159,275 | 159,275 | 103,552 | 55,717 | 6 | |||||||||||||||
Short-term investments | 111,488 | 111,488 | 111,488 | — | — | |||||||||||||||
Other investments | 21,944 | 21,944 | — | 21,944 | — | |||||||||||||||
Totals | $ | 7,923,341 | $ | 7,923,341 | $ | 243,322 | $ | 7,414,938 | $ | 265,081 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Investment contract and life policy reserves, embedded derivatives | $ | 390 | $ | 390 | $ | — | $ | 390 | $ | — | ||||||||||
Other policyholder funds, embedded derivatives | 72,986 | 72,986 | — | — | 72,986 | |||||||||||||||
December 31, 2016 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||
U.S. Government and federally sponsored agency obligations: | ||||||||||||||||||||
Mortgage-backed securities | $ | 614,891 | $ | 614,891 | $ | — | $ | 611,476 | $ | 3,415 | ||||||||||
Other, including U.S. Treasury securities | 467,143 | 467,143 | 13,631 | 453,512 | — | |||||||||||||||
Municipal bonds | 1,769,397 | 1,769,397 | — | 1,722,900 | 46,497 | |||||||||||||||
Foreign government bonds | 98,669 | 98,669 | — | 98,669 | — | |||||||||||||||
Corporate bonds | 2,810,221 | 2,810,221 | 13,532 | 2,736,498 | 60,191 | |||||||||||||||
Other mortgage-backed securities | 1,696,387 | 1,696,387 | — | 1,595,143 | 101,244 | |||||||||||||||
Total fixed maturity securities | 7,456,708 | 7,456,708 | 27,163 | 7,218,198 | 211,347 | |||||||||||||||
Equity securities | 141,649 | 141,649 | 98,632 | 43,011 | 6 | |||||||||||||||
Short-term investments | 44,918 | 44,918 | 44,167 | — | 751 | |||||||||||||||
Other investments | 20,194 | 20,194 | — | 20,194 | — | |||||||||||||||
Totals | $ | 7,663,469 | $ | 7,663,469 | $ | 169,962 | $ | 7,281,403 | $ | 212,104 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Investment contract and life policy reserves, embedded derivatives | $ | 158 | $ | 158 | $ | — | $ | 158 | $ | — | ||||||||||
Other policyholder funds, embedded derivatives | 59,393 | 59,393 | — | — | 59,393 |
Horace Mann Educators Corporation | 17 | First Quarter 2023 Form 10-Q |
($ in millions) | Financial Assets | Financial Liabilities(1) | ||||||||||||||||||||||||||||||||||||||||||
Municipal Bonds | Corporate Bonds | Mortgage-Backed and Other Asset- Backed Securities(2) | Total Fixed Maturity Securities | Equity Securities | Total | |||||||||||||||||||||||||||||||||||||||
Beginning balance, January 1, 2023 | $ | 54.4 | $ | 261.3 | $ | 107.6 | $ | 423.3 | $ | 2.0 | $ | 425.3 | $ | 91.0 | ||||||||||||||||||||||||||||||
Transfers into Level 3(3) | — | 5.9 | 0.4 | 6.3 | — | 6.3 | — | |||||||||||||||||||||||||||||||||||||
Transfers out of Level 3(3) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) included in net income related to financial assets | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net investment (gains) losses included in net income related to financial liabilities | — | — | — | — | — | — | 0.2 | |||||||||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) included in OCI | 1.2 | 0.9 | (0.4) | 1.7 | — | 1.7 | — | |||||||||||||||||||||||||||||||||||||
Purchases | — | 19.0 | 0.2 | 19.2 | — | 19.2 | — | |||||||||||||||||||||||||||||||||||||
Issuances | — | — | — | — | — | — | 2.1 | |||||||||||||||||||||||||||||||||||||
Sales | — | (2.6) | — | (2.6) | — | (2.6) | — | |||||||||||||||||||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Paydowns, maturities and distributions | (0.2) | (0.5) | (3.2) | (3.9) | — | (3.9) | (3.4) | |||||||||||||||||||||||||||||||||||||
Ending balance, March 31, 2023 | $ | 55.4 | $ | 284.0 | $ | 104.6 | $ | 444.0 | $ | 2.0 | $ | 446.0 | $ | 89.9 | ||||||||||||||||||||||||||||||
Beginning balance, January 1, 2022 | $ | 60.8 | $ | 210.3 | $ | 98.9 | $ | 370.0 | $ | 1.4 | $ | 371.4 | $ | 106.6 | ||||||||||||||||||||||||||||||
Transfers into Level 3(3) | — | 67.5 | 4.7 | 72.2 | — | 72.2 | — | |||||||||||||||||||||||||||||||||||||
Transfers out of Level 3(3) | (3.2) | — | (4.8) | (8.0) | — | (8.0) | — | |||||||||||||||||||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) included in net income related to financial assets | — | — | (0.9) | (0.9) | (0.1) | (1.0) | — | |||||||||||||||||||||||||||||||||||||
Net investment (gains) losses included in net income related to financial liabilities | — | — | — | — | — | — | (5.2) | |||||||||||||||||||||||||||||||||||||
Net unrealized investment gains (losses) included in OCI | (3.4) | (6.4) | (4.1) | (13.9) | — | (13.9) | — | |||||||||||||||||||||||||||||||||||||
Purchases | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuances | — | — | — | — | — | — | 0.9 | |||||||||||||||||||||||||||||||||||||
Sales | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Paydowns, maturities and distributions | (0.1) | (45.4) | (4.0) | (49.5) | — | (49.5) | (3.2) | |||||||||||||||||||||||||||||||||||||
Ending balance, March 31, 2022 | $ | 54.1 | $ | 226.0 | $ | 89.8 | $ | 369.9 | $ | 1.3 | $ | 371.2 | $ | 99.1 |
($ in thousands) | Financial Assets | Financial Liabilities(1) | ||||||||||||||||||||||||||||||
Municipal Bonds | Corporate Bonds | Mortgage- Backed Securities (2) | Total Fixed Maturity Securities | Equity Securities | Short-term Investments | Total | ||||||||||||||||||||||||||
Beginning balance, July 1, 2017 | $ | 49,123 | $ | 77,052 | $ | 120,324 | $ | 246,499 | $ | 6 | $ | — | $ | 246,505 | $ | 67,995 | ||||||||||||||||
Transfers into Level 3 (3) | — | 23,501 | 11,961 | 35,462 | — | — | 35,462 | — | ||||||||||||||||||||||||
Transfers out of Level 3 (3) | — | 1 | (881 | ) | (880 | ) | — | — | (880 | ) | — | |||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||
Net realized investment gains (losses) included in net income related to financial assets | — | (1 | ) | (160 | ) | (161 | ) | — | — | (161 | ) | — | ||||||||||||||||||||
Net realized (gains) losses included in net income related to financial liabilities | — | — | — | — | — | — | — | 2,587 | ||||||||||||||||||||||||
Net unrealized investment gains (losses) included in other comprehensive income | 382 | (192 | ) | (377 | ) | (187 | ) | — | — | (187 | ) | — | ||||||||||||||||||||
Purchases | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuances | — | — | — | — | — | — | — | 3,752 | ||||||||||||||||||||||||
Sales | — | (1,999 | ) | — | (1,999 | ) | — | — | (1,999 | ) | — | |||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Paydowns, maturities and distributions | (293 | ) | (4,117 | ) | (9,249 | ) | (13,659 | ) | — | — | (13,659 | ) | (1,348 | ) | ||||||||||||||||||
Ending balance, September 30, 2017 | $ | 49,212 | $ | 94,245 | $ | 121,618 | $ | 265,075 | $ | 6 | $ | — | $ | 265,081 | $ | 72,986 | ||||||||||||||||
Beginning balance, January 1, 2017 | $ | 46,497 | $ | 60,191 | $ | 104,659 | $ | 211,347 | $ | 6 | $ | 751 | $ | 212,104 | $ | 59,393 | ||||||||||||||||
Transfers into Level 3 (3) | 5,214 | 55,420 | 36,482 | 97,116 | — | — | 97,116 | — | ||||||||||||||||||||||||
Transfers out of Level 3 (3) | (5,557 | ) | (11,962 | ) | (881 | ) | (18,400 | ) | — | (751 | ) | (19,151 | ) | — | ||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||
Net realized investment gains (losses) included in net income related to financial assets | — | (1 | ) | (1,874 | ) | (1,875 | ) | — | — | (1,875 | ) | — | ||||||||||||||||||||
Net realized (gains) losses included in net income related to financial liabilities | — | — | — | — | — | — | — | 6,133 | ||||||||||||||||||||||||
Net unrealized investment gains (losses) included in other comprehensive income | 3,540 | 263 | 1,945 | 5,748 | — | — | 5,748 | — | ||||||||||||||||||||||||
Purchases | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuances | — | — | — | — | — | — | — | 10,538 | ||||||||||||||||||||||||
Sales | — | (1,999 | ) | — | (1,999 | ) | — | — | (1,999 | ) | — | |||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Paydowns, maturities and distributions | (482 | ) | (7,667 | ) | (18,713 | ) | (26,862 | ) | — | — | (26,862 | ) | (3,078 | ) | ||||||||||||||||||
Ending balance, September 30, 2017 | $ | 49,212 | $ | 94,245 | $ | 121,618 | $ | 265,075 | $ | 6 | $ | — | $ | 265,081 | $ | 72,986 |
(3)Transfers into and out of Level |
($ in thousands) | Financial Assets | Financial Liabilities(1) | ||||||||||||||||||||||||||||||
Municipal Bonds | Corporate Bonds | Mortgage- Backed Securities (2) | Total Fixed Maturity Securities | Equity Securities | Short-term Investments | Total | ||||||||||||||||||||||||||
Beginning balance, July 1, 2016 | $ | 47,647 | $ | 73,408 | $ | 96,581 | $ | 217,636 | $ | 6 | $ | — | $ | 217,642 | $ | 47,706 | ||||||||||||||||
Transfers into Level 3 (3) | — | 10,375 | 7,655 | 18,030 | — | — | 18,030 | — | ||||||||||||||||||||||||
Transfers out of Level 3 (3) | — | (5,967 | ) | (788 | ) | (6,755 | ) | — | — | (6,755 | ) | — | ||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||
Net realized investment gains (losses) included in net income related to financial assets | — | 1 | (56 | ) | (55 | ) | — | — | (55 | ) | — | |||||||||||||||||||||
Net realized (gains) losses included in net income related to financial liabilities | — | — | — | — | — | — | — | 68 | ||||||||||||||||||||||||
Net unrealized investment gains (losses) included in other comprehensive income | (2,361 | ) | 1,292 | 3,951 | 2,882 | — | — | 2,882 | — | |||||||||||||||||||||||
Purchases | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuances | — | — | — | — | — | — | — | 6,710 | ||||||||||||||||||||||||
Sales | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Paydowns, maturities and distributions | (120 | ) | (1,488 | ) | (5,194 | ) | (6,802 | ) | — | — | (6,802 | ) | 695 | |||||||||||||||||||
Ending balance, September 30, 2016 | $ | 45,166 | $ | 77,621 | $ | 102,149 | $ | 224,936 | $ | 6 | $ | — | $ | 224,942 | $ | 55,179 | ||||||||||||||||
Beginning balance, January 1, 2016 | $ | 30,379 | $ | 67,575 | $ | 75,466 | $ | 173,420 | $ | 6 | $ | — | $ | 173,426 | $ | 39,021 | ||||||||||||||||
Transfers into Level 3 (3) | 14,751 | 21,451 | 32,281 | 68,483 | — | — | 68,483 | — | ||||||||||||||||||||||||
Transfers out of Level 3 (3) | — | (5,967 | ) | (788 | ) | (6,755 | ) | — | — | (6,755 | ) | — | ||||||||||||||||||||
Total gains or losses | ||||||||||||||||||||||||||||||||
Net realized investment gains (losses) included in net income related to financial assets | — | (656 | ) | (56 | ) | (712 | ) | — | — | (712 | ) | — | ||||||||||||||||||||
Net realized (gains) losses included in net income related to financial liabilities | — | — | — | — | — | — | — | 2,066 | ||||||||||||||||||||||||
Net unrealized investment gains (losses) included in other comprehensive income | 420 | 3,073 | 4,173 | 7,666 | — | — | 7,666 | — | ||||||||||||||||||||||||
Purchases | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuances | — | — | — | — | — | — | — | 15,194 | ||||||||||||||||||||||||
Sales | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Paydowns, maturities and distributions | (384 | ) | (7,855 | ) | (8,927 | ) | (17,166 | ) | — | — | (17,166 | ) | (1,102 | ) | ||||||||||||||||||
Ending balance, September 30, 2016 | $ | 45,166 | $ | 77,621 | $ | 102,149 | $ | 224,936 | $ | 6 | $ | — | $ | 224,942 | $ | 55,179 |
Horace Mann Educators Corporation | 18 | First Quarter 2023 Form 10-Q |
($ in millions) | ||||||||||||||||||||||||||
Financial Assets | Fair Value as of March 31, 2023 | Valuation Technique(s) | Unobservable Inputs | Range (Weighted Average) and Single Point Best Estimate(1) | ||||||||||||||||||||||
Municipal bonds | $ | 55.4 | discounted cash flow | option adjusted spread | 308 bps | |||||||||||||||||||||
Corporate bonds | 284.0 | discounted cash flow | yield | 6.1% | ||||||||||||||||||||||
vendor priced | vendor priced | 79.64 | ||||||||||||||||||||||||
discounted cash flow | yield | 11.0% | ||||||||||||||||||||||||
market comparable | EV / Fwd EBITDA (x) | 5.92x | ||||||||||||||||||||||||
discounted cash flow | discount rate | 6.2% - 10.7% | ||||||||||||||||||||||||
discounted cash flow | exit cap | 6.2% | ||||||||||||||||||||||||
discounted cash flow | option adjusted spread | 241 bps | ||||||||||||||||||||||||
Mortgage-backed and other asset-backed securities | 104.6 | vendor price | haircut | 0.01% -0.3% | ||||||||||||||||||||||
discounted cash flow | discount margin | 39.5% | ||||||||||||||||||||||||
discounted cash flow | discount rate | 16.0% - 21.0% | ||||||||||||||||||||||||
discounted cash flow | median comparable yield | 20.7% - 43.2% | ||||||||||||||||||||||||
discounted cash flow | yield | 6.4% - 6.5% | ||||||||||||||||||||||||
discounted cash flow | LIBOR | 2.3% | ||||||||||||||||||||||||
discounted cash flow | PDI spread | 5.5% | ||||||||||||||||||||||||
discounted cash flow | SBL spread | 4.5% | ||||||||||||||||||||||||
discounted cash flow | weighting | 17.0% - 83.0% | ||||||||||||||||||||||||
discounted cash flow | CPR | 20.0% | ||||||||||||||||||||||||
discounted cash flow | default rate annual | 4.0% | ||||||||||||||||||||||||
discounted cash flow | recovery | 65.0% | ||||||||||||||||||||||||
discounted cash flow | I spread | 175 bps | ||||||||||||||||||||||||
discounted cash flow | N spread | 463 bps | ||||||||||||||||||||||||
discounted cash flow | T Spread | 226 bps | ||||||||||||||||||||||||
market comparable | median price | 81.34 | ||||||||||||||||||||||||
Equity securities | 2.0 | black-scholes | volatility | low 28.0% - high 44.0% | ||||||||||||||||||||||
black-scholes | time to exit | 2.67 bps | ||||||||||||||||||||||||
market comparable | price/book ExAOCI | 1.06x |
($ in millions) | ||||||||||||||||||||||||||
Financial Liabilities | Fair Value as of March 31, 2023 | Valuation Technique(s) | Unobservable Inputs | Range (Weighted Average) and Single Point Best Estimate(1) | ||||||||||||||||||||||
Derivatives embedded in fixed indexed annuity products | $ | 89.9 | discounted cash flow | lapse rate | 5.4% | |||||||||||||||||||||
mortality multiplier(4) | 67.8% | |||||||||||||||||||||||||
option budget | 0.9% - 3.5% | |||||||||||||||||||||||||
non-performance adjustment(5) | 5.0% |
Horace Mann Educators Corporation | 19 | First Quarter 2023 Form 10-Q |
($ in millions) | Carrying Amount | Fair Value | Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Other investments | $ | 174.3 | $ | 177.8 | $ | — | $ | — | $ | 177.8 | ||||||||||||||||||||||
Deposit asset on reinsurance | 2,517.9 | 2,270.6 | — | — | 2,270.6 | |||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Investment contract and future policy benefit reserves, fixed annuity contracts | 4,954.6 | 4,854.3 | — | — | 4,854.3 | |||||||||||||||||||||||||||
Investment contract and future policy benefit reserves, account values on life contracts | 113.3 | 109.3 | — | — | 109.3 | |||||||||||||||||||||||||||
Other policyholder funds | 938.4 | 938.4 | — | 888.1 | 50.3 | |||||||||||||||||||||||||||
Reverse repurchase agreements | 70.2 | 74.7 | — | 74.7 | — | |||||||||||||||||||||||||||
Short-term debt | 249.0 | 249.0 | — | — | 249.0 | |||||||||||||||||||||||||||
Long-term debt | 249.0 | 239.7 | — | 239.7 | — | |||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Other investments | $ | 167.4 | $ | 170.9 | $ | — | $ | — | $ | 170.9 | ||||||||||||||||||||||
Deposit asset on reinsurance | 2,516.6 | 2,207.2 | — | — | 2,207.2 | |||||||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Investment contract and future policy benefit reserves, fixed annuity contracts | 4,988.5 | 4,901.3 | — | — | 4,901.3 | |||||||||||||||||||||||||||
Investment contract and future policy benefit reserves, account values on life contracts | 111.9 | 107.7 | — | — | 107.7 | |||||||||||||||||||||||||||
Other policyholder funds | 863.0 | 863.0 | — | 810.7 | 52.3 | |||||||||||||||||||||||||||
Reverse repurchase agreements | 70.2 | 73.3 | — | 73.3 | — | |||||||||||||||||||||||||||
Short-term debt | 249.0 | 249.0 | — | — | 249.0 | |||||||||||||||||||||||||||
Long-term debt | 249.0 | 240.5 | — | 240.5 | — |
($ in thousands) | Fair Value Measurements at | |||||||||||||||||||
Carrying | Fair | Reporting Date Using | ||||||||||||||||||
Amount | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
September 30, 2017 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Other investments | $ | 154,630 | $ | 159,253 | $ | — | $ | — | $ | 159,253 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Investment contract reserves | 4,428,989 | 4,338,318 | — | — | 4,338,318 | |||||||||||||||
Life policy reserves, account values on life contracts | 81,520 | 86,906 | — | — | 86,906 | |||||||||||||||
Other policyholder funds | 644,383 | 644,383 | — | 575,579 | 68,804 | |||||||||||||||
Long-term debt | 247,403 | 264,781 | 264,781 | — | — | |||||||||||||||
December 31, 2016 | ||||||||||||||||||||
Financial Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Other investments | $ | 151,965 | $ | 156,536 | $ | — | $ | — | $ | 156,536 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Investment contract reserves | 4,360,456 | 4,280,528 | — | — | 4,280,528 | |||||||||||||||
Life policy reserves, account values on life contracts | 79,591 | 85,066 | — | — | 85,066 | |||||||||||||||
Other policyholder funds | 649,557 | 649,557 | — | 575,253 | 74,304 | |||||||||||||||
Long-term debt | 247,209 | 248,191 | 248,191 | — | — |
($ in thousands) | September 30, 2017 | December 31, 2016 | ||||||
Assets | ||||||||
Derivative instruments, included in Short-term and other investments | $ | 10,431 | $ | 8,694 | ||||
Liabilities | ||||||||
FIA - embedded derivatives, included in Other policyholder funds | $ | 72,986 | $ | 59,393 | ||||
IUL - embedded derivatives, included in Investment contract and life policy reserves | 390 | 158 |
($ in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Change in fair value of derivatives (1): | ||||||||||||||||
Revenues | ||||||||||||||||
Net realized investment gains | $ | 2,943 | $ | 562 | $ | 7,109 | $ | 422 | ||||||||
Change in fair value of embedded derivatives: | ||||||||||||||||
Revenues | ||||||||||||||||
Net realized investment losses | $ | (2,702 | ) | $ | (76 | ) | $ | (6,363 | ) | $ | (2,077 | ) |
First Quarter 2023 Form 10-Q |
($ in thousands) | September 30, 2017 | December 31, 2016 | ||||||||||||||||
Credit Rating | Notional | Fair | Notional | Fair | ||||||||||||||
Counterparty | S&P | Amount | Value | Amount | Value | |||||||||||||
Bank of America, N.A. | A+ | $ | 74,400 | $ | 2,466 | $ | 38,500 | $ | 1,934 | |||||||||
Barclays Bank PLC | A | 68,900 | 3,017 | 66,800 | 1,543 | |||||||||||||
Citigroup Inc. | BBB+ | — | — | — | — | |||||||||||||
Credit Suisse International | A | 29,100 | 2,041 | 65,200 | 4,281 | |||||||||||||
Societe Generale | A | 68,900 | 2,907 | 15,600 | 936 | |||||||||||||
Total | $ | 241,300 | $ | 10,431 | $ | 186,100 | $ | 8,694 |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Property & Casualty | ||||||||||||||||||||||||||
Beginning gross reserves | $ | 388.7 | $ | 362.4 | ||||||||||||||||||||||
Less: reinsurance recoverables | 100.8 | 110.3 | ||||||||||||||||||||||||
Net reserves, beginning of period(1) | 287.9 | 252.1 | ||||||||||||||||||||||||
Incurred claims and claim expenses: | ||||||||||||||||||||||||||
Claims occurring in the current period | 128.8 | 108.3 | ||||||||||||||||||||||||
Increase (decrease) in estimated reserves for claims occurring in prior periods(2) | — | — | ||||||||||||||||||||||||
Total claims and claim expenses incurred | 128.8 | 108.3 | ||||||||||||||||||||||||
Claims and claim expense payments for claims occurring during: | ||||||||||||||||||||||||||
Current period | 40.6 | 33.8 | ||||||||||||||||||||||||
Prior periods | 79.6 | 78.4 | ||||||||||||||||||||||||
Total claims and claim expense payments | 120.2 | 112.2 | ||||||||||||||||||||||||
Net reserves, end of period(1) | 296.5 | 248.2 | ||||||||||||||||||||||||
Plus: reinsurance recoverables | 101.3 | 108.0 | ||||||||||||||||||||||||
Ending gross reserves | $ | 397.8 | $ | 356.2 |
($ in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Property and Casualty segment | ||||||||||||||||
Beginning Gross reserves (1) | $ | 329,831 | $ | 320,961 | $ | 307,757 | $ | 301,569 | ||||||||
Less: reinsurance recoverables | 58,897 | 60,499 | 61,199 | 50,332 | ||||||||||||
Net reserves, beginning of period (2) | 270,934 | 260,462 | 246,558 | 251,237 | ||||||||||||
Incurred claims and claim expenses: | ||||||||||||||||
Claims occurring in the current period | 115,393 | 116,709 | 386,945 | 351,270 | ||||||||||||
Decrease in estimated reserves for claims occurring in prior periods (3) | (500 | ) | (700 | ) | (2,100 | ) | (4,300 | ) | ||||||||
Total claims and claim expenses incurred (4) | 114,893 | 116,009 | 384,845 | 346,970 | ||||||||||||
Claims and claim expense payments for claims occurring during: | ||||||||||||||||
Current period | 97,188 | 99,832 | 245,213 | 228,462 | ||||||||||||
Prior periods | 28,054 | 27,976 | 125,605 | 121,082 | ||||||||||||
Total claims and claim expense payments | 125,242 | 127,808 | 370,818 | 349,544 | ||||||||||||
Net reserves, end of period (2) | 260,585 | 248,663 | 260,585 | 248,663 | ||||||||||||
Plus: reinsurance recoverables | 57,302 | 61,893 | 57,302 | 61,893 | ||||||||||||
Ending Gross reserves (1) | $ | 317,887 | $ | 310,556 | $ | 317,887 | $ | 310,556 |
First Quarter 2023 Form 10-Q |
NOTE 4 - Short-Duration Insurance Contracts (continued)
(1) Reserves net of expected reinsurance recoverables. (2) Shows the amounts by which the Company increased (decreased) its reserves in each of the periods indicated for |
($ in millions) | As of March 31, 2023 | As of December 31, 2022 | ||||||||||||
Ending gross reserves | ||||||||||||||
Property & Casualty | $ | 397.8 | $ | 388.7 | ||||||||||
Group Benefits | 120.3 | 121.6 | ||||||||||||
Total short-duration insurance contracts | 518.1 | 510.3 | ||||||||||||
Other than short-duration(1) | 56.7 | 53.7 | ||||||||||||
Total unpaid claims and claims expenses | $ | 574.8 | $ | 564.0 |
Horace Mann Educators Corporation | 22 | First Quarter 2023 Form 10-Q |
($ in millions) | ||||||||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life(1) | Limited-Pay Whole Life | Supplemental Health(2) | SPIA (life contingent) | |||||||||||||||||||||||||||||||||
Present value of expected net premiums: | ||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | 215.1 | $ | 234.7 | $ | 68.3 | $ | 29.7 | $ | 167.4 | $ | — | ||||||||||||||||||||||||||
January 1, 2023 balance at original discount rate | 245.9 | 265.4 | 65.5 | 32.4 | 205.1 | — | ||||||||||||||||||||||||||||||||
Effect of: | ||||||||||||||||||||||||||||||||||||||
Change in cash flow assumptions | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Actual variances from expected experience | 0.8 | (1.5) | 0.2 | 0.5 | (1.4) | — | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2023 | 246.7 | 263.9 | 65.7 | 32.9 | 203.7 | — | ||||||||||||||||||||||||||||||||
Issuances(3) | 2.8 | 6.5 | — | 1.0 | 5.3 | 2.0 | ||||||||||||||||||||||||||||||||
Interest accruals(4) | 1.8 | 2.5 | 1.0 | 0.3 | 1.5 | — | ||||||||||||||||||||||||||||||||
Net premiums collected(5) | (4.7) | (6.9) | (1.7) | (1.1) | (5.4) | (2.0) | ||||||||||||||||||||||||||||||||
March 31, 2023 balance at original discount rate | 246.6 | 266.0 | 65.0 | 33.1 | 205.1 | — | ||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | (24.4) | (22.2) | 4.8 | (1.9) | (32.6) | — | ||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | 222.2 | 243.8 | 69.8 | 31.2 | 172.5 | — | ||||||||||||||||||||||||||||||||
Present value of expected future policy benefits: | ||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2023 | 493.6 | 347.0 | 867.5 | 79.4 | 431.7 | 103.3 | ||||||||||||||||||||||||||||||||
January 1, 2023 balance at original discount rate | 581.9 | 401.0 | 805.2 | 98.6 | 537.1 | 113.4 | ||||||||||||||||||||||||||||||||
Effect of: | ||||||||||||||||||||||||||||||||||||||
Changes in cash flow assumptions | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Actual variances from expected experience | 0.8 | (1.5) | 0.4 | 0.6 | (1.7) | (0.5) | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2023 | 582.7 | 399.5 | 805.6 | 99.2 | 535.4 | 112.9 | ||||||||||||||||||||||||||||||||
Issuances | 2.9 | 6.6 | — | 1.0 | 5.3 | 2.4 | ||||||||||||||||||||||||||||||||
Interest accruals | 4.7 | 4.0 | 11.9 | 0.9 | 3.6 | 1.1 | ||||||||||||||||||||||||||||||||
Benefit payments(6) | (4.9) | (4.9) | (16.0) | (0.8) | (13.7) | (3.1) | ||||||||||||||||||||||||||||||||
March 31, 2023 balance at original discount rate | 585.4 | 405.2 | 801.5 | 100.3 | 530.6 | 113.3 | ||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | (70.3) | (40.2) | 91.0 | (15.9) | (92.9) | (7.4) | ||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | 515.1 | 365.0 | 892.5 | 84.4 | 437.7 | 105.9 | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits | 292.8 | 121.2 | 822.8 | 53.3 | 265.3 | 105.9 | ||||||||||||||||||||||||||||||||
Less: Reinsurance recoverable | (65.0) | (16.6) | (0.8) | (0.1) | (3.7) | (3.5) | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits, after reinsurance recoverable | 227.8 | 104.6 | 822.0 | 53.2 | 261.6 | 102.4 | ||||||||||||||||||||||||||||||||
Impact of flooring on net liability for future policy benefits | 0.3 | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits at March 31, 2023 | $ | 228.1 | $ | 104.6 | $ | 822.0 | $ | 53.2 | $ | 261.6 | $ | 102.4 |
($ in thousands) | September 30, 2017 | December 31, 2016 | ||||||
Short-term debt: | ||||||||
Bank Credit Facility, expires July 30, 2019 | $ | — | $ | — | ||||
Long-term debt: | ||||||||
4.50% Senior Notes, due December 1, 2025. Aggregate principal amount of $250,000 thousand less unaccrued discount of $561 thousand and $603 thousand (4.5% imputed rate) and unamortized debt issuance costs of $2,036 thousand and $2,188 thousand | 247,403 | 247,209 |
Horace Mann Educators Corporation | 23 | First Quarter 2023 Form 10-Q |
($ in millions) | ||||||||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life(1) | Limited-Pay Whole Life | Supplemental Health(2) | SPIA (life contingent) | |||||||||||||||||||||||||||||||||
Present Value of Expected Net Premiums | ||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022(7) | $ | 260.7 | $ | 264.4 | $ | 74.6 | $ | 29.7 | $ | 226.7 | $ | — | ||||||||||||||||||||||||||
January 1, 2022 balance at original discount rate(7) | 239.3 | 235.4 | 55.9 | 27.2 | 223.1 | — | ||||||||||||||||||||||||||||||||
Effect of: | ||||||||||||||||||||||||||||||||||||||
Change in cash flow assumptions | 5.2 | 18.7 | 9.1 | 2.0 | 12.2 | — | ||||||||||||||||||||||||||||||||
Actual variances from expected experience | 7.2 | (4.2) | 3.0 | 1.6 | (25.3) | — | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2022 | 251.7 | 249.9 | 68.0 | 30.8 | 210.0 | — | ||||||||||||||||||||||||||||||||
Issuances(3) | 12.5 | 28.0 | — | 6.3 | 12.0 | 5.3 | ||||||||||||||||||||||||||||||||
Interest accruals(3) | 6.7 | 9.0 | 3.3 | 1.1 | 5.9 | — | ||||||||||||||||||||||||||||||||
Net premiums collected(5) | (25.0) | (21.5) | (5.8) | (5.8) | (22.8) | (5.3) | ||||||||||||||||||||||||||||||||
December 31, 2022 balance at original discount rate | 245.9 | 265.4 | 65.5 | 32.4 | 205.1 | — | ||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | (30.8) | (30.7) | 2.8 | (2.7) | (37.7) | — | ||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 215.1 | 234.7 | 68.3 | 29.7 | 167.4 | — | ||||||||||||||||||||||||||||||||
Present Value of Expected Future Policy Benefits | ||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022(7) | 660.4 | 411.5 | 1,172.7 | 102.9 | 590.6 | 129.1 | ||||||||||||||||||||||||||||||||
January 1, 2022 balance at original discount rate(7) | 566.1 | 360.0 | 802.6 | 86.6 | 584.2 | 115.7 | ||||||||||||||||||||||||||||||||
Effect of: | ||||||||||||||||||||||||||||||||||||||
Changes in cash flow assumptions | 5.2 | 21.5 | 11.0 | 2.0 | 13.8 | — | ||||||||||||||||||||||||||||||||
Actual variances from expected experience | 7.7 | (4.7) | 3.6 | 1.4 | (30.0) | 0.4 | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2022 | 579.0 | 376.8 | 817.2 | 90.0 | 568.0 | 116.1 | ||||||||||||||||||||||||||||||||
Issuances | 12.4 | 28.3 | — | 6.4 | 12.0 | 5.3 | ||||||||||||||||||||||||||||||||
Interest accruals | 18.0 | 14.4 | 47.4 | 3.4 | 15.0 | 4.3 | ||||||||||||||||||||||||||||||||
Benefit payments(6) | (27.5) | (18.5) | (59.4) | (1.2) | (57.9) | (12.3) | ||||||||||||||||||||||||||||||||
December 31, 2022 balance at original discount rate | 581.9 | 401.0 | 805.2 | 98.6 | 537.1 | 113.4 | ||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | (88.3) | (54.0) | 62.3 | (19.2) | (105.4) | (10.1) | ||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 493.6 | 347.0 | 867.5 | 79.4 | 431.7 | 103.3 | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits | 278.4 | 112.2 | 799.3 | 49.6 | 264.4 | 103.3 | ||||||||||||||||||||||||||||||||
Less: Reinsurance recoverable | (63.1) | (15.3) | (0.8) | — | (3.4) | (3.2) | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits, after reinsurance recoverable | 215.3 | 96.9 | 798.5 | 49.6 | 261.0 | 100.1 | ||||||||||||||||||||||||||||||||
Impact of flooring on net liability for future policy benefits | 1.1 | 0.2 | — | — | — | — | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits at December 31, 2022 | $ | 216.4 | $ | 97.1 | $ | 798.5 | $ | 49.6 | $ | 261.0 | $ | 100.1 |
Horace Mann Educators Corporation | 24 | First Quarter 2023 Form 10-Q |
($ in millions) | ||||||||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life(1) | Limited-Pay Whole Life | Supplemental Health(2) | SPIA (life contingent) | |||||||||||||||||||||||||||||||||
Present Value of Expected Net Premiums | ||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | $ | 176.5 | $ | 244.1 | $ | 78.0 | $ | 25.4 | $ | 233.0 | $ | — | ||||||||||||||||||||||||||
January 1, 2021 balance at original discount rate | 143.5 | 200.8 | 55.2 | 22.0 | 218.2 | — | ||||||||||||||||||||||||||||||||
Effect of: | ||||||||||||||||||||||||||||||||||||||
Change in cash flow assumptions | 2.4 | (4.5) | (3.3) | — | (1.8) | — | ||||||||||||||||||||||||||||||||
Actual variances from expected experience | 8.8 | 6.9 | 6.3 | 1.0 | 6.3 | — | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2021 | 154.7 | 203.2 | 58.2 | 23.0 | 222.7 | — | ||||||||||||||||||||||||||||||||
Issuances(3) | 13.3 | 29.8 | — | 10.2 | 13.0 | 3.7 | ||||||||||||||||||||||||||||||||
Interest accruals(4) | 6.2 | 7.9 | 3.2 | 0.8 | 5.9 | — | ||||||||||||||||||||||||||||||||
Net premiums collected(5) | (16.6) | (19.8) | (5.6) | (6.8) | (24.1) | (3.7) | ||||||||||||||||||||||||||||||||
December 31, 2021 balance at original discount rate | 157.6 | 221.1 | 55.8 | 27.2 | 217.5 | — | ||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | 25.4 | 32.0 | 18.8 | 2.5 | 4.0 | — | ||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 183.0 | 253.1 | 74.6 | 29.7 | 221.5 | — | ||||||||||||||||||||||||||||||||
Present Value of Expected Future Policy benefits | ||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | 507.1 | 364.7 | 1,269.3 | 95.0 | 626.9 | 136.5 | ||||||||||||||||||||||||||||||||
January 1, 2021 balance at original discount rate | 362.5 | 294.0 | 813.5 | 73.4 | 589.1 | 115.9 | ||||||||||||||||||||||||||||||||
Effect of: | ||||||||||||||||||||||||||||||||||||||
Changes in cash flow assumptions | 2.8 | (4.8) | (3.6) | — | (3.0) | — | ||||||||||||||||||||||||||||||||
Actual variances from expected experience | 8.7 | 7.2 | 6.6 | 1.1 | 6.2 | (0.4) | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2021 | 374.0 | 296.4 | 816.5 | 74.5 | 592.3 | 115.5 | ||||||||||||||||||||||||||||||||
Issuances | 13.3 | 29.8 | — | 10.2 | 13.0 | 3.7 | ||||||||||||||||||||||||||||||||
Interest accruals | 17.1 | 12.0 | 47.9 | 2.9 | 15.7 | 4.5 | ||||||||||||||||||||||||||||||||
Benefit payments(5) | (18.1) | (18.7) | (61.9) | (1.0) | (48.4) | (12.1) | ||||||||||||||||||||||||||||||||
December 31, 2021 balance at original discount rate | 386.3 | 319.5 | 802.5 | 86.6 | 572.6 | 111.6 | ||||||||||||||||||||||||||||||||
Effect of changes in discount rate assumptions | 114.4 | 51.1 | 370.2 | 16.3 | 8.0 | 13.1 | ||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 500.7 | 370.6 | 1,172.7 | 102.9 | 580.6 | 124.7 | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits | 317.7 | 117.6 | 1,098.1 | 73.2 | 359.1 | 124.7 | ||||||||||||||||||||||||||||||||
Less: Reinsurance recoverable | (0.5) | (5.5) | (1.1) | (0.2) | — | — | ||||||||||||||||||||||||||||||||
Net liability for future policy benefits, after reinsurance recoverable | $ | 317.2 | $ | 112.1 | $ | 1,097.0 | $ | 73.0 | $ | 359.1 | $ | 124.7 |
Horace Mann Educators Corporation | 25 | First Quarter 2023 Form 10-Q |
($ in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Whole life | $ | 293.1 | $ | 279.5 | ||||||||||
Term life | 121.2 | 112.4 | ||||||||||||
Experience life | 822.8 | 799.3 | ||||||||||||
Limited-pay whole life | 53.3 | 49.6 | ||||||||||||
Supplemental health | 265.3 | 264.4 | ||||||||||||
SPIA (life contingent) | 105.9 | 103.3 | ||||||||||||
Limited-pay whole life DPL | 3.3 | 3.2 | ||||||||||||
SPIA (life contingent) DPL | 1.0 | 0.8 | ||||||||||||
Reconciling items(1) | 106.5 | 105.5 | ||||||||||||
Total | $ | 1,772.4 | $ | 1,718.0 |
($ in millions) | Gross premiums or assessments | Interest expense | ||||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Whole life | $ | 6.6 | $ | 6.1 | $ | 2.9 | $ | 2.7 | ||||||||||||||||||
Term life | 10.8 | 9.9 | 1.2 | 1.1 | ||||||||||||||||||||||
Experience life | 8.2 | 8.5 | 11.0 | 11.1 | ||||||||||||||||||||||
Limited-pay whole life | 1.6 | 1.8 | 0.6 | 0.6 | ||||||||||||||||||||||
Supplemental health | 29.7 | 30.7 | 2.2 | 2.4 | ||||||||||||||||||||||
SPIA (life contingent) | 2.2 | 2.5 | 1.1 | 1.1 | ||||||||||||||||||||||
Total | $ | 59.1 | $ | 59.5 | $ | 19.0 | $ | 19.0 |
($ in millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | ||||||||||||||||||||||||
Undiscounted | Discounted | Undiscounted | Discounted | |||||||||||||||||||||||
Whole life | ||||||||||||||||||||||||||
Expected future gross premiums | $ | 471.6 | $ | 322.5 | $ | 448.0 | $ | 308.9 | ||||||||||||||||||
Expected future benefits and expenses | 1,128.1 | 585.4 | 1,080.6 | 568.1 | ||||||||||||||||||||||
Term life | ||||||||||||||||||||||||||
Expected future gross premiums | 744.6 | 465.3 | 720.9 | 447.0 | ||||||||||||||||||||||
Expected future benefits and expenses | 687.8 | 405.2 | 597.0 | 355.8 | ||||||||||||||||||||||
Experience Life | ||||||||||||||||||||||||||
Expected future gross premiums | 559.0 | 310.2 | 598.4 | 329.4 | ||||||||||||||||||||||
Expected future benefits and expenses | 1,740.3 | 801.5 | 1,774.5 | 799.5 | ||||||||||||||||||||||
Limited-pay whole life | ||||||||||||||||||||||||||
Expected future gross premiums | 61.9 | 47.3 | 51.3 | 39.7 | ||||||||||||||||||||||
Expected future benefits and expenses | 230.7 | 100.3 | 196.9 | 88.8 | ||||||||||||||||||||||
Supplemental health | ||||||||||||||||||||||||||
Expected future gross premiums | 1,644.2 | 1,215.1 | 1,633.3 | 127.3 | ||||||||||||||||||||||
Expected future benefits and expenses | 724.6 | 530.6 | 776.3 | 577.4 | ||||||||||||||||||||||
SPIA (life contingent) | ||||||||||||||||||||||||||
Expected future gross premiums | — | — | — | — | ||||||||||||||||||||||
Expected future benefits and expenses | 158.2 | 113.3 | 161.6 | 116.2 |
Horace Mann Educators Corporation | 26 | First Quarter 2023 Form 10-Q |
March 31, 2023 | ||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life | Limited-Pay Whole Life | SPIA (life contingent) | ||||||||||||||||||||||||||||
Mortality | ||||||||||||||||||||||||||||||||
Actual experience | 0.7 | % | 0.1% - 0.3% | 1.9 | % | — | % | N.M. | ||||||||||||||||||||||||
Expected experience | 0.7 | % | 0.1% - 0.6% | 1.6 | % | 0.2 | % | N.M. | ||||||||||||||||||||||||
Lapses | ||||||||||||||||||||||||||||||||
Actual experience | 3.6 | % | 5.6% - 8.3% | 3.4 | % | 3.6 | % | N.M. | ||||||||||||||||||||||||
Expected experience | 4.6 | % | 2.8% - 5.6% | 3.0 | % | 5.1 | % | N.M. | ||||||||||||||||||||||||
March 31, 2022 | ||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life | Limited-Pay Whole Life | SPIA (life contingent) | ||||||||||||||||||||||||||||
Mortality | ||||||||||||||||||||||||||||||||
Actual experience | 0.8 | % | 0.1% - 0.1% | 1.8 | % | 0.4 | % | N.M. | ||||||||||||||||||||||||
Expected experience | 0.7 | % | 0.1% - 0.3% | 1.4 | % | 0.2 | % | N.M. | ||||||||||||||||||||||||
Lapses | ||||||||||||||||||||||||||||||||
Actual experience | 3.0 | % | 5.2% - 76.1% | 3.1 | % | 2.9 | % | N.M. | ||||||||||||||||||||||||
Expected experience | 5.7 | % | 2.8% - 6.6% | 3.1 | % | 7.2 | % | N.M. |
As of March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Whole life | 18 | 18 | ||||||||||||
Term life | 17 | 16 | ||||||||||||
Experience life | 11 | 11 | ||||||||||||
Limited-pay whole life | 23 | 21 | ||||||||||||
Supplemental health | 10.2 | 9.8 | ||||||||||||
SPIA (life contingent) | 8 | 8 |
Horace Mann Educators Corporation | 27 | First Quarter 2023 Form 10-Q |
As of March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Whole life | ||||||||||||||
Interest accretion rate | 1.7% - 4.9% | 1.7% - 5.0% | ||||||||||||
Current discount rate | 4.7% - 5.0% | 3.2% - 3.7% | ||||||||||||
Term life | ||||||||||||||
Interest accretion rate | 4.1% - 4.3% | 4.1% - 4.4% | ||||||||||||
Current discount rate | 4.9% - 5.0% | 3.6% - 3.6% | ||||||||||||
Experience life | ||||||||||||||
Interest accretion rate | 6.1 | % | 6.1 | % | ||||||||||
Current discount rate | 5.0 | % | 3.7 | % | ||||||||||
Limited-pay whole life | ||||||||||||||
Interest accretion rate | 3.9 | % | 3.9 | % | ||||||||||
Current discount rate | 5.0 | % | 3.7 | % | ||||||||||
Supplemental health | ||||||||||||||
Interest accretion rate | 1.7% - 2.7% | 1.7% - 2.7% | ||||||||||||
Current discount rate | 5.0% - 5.2% | 3.5% - 4.0% | ||||||||||||
SPIA (life contingent) | ||||||||||||||
Interest accretion rate | 1.7% - 4.1% | 1.7% - 4.0% | ||||||||||||
Current discount rate | 4.9% - 5.0% | 3.5% - 3.5% |
Horace Mann Educators Corporation | 28 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||
Indexed Universal Life | Experience Life | Fixed Account Annuities | Fixed Indexed Account Annuities | SPIA (non-life contingent) | ||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | 47.6 | $ | 64.3 | $ | 4,591.1 | $ | 510.3 | $ | 34.4 | ||||||||||||||||||||||
Premiums received(1) | $ | 3.6 | $ | (0.2) | $ | 54.9 | $ | 5.1 | $ | 1.1 | ||||||||||||||||||||||
Surrenders and withdrawals(2) | (0.4) | (0.9) | (98.1) | (13.9) | (0.1) | |||||||||||||||||||||||||||
Benefit payments(3) | — | (0.5) | (19.1) | (0.6) | (1.7) | |||||||||||||||||||||||||||
Net transfers from (to) separate account | — | — | 6.6 | (0.9) | — | |||||||||||||||||||||||||||
Interest credited(4) | — | 0.8 | 40.1 | — | 0.3 | |||||||||||||||||||||||||||
Other | (0.9) | — | 1.9 | (1.6) | (0.2) | |||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | 49.9 | $ | 63.5 | $ | 4,577.4 | $ | 498.4 | $ | 33.8 | ||||||||||||||||||||||
Weighted-average crediting rate | 0.1 | % | 5.0 | % | 3.6 | % | — | % | 3.0 | % | ||||||||||||||||||||||
Net amount at risk(5) | $ | — | $ | — | $ | 39.5 | $ | — | $ | — | ||||||||||||||||||||||
Cash surrender value | $ | 32.9 | $ | 62.8 | $ | 4,540.9 | $ | 486.7 | $ | 33.7 | ||||||||||||||||||||||
($ in millions) | Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||
Indexed Universal Life | Experience Life | Fixed Account Annuities | Fixed Indexed Account Annuities | SPIA (non-life contingent) | ||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | 39.1 | $ | 66.2 | $ | 4,532.7 | $ | 522.6 | $ | 37.7 | ||||||||||||||||||||||
Premiums received(1) | $ | 2.2 | $ | — | $ | 47.2 | $ | 9.3 | $ | 0.8 | ||||||||||||||||||||||
Surrenders and withdrawals(2) | (0.2) | (0.7) | (60.3) | (10.9) | (0.3) | |||||||||||||||||||||||||||
Benefit payments(3) | — | (0.4) | (18.5) | (1.1) | (1.5) | |||||||||||||||||||||||||||
Net transfers from (to) separate account | — | — | 11.0 | (0.1) | — | |||||||||||||||||||||||||||
Interest credited(4) | 0.5 | 0.8 | 38.9 | 1.8 | 0.3 | |||||||||||||||||||||||||||
Other | (0.6) | — | (2.8) | (3.4) | — | |||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | 41.0 | $ | 65.9 | $ | 4,548.2 | $ | 518.2 | $ | 37.0 | ||||||||||||||||||||||
Weighted-average crediting rate | 5.4 | % | 5.0 | % | 3.5 | % | 1.4 | % | 3.0 | % | ||||||||||||||||||||||
Net amount at risk(5) | $ | — | $ | — | $ | 66.4 | $ | — | $ | — | ||||||||||||||||||||||
Cash surrender value | $ | 26.0 | $ | 65.2 | $ | 4,489.4 | $ | 504.2 | $ | 36.6 |
Horace Mann Educators Corporation | 29 | First Quarter 2023 Form 10-Q |
($ in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Indexed universal life | $ | 49.9 | $ | 47.6 | ||||||||||
Experience Life | 63.5 | 64.3 | ||||||||||||
Fixed account annuities | 4,577.4 | 4,591.1 | ||||||||||||
Fixed indexed account annuities | 498.4 | 510.3 | ||||||||||||
SPIA (non-life contingent) | 33.8 | 34.4 | ||||||||||||
Reconciling items(1) | 11.6 | 12.9 | ||||||||||||
Total | $ | 5,234.6 | $ | 5,260.6 |
($ in millions) | March 31, 2023 | |||||||||||||||||||||||||||||||
At Guaranteed Minimum | 1-50 Basis Points Above | 51-150 Basis Points Above | Greater Than 150 Basis Points Above | Total(1) | ||||||||||||||||||||||||||||
Guaranteed minimum crediting rates: | ||||||||||||||||||||||||||||||||
Less than 2% | $ | 95.5 | $ | 393.9 | $ | 329.9 | $ | 128.1 | $ | 947.4 | ||||||||||||||||||||||
Equal to 2% but less than 3% | 232.8 | 36.4 | 6.8 | — | 276.0 | |||||||||||||||||||||||||||
Equal to 3% but less than 4% | 653.5 | 0.4 | 0.5 | — | 654.4 | |||||||||||||||||||||||||||
Equal to 4% but less than 5% | 2,705.6 | — | — | — | 2,705.6 | |||||||||||||||||||||||||||
5% or higher | 90.9 | — | — | — | 90.9 | |||||||||||||||||||||||||||
Total | $ | 3,778.3 | $ | 430.7 | $ | 337.2 | $ | 128.1 | $ | 4,674.3 | ||||||||||||||||||||||
($ in millions) | December 31, 2022 | |||||||||||||||||||||||||||||||
At Guaranteed Minimum | 1-50 Basis Points Above | 51-150 Basis Points Above | Greater Than 150 Basis Points Above | Total(1) | ||||||||||||||||||||||||||||
Guaranteed minimum crediting rates: | ||||||||||||||||||||||||||||||||
Less than 2% | $ | 262.5 | $ | 370.6 | $ | 214.4 | $ | 96.1 | $ | 943.6 | ||||||||||||||||||||||
Equal to 2% but less than 3% | 256.1 | 19.8 | 4.7 | — | 280.6 | |||||||||||||||||||||||||||
Equal to 3% but less than 4% | 667.4 | 0.4 | 0.4 | — | 668.2 | |||||||||||||||||||||||||||
Equal to 4% but less than 5% | 2,706.1 | — | — | — | 2,706.1 | |||||||||||||||||||||||||||
5% or higher | 91.7 | — | — | — | 91.7 | |||||||||||||||||||||||||||
Total | $ | 3,983.8 | $ | 390.8 | $ | 219.5 | $ | 96.1 | $ | 4,690.2 |
Horace Mann Educators Corporation | 30 | First Quarter 2023 Form 10-Q |
($ in millions) | Retirement Services | |||||||||||||
Variable Account Annuities | ||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||
Balance, beginning of year | $ | 2,792.3 | $ | 3,441.0 | ||||||||||
Deposits | 57.3 | 240.3 | ||||||||||||
Withdrawals | (46.6) | (186.8) | ||||||||||||
Net transfers | (5.6) | (38.1) | ||||||||||||
Fees and charges | (9.1) | (36.8) | ||||||||||||
Market appreciation (depreciation) | 168.2 | (619.7) | ||||||||||||
Other | (1.8) | (7.6) | ||||||||||||
Balance, end of period | $ | 2,954.7 | $ | 2,792.3 |
($ in millions) | March 31, 2023 | March 31, 2022 | ||||||||||||
Balance, beginning of year | $ | 0.2 | $ | 4.8 | ||||||||||
Balance, beginning of year, before effects of changes in the instrument-specific credit risk | — | 2.0 | ||||||||||||
Changes in market risk benefits(1) | 0.9 | (0.4) | ||||||||||||
Balance, end of period(2) | $ | 0.9 | $ | 1.6 | ||||||||||
Effect of changes in the instrument-specific credit risk | 0.4 | 2.4 | ||||||||||||
Balance, end of period | $ | 1.3 | $ | 4.0 | ||||||||||
Net amount at risk(3) | $ | 38.3 | $ | 20.2 | ||||||||||
Weighted-average attained age of contract holders | 63 | 62 |
($ in millions) | As of March 31, 2023 | As of December 31, 2022 | ||||||||||||||||||||||||||||||||||||
Asset | Liability | Net Liability | Asset | Liability | Net Liability | |||||||||||||||||||||||||||||||||
Deferred variable annuities | $ | 4.2 | $ | 5.5 | $ | 1.3 | $ | 4.4 | $ | 4.7 | $ | 0.3 |
Horace Mann Educators Corporation | 31 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life | Limited-Pay Whole Life | Indexed Universal Life | Supplemental Health | Total Annuities | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 20.9 | $ | 30.0 | $ | 5.8 | $ | 6.7 | $ | 15.4 | $ | 6.2 | $ | 221.1 | ||||||||||||||||||||||||||||||
Capitalizations | 0.6 | 1.3 | — | 0.2 | 0.5 | 0.6 | 4.0 | |||||||||||||||||||||||||||||||||||||
Amortization expense | (0.3) | (0.6) | — | (0.1) | (0.2) | (0.1) | (3.7) | |||||||||||||||||||||||||||||||||||||
Experience adjustment | — | — | — | — | — | — | (1.7) | |||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | 21.2 | $ | 30.7 | $ | 5.8 | $ | 6.8 | $ | 15.7 | $ | 6.7 | $ | 219.7 | ||||||||||||||||||||||||||||||
($ in millions) | Year Ended December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life | Limited-Pay Whole Life | Indexed Universal Life | Supplemental Health | Total Annuities | ||||||||||||||||||||||||||||||||||||||
Balance, beginning of year | $ | 19.1 | $ | 27.5 | $ | 6.0 | $ | 5.6 | $ | 13.7 | $ | 4.9 | $ | 223.3 | ||||||||||||||||||||||||||||||
Capitalizations | 3.0 | 5.0 | 0.2 | 1.4 | 2.5 | 1.8 | 15.5 | |||||||||||||||||||||||||||||||||||||
Amortization expense | (1.2) | (2.5) | (0.4) | (0.3) | (0.8) | (0.5) | (15.8) | |||||||||||||||||||||||||||||||||||||
Experience adjustment | — | — | — | — | — | — | (1.9) | |||||||||||||||||||||||||||||||||||||
Balance, end of year | $ | 20.9 | $ | 30.0 | $ | 5.8 | $ | 6.7 | $ | 15.4 | $ | 6.2 | $ | 221.1 | ||||||||||||||||||||||||||||||
($ in millions) | Year Ended December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||
Whole Life | Term Life | Experience Life | Limited-Pay Whole Life | Indexed Universal Life | Supplemental Health | Total Annuities | ||||||||||||||||||||||||||||||||||||||
Balance, end of year December 31, 2020 | $ | 17.8 | $ | 25.6 | $ | 2.6 | $ | 4.4 | $ | 11.3 | $ | 4.3 | $ | 137.7 | ||||||||||||||||||||||||||||||
Adjustment for removal of related balances in AOCI | — | — | 3.6 | — | 1.6 | — | 85.4 | |||||||||||||||||||||||||||||||||||||
Adjusted balance, beginning of year January 1, 2021 | $ | 17.8 | $ | 25.6 | $ | 6.2 | $ | 4.4 | $ | 12.9 | $ | 4.3 | $ | 223.1 | ||||||||||||||||||||||||||||||
Capitalizations | 2.4 | 4.2 | 0.2 | 1.5 | 1.7 | 1.1 | 17.3 | |||||||||||||||||||||||||||||||||||||
Amortization expense | (1.1) | (2.3) | (0.4) | (0.3) | (0.8) | (0.5) | (16.0) | |||||||||||||||||||||||||||||||||||||
Experience adjustment | — | — | — | — | (0.1) | — | (1.1) | |||||||||||||||||||||||||||||||||||||
Balance, end of year December 31, 2021 | $ | 19.1 | $ | 27.5 | $ | 6.0 | $ | 5.6 | $ | 13.7 | $ | 4.9 | $ | 223.3 |
Horace Mann Educators Corporation | 32 | First Quarter 2023 Form 10-Q |
($ in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Whole life | $ | 21.2 | $ | 20.9 | ||||||||||
Term life | 30.7 | 30.0 | ||||||||||||
Experience life | 5.8 | 5.8 | ||||||||||||
Limited pay whole life | 6.8 | 6.7 | ||||||||||||
Indexed universal life | 15.7 | 15.4 | ||||||||||||
Supplemental health | 6.7 | 6.2 | ||||||||||||
Total annuities | 219.7 | 221.1 | ||||||||||||
Reconciling item(1) | 25.0 | 24.5 | ||||||||||||
Total | $ | 331.6 | $ | 330.6 |
($ in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Balance, beginning of year | $ | 15.9 | $ | 17.3 | ||||||||||
Capitalizations | — | — | ||||||||||||
Amortization expense | (0.3) | (0.3) | ||||||||||||
Experience adjustment | (0.2) | (0.1) | ||||||||||||
Balance, end of period | $ | 15.4 | $ | 16.9 |
Horace Mann Educators Corporation | 33 | First Quarter 2023 Form 10-Q |
($ in millions) | Direct Amount | Ceded to Other Companies(1) | Assumed from Other Companies | Net Amount | ||||||||||||||||||||||
Three months ended March 31, 2023 | ||||||||||||||||||||||||||
Net premiums written and contract deposits(2) | $ | 367.8 | $ | 16.6 | $ | 10.4 | $ | 361.6 | ||||||||||||||||||
Net premiums and contract charges earned | 264.0 | 18.5 | 10.4 | 255.9 | ||||||||||||||||||||||
Benefits, claims and settlement expenses | 192.9 | 12.7 | 3.0 | 183.2 | ||||||||||||||||||||||
Three months ended March 31, 2022 | ||||||||||||||||||||||||||
Net premiums written and contract deposits(2) | $ | 360.8 | $ | 14.8 | $ | 12.4 | $ | 358.4 | ||||||||||||||||||
Net premiums and contract charges earned | 260.4 | 17.2 | 12.6 | 255.8 | ||||||||||||||||||||||
Benefits, claims and settlement expenses | 181.6 | 7.2 | 0.8 | 175.2 |
($ in thousands) | Gross Amount | Ceded to Other Companies | Assumed from Other Companies | Net Amount | ||||||||||||
Three months ended September 30, 2017 | ||||||||||||||||
Premiums written and contract deposits | $ | 322,428 | $ | 5,189 | $ | 1,116 | $ | 318,355 | ||||||||
Premiums and contract charges earned | 202,988 | 5,216 | 1,163 | 198,935 | ||||||||||||
Benefits, claims and settlement expenses | 135,508 | 1,831 | 1,218 | 134,895 | ||||||||||||
Three months ended September 30, 2016 | ||||||||||||||||
Premiums written and contract deposits | $ | 356,155 | $ | 5,555 | $ | 934 | $ | 351,534 | ||||||||
Premiums and contract charges earned | 195,654 | 5,584 | 980 | 191,050 | ||||||||||||
Benefits, claims and settlement expenses | 139,114 | 4,642 | 1,238 | 135,710 | ||||||||||||
Nine months ended September 30, 2017 | ||||||||||||||||
Premiums written and contract deposits | $ | 940,063 | $ | 16,342 | $ | 2,980 | $ | 926,701 | ||||||||
Premiums and contract charges earned | 603,794 | 16,415 | 2,996 | 590,375 | ||||||||||||
Benefits, claims and settlement expenses | 450,997 | 8,899 | 2,772 | 444,870 | ||||||||||||
Nine months ended September 30, 2016 | ||||||||||||||||
Premiums written and contract deposits | $ | 960,945 | $ | 17,244 | $ | 2,881 | $ | 946,582 | ||||||||
Premiums and contract charges earned | 579,283 | 17,305 | 2,882 | 564,860 | ||||||||||||
Benefits, claims and settlement expenses | 422,352 | 21,748 | 3,027 | 403,631 |
Horace Mann Educators Corporation | 34 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Net premiums and contract charges earned | ||||||||||||||||||||||||||
Property & Casualty | $ | 152.4 | $ | 150.2 | ||||||||||||||||||||||
Life & Retirement | 37.7 | 35.8 | ||||||||||||||||||||||||
Supplemental & Group Benefits | 65.8 | 69.8 | ||||||||||||||||||||||||
Total | $ | 255.9 | $ | 255.8 | ||||||||||||||||||||||
Net investment income | ||||||||||||||||||||||||||
Property & Casualty | $ | 4.0 | $ | 7.2 | ||||||||||||||||||||||
Life & Retirement | 87.9 | 84.2 | ||||||||||||||||||||||||
Supplemental & Group Benefits | 9.1 | 7.1 | ||||||||||||||||||||||||
Corporate & Other | — | — | ||||||||||||||||||||||||
Intersegment eliminations | (0.6) | (0.6) | ||||||||||||||||||||||||
Total | $ | 100.4 | $ | 97.9 | ||||||||||||||||||||||
Net income (loss) | ||||||||||||||||||||||||||
Property & Casualty | $ | (11.6) | $ | 8.5 | ||||||||||||||||||||||
Life & Retirement | 14.0 | 15.6 | ||||||||||||||||||||||||
Supplemental & Group Benefits | 14.0 | 13.2 | ||||||||||||||||||||||||
Corporate & Other | (9.8) | (17.0) | ||||||||||||||||||||||||
Total | $ | 6.6 | $ | 20.3 |
($ in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Assets | ||||||||||||||
Property & Casualty | $ | 1,077.0 | $ | 1,083.8 | ||||||||||
Life & Retirement | 11,085.1 | 10,754.5 | ||||||||||||
Supplemental & Group Benefits | 1,377.1 | 1,359.3 | ||||||||||||
Corporate & Other | 169.0 | 173.4 | ||||||||||||
Intersegment eliminations | (54.3) | (64.9) | ||||||||||||
Total | $ | 13,653.9 | $ | 13,306.1 |
($ in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Insurance premiums and contract charges earned | ||||||||||||||||
Property and Casualty | $ | 163,209 | $ | 155,727 | $ | 481,987 | $ | 461,520 | ||||||||
Retirement | 7,393 | 6,448 | 20,753 | 18,614 | ||||||||||||
Life | 28,333 | 28,875 | 87,635 | 84,726 | ||||||||||||
Total | $ | 198,935 | $ | 191,050 | $ | 590,375 | $ | 564,860 | ||||||||
Net investment income | ||||||||||||||||
Property and Casualty | $ | 9,167 | $ | 10,018 | $ | 26,457 | $ | 28,997 | ||||||||
Retirement | 64,340 | 66,174 | 192,921 | 186,950 | ||||||||||||
Life | 18,999 | 18,852 | 56,215 | 55,338 | ||||||||||||
Corporate and Other | 17 | 15 | 47 | 44 | ||||||||||||
Intersegment eliminations | (203 | ) | (212 | ) | (615 | ) | (644 | ) | ||||||||
Total | $ | 92,320 | $ | 94,847 | $ | 275,025 | $ | 270,685 | ||||||||
Net income (loss) | ||||||||||||||||
Property and Casualty | $ | 13,407 | $ | 6,715 | $ | 2,186 | $ | 16,047 | ||||||||
Retirement | 13,603 | 15,732 | 36,933 | 39,348 | ||||||||||||
Life | 4,788 | 4,583 | 14,283 | 13,072 | ||||||||||||
Corporate and Other | (5,247 | ) | (107 | ) | (9,272 | ) | (4,525 | ) | ||||||||
Total | $ | 26,551 | $ | 26,923 | $ | 44,130 | $ | 63,942 |
($ in thousands) | September 30, 2017 | December 31, 2016 | ||||||
Assets | ||||||||
Property and Casualty | $ | 1,156,959 | $ | 1,110,958 | ||||
Retirement | 7,793,727 | 7,449,777 | ||||||
Life | 1,988,767 | 1,912,771 | ||||||
Corporate and Other | 135,876 | 140,104 | ||||||
Intersegment eliminations | (30,981 | ) | (36,786 | ) | ||||
Total | $ | 11,044,348 | $ | 10,576,824 |
($ in millions) | Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities(1) | Net Reserve Remeasurements Attributable to Discount Rates(1) | Net Funded Status of Benefit Plans(1) | Total(1) | ||||||||||||||||||||||
Beginning balance, January 1, 2023 | $ | (449.6) | $ | 59.0 | $ | (8.8) | $ | (399.4) | ||||||||||||||||||
Other comprehensive loss before reclassifications | 91.3 | (41.2) | — | 50.1 | ||||||||||||||||||||||
Amounts reclassified from AOCI(2) | 1.9 | — | — | 1.9 | ||||||||||||||||||||||
Net current period other comprehensive loss | 93.2 | (41.2) | — | 52.0 | ||||||||||||||||||||||
Ending balance, March 31, 2023 | $ | (356.4) | $ | 17.8 | $ | (8.8) | $ | (347.4) | ||||||||||||||||||
Beginning balance, January 1, 2022 | $ | 347.1 | $ | (386.9) | $ | (10.2) | $ | (50.0) | ||||||||||||||||||
Other comprehensive loss before reclassifications | (335.9) | 181.5 | — | (154.4) | ||||||||||||||||||||||
Amounts reclassified from AOCI(2) | 1.8 | — | — | 1.8 | ||||||||||||||||||||||
Net current period other comprehensive loss | (334.1) | 181.5 | — | (152.6) | ||||||||||||||||||||||
Ending balance, March 31, 2022 | $ | 13.0 | $ | (205.4) | $ | (10.2) | $ | (202.6) |
Horace Mann Educators Corporation | 36 | First Quarter 2023 Form 10-Q |
($ in millions) | ||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||
Cash | $ | 26.6 | $ | 42.2 | ||||||||||
Restricted cash | 0.8 | 0.6 | ||||||||||||
Total cash and restricted cash reported in the Consolidated Balance Sheets | $ | 27.4 | $ | 42.8 |
($ in millions) | Three Months Ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Cash paid (recovered) for: | ||||||||||||||
Interest | $ | 1.2 | $ | 0.6 | ||||||||||
Income taxes | 0.1 | (0.3) |
Horace Mann Educators Corporation | 37 | First Quarter 2023 Form 10-Q |
December 31, 2022 | Effect of the Adoption of ASU 2018-12 | Reclassifications(1) | December 31, 2022 | |||||||||||||||||||||||
As Reported | As Adjusted | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Total investments | $ | 6,587.6 | $ | — | $ | — | $ | 6,587.6 | ||||||||||||||||||
Cash | 42.8 | — | $ | — | 42.8 | |||||||||||||||||||||
Deferred policy acquisition costs | 433.1 | (102.5) | $ | — | 330.6 | |||||||||||||||||||||
Reinsurance balances receivable | 506.2 | (38.2) | — | 468.0 | ||||||||||||||||||||||
Deposit asset on reinsurance | 2,516.6 | — | — | 2,516.6 | ||||||||||||||||||||||
Intangible assets | 185.2 | — | — | 185.2 | ||||||||||||||||||||||
Goodwill | 54.3 | — | — | 54.3 | ||||||||||||||||||||||
Other assets | 328.7 | — | — | 328.7 | ||||||||||||||||||||||
Separate Account variable annuity assets | 2,792.3 | — | — | 2,792.3 | ||||||||||||||||||||||
Total assets | $ | 13,446.8 | $ | (140.7) | $ | — | $ | 13,306.1 | ||||||||||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||
Policy liabilities | ||||||||||||||||||||||||||
Investment contract and policy reserves | $ | 6,968.0 | $ | (151.9) | $ | (6,816.1) | $ | — | ||||||||||||||||||
Future policy benefit reserves | 1,718.0 | 1,718.0 | ||||||||||||||||||||||||
Policyholders' account balances | 5,260.6 | 5,260.6 | ||||||||||||||||||||||||
Unpaid claims and claim expenses | 585.1 | (2.9) | (18.2) | 564.0 | ||||||||||||||||||||||
Unearned premiums | 264.2 | 1.9 | — | 266.1 | ||||||||||||||||||||||
Total policy liabilities | 7,817.3 | (152.9) | 144.3 | 7,808.7 | ||||||||||||||||||||||
Other policyholder funds | 954.0 | (0.4) | (144.3) | 809.3 | ||||||||||||||||||||||
Other liabilities | 297.0 | 2.5 | — | 299.5 | ||||||||||||||||||||||
Short-term debt | 249.0 | — | — | 249.0 | ||||||||||||||||||||||
Long-term debt | 249.0 | — | — | 249.0 | ||||||||||||||||||||||
Separate Account variable annuity liabilities | 2,792.3 | — | — | 2,792.3 | ||||||||||||||||||||||
Total liabilities | 12,358.6 | (150.8) | — | 12,207.8 | ||||||||||||||||||||||
Preferred stock | — | — | — | — | ||||||||||||||||||||||
Common stock | 0.1 | — | — | 0.1 | ||||||||||||||||||||||
Additional paid-in capital | 502.6 | — | — | 502.6 | ||||||||||||||||||||||
Retained earnings | 1,468.6 | 43.8 | — | 1,512.4 | ||||||||||||||||||||||
Accumulated other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
Net unrealized investment losses on fixed maturity securities | (356.9) | (92.7) | — | (449.6) | ||||||||||||||||||||||
Net reserve remeasurements attributable to discount rates | — | 59.0 | — | 59.0 | ||||||||||||||||||||||
Net funded status of benefit plans | (8.8) | — | — | (8.8) | ||||||||||||||||||||||
Treasury stock, at cost | (517.4) | — | — | (517.4) | ||||||||||||||||||||||
Total shareholders’ equity | 1,088.2 | 10.1 | — | 1,098.3 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 13,446.8 | $ | (140.7) | $ | — | $ | 13,306.1 |
Horace Mann Educators Corporation | 38 | First Quarter 2023 Form 10-Q |
Three Months Ended | Effect of the Adoption of ASU 2018-12 | Three Months Ended | ||||||||||||||||||
March 31, 2022 | March 31, 2022 | |||||||||||||||||||
As Reported | As Adjusted | |||||||||||||||||||
Statement of Operations | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Net premiums and contract charges earned | $ | 255.9 | $ | (0.1) | $ | 255.8 | ||||||||||||||
Net investment income | 97.9 | — | 97.9 | |||||||||||||||||
Net investment losses | (15.5) | — | (15.5) | |||||||||||||||||
Other income | 8.5 | — | 8.5 | |||||||||||||||||
Total revenues | 346.8 | (0.1) | 346.7 | |||||||||||||||||
Benefits, losses and expenses | ||||||||||||||||||||
Benefits, claims and settlement expenses | 177.0 | (1.8) | 175.2 | |||||||||||||||||
Interest credited | 40.8 | (1.1) | 39.7 | |||||||||||||||||
Operating expenses | 76.8 | (0.1) | 76.7 | |||||||||||||||||
DAC amortization expense | 26.4 | (4.4) | 22.0 | |||||||||||||||||
Intangible asset amortization expense | 4.2 | — | 4.2 | |||||||||||||||||
Interest expense | 3.9 | — | 3.9 | |||||||||||||||||
Total benefits, losses and expenses | 329.1 | (7.4) | 321.7 | |||||||||||||||||
Income before income taxes | 17.7 | 7.3 | 25.0 | |||||||||||||||||
Income tax expense | 3.2 | 1.5 | 4.7 | |||||||||||||||||
Net income | 14.5 | 5.8 | 20.3 | |||||||||||||||||
Net income per share | ||||||||||||||||||||
Basic | 0.35 | 0.13 | 0.48 | |||||||||||||||||
Diluted | 0.35 | 0.13 | 0.48 | |||||||||||||||||
Weighted average number of shares and equivalent shares | ||||||||||||||||||||
Basic | 41.9 | — | 41.9 | |||||||||||||||||
Diluted | 42.1 | — | 42.1 | |||||||||||||||||
Statement of Comprehensive Income (Loss) | ||||||||||||||||||||
Net income | 14.5 | 5.8 | 20.3 | |||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Change in net unrealized investment losses on fixed maturity securities | (270.7) | (63.4) | (334.1) | |||||||||||||||||
Change in net reserve remeasurements attributable to discount rates | — | 181.5 | 181.5 | |||||||||||||||||
Change in net funded status of benefit plans | — | — | — | |||||||||||||||||
Other comprehensive loss | (270.7) | 118.1 | (152.6) | |||||||||||||||||
Comprehensive income (loss) | $ | (256.2) | $ | 123.9 | $ | (132.3) |
Horace Mann Educators Corporation | 39 | First Quarter 2023 Form 10-Q |
Three Months Ended | Effect of the Adoption of ASU 2018-12 | Three Months Ended | ||||||||||||||||||||||||||||||
March 31, 2022 | March 31, 2022 | |||||||||||||||||||||||||||||||
As Reported | As Adjusted | |||||||||||||||||||||||||||||||
Common stock, $0.001 par value | ||||||||||||||||||||||||||||||||
Ending balance | $ | 0.1 | $ | — | $ | 0.1 | ||||||||||||||||||||||||||
Additional paid-in capital | ||||||||||||||||||||||||||||||||
Ending balance | 496.6 | — | 496.6 | |||||||||||||||||||||||||||||
Retained earnings | ||||||||||||||||||||||||||||||||
Beginning balance | 1,524.9 | 22.1 | 1,547.0 | |||||||||||||||||||||||||||||
Net income | 14.5 | 5.8 | 20.3 | |||||||||||||||||||||||||||||
Effect of ASU 2018-12(1) | — | (0.8) | (0.8) | |||||||||||||||||||||||||||||
Dividends,per share; 2022, $0.32 per share | (13.5) | — | (13.5) | |||||||||||||||||||||||||||||
Ending balance | 1,525.9 | 27.1 | 1,553.0 | |||||||||||||||||||||||||||||
Accumulated other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||||||
Beginning balance | 280.5 | (330.5) | (50.0) | |||||||||||||||||||||||||||||
Change in net unrealized investment losses on fixed maturity securities | (270.7) | (63.4) | (334.1) | |||||||||||||||||||||||||||||
Change in net reserve remeasurements attributable to discount rates | — | 181.5 | 181.5 | |||||||||||||||||||||||||||||
Change in net funded status of benefit plans | — | — | — | |||||||||||||||||||||||||||||
Ending balance | 9.8 | (212.4) | (202.6) | |||||||||||||||||||||||||||||
Treasury stock, at cost | ||||||||||||||||||||||||||||||||
Ending balance | (495.6) | — | (495.6) | |||||||||||||||||||||||||||||
Shareholders' equity at end of period | $ | 1,536.8 | $ | (185.3) | $ | 1,351.5 |
Horace Mann Educators Corporation | 40 | First Quarter 2023 Form 10-Q |
Three Months Ended | Effect of the Adoption of ASU 2018-12 | Three Months Ended | ||||||||||||||||||
March 31, 2022 | March 31, 2022 | |||||||||||||||||||
As Reported | As Adjusted | |||||||||||||||||||
Cash flows - operating activities | ||||||||||||||||||||
Net income | $ | 14.5 | $ | 5.8 | $ | 20.3 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
Net investment losses | 15.5 | — | 15.5 | |||||||||||||||||
Depreciation and intangible asset amortization | 3.8 | — | 3.8 | |||||||||||||||||
Share-based compensation expense | 2.1 | — | 2.1 | |||||||||||||||||
Loss from EMA investments, net of dividends or distributions | 1.6 | — | 1.6 | |||||||||||||||||
Changes in: | ||||||||||||||||||||
Insurance liabilities | 450.5 | (82.8) | 367.7 | |||||||||||||||||
Amounts due under reinsurance agreements | (357.7) | 24.7 | (333.0) | |||||||||||||||||
Income tax liabilities | 3.4 | 51.1 | 54.5 | |||||||||||||||||
Other operating assets and liabilities | (35.5) | (4.6) | (40.1) | |||||||||||||||||
Other, net | (2.5) | 5.8 | 3.3 | |||||||||||||||||
Net cash provided by operating activities | 95.7 | — | 95.7 | |||||||||||||||||
Cash flows - investing activities | ||||||||||||||||||||
Net cash used in investing activities | (217.7) | — | (217.7) | |||||||||||||||||
Cash flows - financing activities | ||||||||||||||||||||
Net cash provided by financing activities | 37.4 | — | 37.4 | |||||||||||||||||
Net decrease in cash | (84.6) | — | (84.6) | |||||||||||||||||
Cash at beginning of period | 133.7 | — | 133.7 | |||||||||||||||||
Cash at end of period | $ | 49.1 | $ | — | $ | 49.1 |
Page | ||||||||
Horace Mann Educators Corporation | 42 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2023-2022 | ||||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | ||||||||||||||||||||||||||||||||||||
Total revenues | $ | 353.9 | $ | 346.7 | 2.1 | % | ||||||||||||||||||||||||||||||||
Net income | 6.6 | 20.3 | -67.5 | % | ||||||||||||||||||||||||||||||||||
Per diluted share: | ||||||||||||||||||||||||||||||||||||||
Net income | 0.16 | 0.48 | -66.7 | % | ||||||||||||||||||||||||||||||||||
Net investment losses, after tax | (0.07) | (0.29) | N.M. | |||||||||||||||||||||||||||||||||||
Book value per share | $ | 27.87 | $ | 32.66 | -14.7 | % | ||||||||||||||||||||||||||||||||
Net income return on equity - last twelve months | 0.5 | % | 9.8 | % | ||||||||||||||||||||||||||||||||||
Net income return on equity - annualized | 2.4 | % | 5.7 | % |
Horace Mann Educators Corporation | 43 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2023-2022 | ||||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | ||||||||||||||||||||||||||||||||||||
Net premiums and contract charges earned | $ | 255.9 | $ | 255.8 | — | % | ||||||||||||||||||||||||||||||||
Net investment income | 100.4 | 97.9 | 2.6 | % | ||||||||||||||||||||||||||||||||||
Net investment losses | (3.9) | (15.5) | N.M. | |||||||||||||||||||||||||||||||||||
Other income | 1.5 | 8.5 | -82.4 | % | ||||||||||||||||||||||||||||||||||
Total revenues | 353.9 | 346.7 | 2.1 | % | ||||||||||||||||||||||||||||||||||
Benefits, claims and settlement expenses | 183.2 | 175.2 | 4.6 | % | ||||||||||||||||||||||||||||||||||
Interest credited | 48.7 | 39.7 | 22.7 | % | ||||||||||||||||||||||||||||||||||
Operating expenses | 79.8 | 76.7 | 4.0 | % | ||||||||||||||||||||||||||||||||||
DAC amortization expense | 23.7 | 22.0 | 7.7 | % | ||||||||||||||||||||||||||||||||||
Intangible asset amortization expense | 3.7 | 4.2 | -11.9 | % | ||||||||||||||||||||||||||||||||||
Interest expense | 6.7 | 3.9 | 71.8 | % | ||||||||||||||||||||||||||||||||||
Total benefits, losses and expenses | 345.8 | 321.7 | 7.5 | % | ||||||||||||||||||||||||||||||||||
Income before income taxes | 8.1 | 25.0 | -67.6 | % | ||||||||||||||||||||||||||||||||||
Income tax expense | 1.5 | 4.7 | -68.1 | % | ||||||||||||||||||||||||||||||||||
Net income | $ | 6.6 | $ | 20.3 | -67.5 | % |
($ in millions) | Three Months Ended September 30, | Change From Prior Year | Nine Months Ended September 30, | Change From Prior Year | ||||||||||||||||||||||||||
2017 | 2016 | Percent | Amount | 2017 | 2016 | Percent | Amount | |||||||||||||||||||||||
Insurance premiums written and contract deposits (includes annuity and life contract deposits) | ||||||||||||||||||||||||||||||
Property and Casualty | $ | 177.2 | $ | 169.8 | 4.4 | % | $ | 7.4 | $ | 498.0 | $ | 476.3 | 4.6 | % | $ | 21.7 | ||||||||||||||
Retirement (annuity) | 114.8 | 154.6 | -25.7 | % | (39.8 | ) | 348.9 | 391.9 | -11.0 | % | (43.0 | ) | ||||||||||||||||||
Life | 26.4 | 27.2 | -2.9 | % | (0.8 | ) | 79.8 | 78.4 | 1.8 | % | 1.4 | |||||||||||||||||||
Total | $ | 318.4 | $ | 351.6 | -9.4 | % | $ | (33.2 | ) | $ | 926.7 | $ | 946.6 | (2.1 | )% | $ | (19.9 | ) | ||||||||||||
Insurance premiums and contract charges earned (excludes annuity and life contract deposits) | ||||||||||||||||||||||||||||||
Property and Casualty | $ | 163.2 | $ | 155.7 | 4.8 | % | $ | 7.5 | $ | 482.0 | $ | 461.5 | 4.4 | % | $ | 20.5 | ||||||||||||||
Retirement (annuity) | 7.5 | 6.4 | 17.2 | % | 1.1 | 20.8 | 18.6 | 11.8 | % | 2.2 | ||||||||||||||||||||
Life | 28.3 | 29.0 | -2.4 | % | (0.7 | ) | 87.6 | 84.8 | 3.3 | % | 2.8 | |||||||||||||||||||
Total | $ | 199.0 | $ | 191.1 | 4.1 | % | $ | 7.9 | $ | 590.4 | $ | 564.9 | 4.5 | % | $ | 25.5 |
September 30, 2017 | December 31, 2016 | September 30, 2016 | ||||
Property and Casualty | ||||||
Automobile | 482,035 | 484,915 | 486,229 | |||
Property | 217,377 | 220,137 | 221,094 | |||
Total | 699,412 | 705,052 | 707,323 | |||
Retirement | 221,309 | 219,105 | 215,445 | |||
Life | 196,978 | 197,937 | 197,792 |
Three Months Ended March 31, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Investment yield, excluding limited partnership interests, pretax - annualized* | 4.7% | 4.3% | ||||||||||||||||||||||||
Investment yield, excluding limited partnership interests, after tax - annualized* | 3.7% | 3.4% |
Horace Mann Educators Corporation | 44 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Credit loss and intent-to-sell impairments | $ | — | $ | (1.8) | ||||||||||||||||||||||
Sales and other, net | (2.4) | 1.1 | ||||||||||||||||||||||||
Change in fair value - equity securities | (1.0) | (17.1) | ||||||||||||||||||||||||
Change in fair value and losses realized on settlements - derivatives | (0.5) | 2.3 | ||||||||||||||||||||||||
Net investment losses | $ | (3.9) | $ | (15.5) |
($ in millions) | September 30, 2017 | ||||||||||||||
Number of Issuers | Fair Value | Amortized Cost or Cost | Pretax Net Unrealized Investment Gain (Loss) | ||||||||||||
Fixed maturity securities | |||||||||||||||
Corporate bonds | |||||||||||||||
Banking & Finance | 119 | $ | 704.4 | $ | 661.9 | $ | 42.5 | ||||||||
Insurance | 56 | 284.5 | 255.4 | 29.1 | |||||||||||
Energy (1) | 58 | 232.7 | 217.8 | 14.9 | |||||||||||
Real Estate | 42 | 184.6 | 175.8 | 8.8 | |||||||||||
Technology | 34 | 180.6 | 172.0 | 8.6 | |||||||||||
HealthCare, Pharmacy | 51 | 163.1 | 152.3 | 10.8 | |||||||||||
Utilities | 42 | 153.8 | 134.5 | 19.3 | |||||||||||
Transportation | 37 | 150.2 | 142.8 | 7.4 | |||||||||||
Telecommunications | 26 | 110.9 | 102.6 | 8.3 | |||||||||||
Food and Beverage | 23 | 91.1 | 87.2 | 3.9 | |||||||||||
All other corporates (2) | 215 | 565.8 | 533.0 | 32.8 | |||||||||||
Total corporate bonds | 703 | 2,821.7 | 2,635.3 | 186.4 | |||||||||||
Mortgage-backed securities | |||||||||||||||
U.S. Government and federally sponsored agencies | 229 | 420.4 | 391.4 | 29.0 | |||||||||||
Commercial (3) | 125 | 535.1 | 531.4 | 3.7 | |||||||||||
Other | 28 | 70.1 | 69.0 | 1.1 | |||||||||||
Municipal bonds (4) | 378 | 1,842.2 | 1,669.3 | 172.9 | |||||||||||
Government bonds | |||||||||||||||
U.S. | 38 | 671.0 | 653.2 | 17.8 | |||||||||||
Foreign | 15 | 100.2 | 93.8 | 6.4 | |||||||||||
Collateralized debt obligations (5) | 87 | 522.4 | 517.4 | 5.0 | |||||||||||
Asset-backed securities | 101 | 647.5 | 633.6 | 13.9 | |||||||||||
Total fixed maturity securities | 1,704 | $ | 7,630.6 | $ | 7,194.4 | $ | 436.2 | ||||||||
Equity securities | |||||||||||||||
Non-redeemable preferred stocks | 14 | $ | 64.0 | $ | 61.5 | $ | 2.5 | ||||||||
Common stocks | 198 | 74.7 | 58.7 | 16.0 | |||||||||||
Closed-end fund | 1 | 20.6 | 20.0 | 0.6 | |||||||||||
Total equity securities | 213 | $ | 159.3 | $ | 140.2 | $ | 19.1 | ||||||||
Total | 1,917 | $ | 7,789.9 | $ | 7,334.6 | $ | 455.3 |
($ in millions) | Percent of Portfolio | |||||||||||||
Fair Value | September 30, 2017 | |||||||||||||
December 31, 2016 | September 30, 2017 | Fair Value | Amortized Cost or Cost | |||||||||||
Fixed maturity securities | ||||||||||||||
AAA | 8.3 | % | 7.4 | % | $ | 563.1 | $ | 544.6 | ||||||
AA (2) | 35.5 | 37.3 | 2,843.3 | 2,690.2 | ||||||||||
A | 23.6 | 24.2 | 1,845.0 | 1,714.8 | ||||||||||
BBB | 28.4 | 27.1 | 2,071.9 | 1,951.0 | ||||||||||
BB | 2.4 | 2.4 | 187.0 | 181.5 | ||||||||||
B | 1.0 | 0.8 | 64.3 | 63.1 | ||||||||||
CCC or lower | 0.2 | 0.1 | 4.9 | 4.9 | ||||||||||
Not rated (3) | 0.6 | 0.7 | 51.1 | 44.3 | ||||||||||
Total fixed maturity securities | 100.0 | % | 100.0 | % | $ | 7,630.6 | $ | 7,194.4 | ||||||
Equity securities | ||||||||||||||
AAA | — | — | — | — | ||||||||||
AA | — | — | — | — | ||||||||||
A | — | — | — | — | ||||||||||
BBB | 35.3 | % | 40.2 | % | $ | 64.0 | $ | 61.5 | ||||||
BB | — | — | — | — | ||||||||||
B | — | — | — | — | ||||||||||
CCC or lower | — | — | — | — | ||||||||||
Not rated | 64.7 | 59.8 | 95.3 | 78.7 | ||||||||||
Total equity securities | 100.0 | % | 100.0 | % | $ | 159.3 | $ | 140.2 | ||||||
Total | $ | 7,789.9 | $ | 7,334.6 |
($ in millions) | Three Months Ended September 30, | Change From Prior Year | Nine Months Ended September 30, | Change From Prior Year | ||||||||||||||||||||||||||
2017 | 2016 | Percent | Amount | 2017 | 2016 | Percent | Amount | |||||||||||||||||||||||
Property and Casualty | $ | 114.9 | $ | 116.0 | -0.9 | % | $ | (1.1 | ) | $ | 384.9 | $ | 347.0 | 10.9 | % | $ | 37.9 | |||||||||||||
Retirement | 1.6 | 1.4 | 14.3 | % | 0.2 | 4.0 | 3.1 | 29.0 | % | 0.9 | ||||||||||||||||||||
Life | 18.4 | 18.3 | 0.5 | % | 0.1 | 56.0 | 53.5 | 4.7 | % | 2.5 | ||||||||||||||||||||
Total | $ | 134.9 | $ | 135.7 | -0.6 | % | $ | (0.8 | ) | $ | 444.9 | $ | 403.6 | 10.2 | % | $ | 41.3 | |||||||||||||
Property and Casualty catastrophe losses, included above | $ | 8.6 | $ | 8.4 | 2.4 | % | $ | 0.2 | $ | 58.2 | $ | 48.4 | 20.2 | % | $ | 9.8 |
($ in millions) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Incurred claims and claim expenses: | ||||||||||||||||
Claims occurring in the current year | $ | 115.4 | $ | 116.7 | $ | 387.0 | $ | 351.3 | ||||||||
Decrease in estimated reserves for claims occurring in prior years (2) | (0.5 | ) | (0.7 | ) | (2.1 | ) | (4.3 | ) | ||||||||
Total claims and claim expenses incurred | $ | 114.9 | $ | 116.0 | $ | 384.9 | $ | 347.0 | ||||||||
Property and Casualty loss ratio: | ||||||||||||||||
Total | 70.4 | % | 74.5 | % | 79.8 | % | 75.2 | % | ||||||||
Effect of catastrophe costs, included above (1) | 5.3 | % | 5.3 | % | 12.0 | % | 10.5 | % | ||||||||
Effect of prior years’ reserve development, included above (2) | -0.3 | % | -0.4 | % | -0.4 | % | -0.9 | % |
(1) Property and Casualty catastrophe losses were incurred as follows: | ||||||||
2017 | 2016 | |||||||
Three months ended | ||||||||
March 31 | $ | 17.2 | $ | 12.7 | ||||
June 30 | 32.4 | 27.3 | ||||||
September 30 | 8.6 | 8.4 | ||||||
Total year-to-date | $ | 58.2 | $ | 48.4 | ||||
(2) Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous years to reflect subsequent information on such claims and changes in their projected final settlement costs. | ||||||||
2017 | 2016 | |||||||
Three months ended | ||||||||
March 31 | $ | (1.0 | ) | $ | (2.0 | ) | ||
June 30 | (0.6 | ) | (1.6 | ) | ||||
September 30 | (0.5 | ) | (0.7 | ) | ||||
Total year-to-date | $ | (2.1 | ) | $ | (4.3 | ) |
($ in millions) | Three Months Ended September 30, | Change From Prior Year | Nine Months Ended September 30, | Change From Prior Year | ||||||||||||||||||||||||||
2017 | 2016 | Percent | Amount | 2017 | 2016 | Percent | Amount | |||||||||||||||||||||||
Retirement (annuity) | $ | 38.8 | $ | 37.4 | 3.7 | % | $ | 1.4 | $ | 114.4 | $ | 109.4 | 4.6 | % | $ | 5.0 | ||||||||||||||
Life | 11.3 | 11.2 | 0.9 | % | 0.1 | 33.8 | 33.5 | 0.9 | % | 0.3 | ||||||||||||||||||||
Total | $ | 50.1 | $ | 48.6 | 3.1 | % | $ | 1.5 | $ | 148.2 | $ | 142.9 | 3.7 | % | $ | 5.3 |
($ in millions) | September 30, 2017 | ||||||||||||||||
Deferred Annuities at | |||||||||||||||||
Total Deferred Annuities | Minimum Guaranteed Rate | ||||||||||||||||
Percent of Total | Accumulated Value (“AV”) | Percent of Total Deferred Annuities AV | Percent of Total | Accumulated Value | |||||||||||||
Minimum guaranteed interest rates: | |||||||||||||||||
Less than 2% | 24.9 | % | $ | 1,083.8 | 51.3 | % | 14.7 | % | $ | 556.5 | |||||||
Equal to 2% but less than 3% | 7.1 | 307.4 | 83.0 | % | 6.8 | 255.1 | |||||||||||
Equal to 3% but less than 4% | 14.1 | 614.0 | 99.9 | % | 16.3 | 613.4 | |||||||||||
Equal to 4% but less than 5% | 52.6 | 2,288.7 | 100.0 | % | 60.7 | 2,288.7 | |||||||||||
5% or higher | 1.3 | 55.4 | 100.0 | % | 1.5 | 55.4 | |||||||||||
Total | 100.0 | % | $ | 4,349.3 | 86.7 | % | 100.0 | % | $ | 3,769.1 |
Horace Mann Educators Corporation | 45 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended September 30, | Change From Prior Year | Nine Months Ended September 30, | Change From Prior Year | ||||||||||||||||||||||||||
2017 | 2016 | Percent | Amount | 2017 | 2016 | Percent | Amount | |||||||||||||||||||||||
Analysis of net income (loss) by segment: | ||||||||||||||||||||||||||||||
Property and Casualty | $ | 13.4 | $ | 6.7 | 100.0 | % | $ | 6.7 | $ | 2.2 | $ | 16.0 | -86.3 | % | $ | (13.8 | ) | |||||||||||||
Retirement | 13.6 | 15.7 | -13.4 | % | (2.1 | ) | 36.9 | 39.3 | -6.1 | % | (2.4 | ) | ||||||||||||||||||
Life | 4.8 | 4.6 | 4.3 | % | 0.2 | 14.3 | 13.1 | 9.2 | % | 1.2 | ||||||||||||||||||||
Corporate and Other (1) | (5.3 | ) | (0.1 | ) | N.M. | (5.2 | ) | (9.3 | ) | (4.5 | ) | 106.7 | % | (4.8 | ) | |||||||||||||||
Net income | $ | 26.5 | $ | 26.9 | -1.5 | % | $ | (0.4 | ) | $ | 44.1 | $ | 63.9 | -31.0 | % | $ | (19.8 | ) | ||||||||||||
Effect of catastrophe costs, after tax, included above | $ | (5.6 | ) | $ | (5.5 | ) | 1.8 | % | $ | (0.1 | ) | $ | (37.8 | ) | $ | (31.5 | ) | 20.0 | % | $ | (6.3 | ) | ||||||||
Effect of net realized investment gains (losses), after tax, included above | $ | (2.2 | ) | $ | 2.7 | N.M. | $ | (4.9 | ) | $ | (0.8 | ) | $ | 3.8 | -121.1 | % | $ | (4.6 | ) | |||||||||||
Diluted: | ||||||||||||||||||||||||||||||
Net income per share | $ | 0.64 | $ | 0.65 | -1.5 | % | $ | (0.01 | ) | $ | 1.06 | $ | 1.55 | -31.6 | % | $ | (0.49 | ) | ||||||||||||
Weighted average number of common and common equivalent shares (in millions) | 41.6 | 41.3 | 0.7 | % | 0.3 | 41.5 | 41.4 | 0.2 | % | 0.1 | ||||||||||||||||||||
Property and casualty combined ratio: | ||||||||||||||||||||||||||||||
Total | 95.8 | % | 101.5 | % | - | -5.7 pts | 106.5 | % | 102.4 | % | - | 4.1 pts | ||||||||||||||||||
Effect of catastrophe costs, included above | 5.3 | % | 5.3 | % | - | 0 pts | 12.0 | % | 10.5 | % | - | 1.5 pts | ||||||||||||||||||
Effect of prior years’ reserve development, included above | -0.3 | % | -0.4 | % | - | 0.1 pts | -0.4 | % | -0.9 | % | - | 0.5 pts |
Horace Mann Educators Corporation | 46 | First Quarter 2023 Form 10-Q |
Horace Mann Educators Corporation | 47 | First Quarter 2023 Form 10-Q |
Horace Mann Educators Corporation | 48 | First Quarter 2023 Form 10-Q |
($ in millions, unless otherwise indicated) | Three Months Ended March 31, | 2023-2022 | ||||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | ||||||||||||||||||||||||||||||||||||
Financial Data: | ||||||||||||||||||||||||||||||||||||||
Net premiums written*: | ||||||||||||||||||||||||||||||||||||||
Auto | $ | 101.2 | $ | 94.5 | 7.1 | % | ||||||||||||||||||||||||||||||||
Property and other | 47.9 | 45.1 | 6.2 | % | ||||||||||||||||||||||||||||||||||
Total net premiums written | 149.1 | 139.6 | 6.8 | % | ||||||||||||||||||||||||||||||||||
Change in unearned net premiums | 3.3 | 10.6 | -68.9 | % | ||||||||||||||||||||||||||||||||||
Total net premiums earned | 152.4 | 150.2 | 1.5 | % | ||||||||||||||||||||||||||||||||||
Incurred claims and claims expenses: | ||||||||||||||||||||||||||||||||||||||
Claims occurring in the current year | 128.8 | 108.3 | 18.9 | % | ||||||||||||||||||||||||||||||||||
Prior years' reserve development(1) | — | — | — | % | ||||||||||||||||||||||||||||||||||
Total claims and claim expenses incurred | 128.8 | 108.3 | 18.9 | % | ||||||||||||||||||||||||||||||||||
Operating expenses, including DAC amortization | 42.9 | 39.4 | 8.9 | % | ||||||||||||||||||||||||||||||||||
Underwriting gain (loss) | (19.3) | 2.5 | N.M. | |||||||||||||||||||||||||||||||||||
Net investment income | 4.0 | 7.2 | -44.4 | % | ||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | (14.6) | 10.5 | N.M | |||||||||||||||||||||||||||||||||||
Net income (loss) | (11.6) | 8.5 | N.M | |||||||||||||||||||||||||||||||||||
Core earnings (loss)* | (11.6) | 8.5 | N.M | |||||||||||||||||||||||||||||||||||
Operating Statistics: | ||||||||||||||||||||||||||||||||||||||
Auto | ||||||||||||||||||||||||||||||||||||||
Loss and loss adjustment expense ratio | 82.5 | % | 76.0 | % | 6.5 | pts | ||||||||||||||||||||||||||||||||
Expense ratio | 28.4 | % | 25.8 | % | 2.6 | pts | ||||||||||||||||||||||||||||||||
Combined ratio: | 110.9 | % | 101.8 | % | 9.1 | pts | ||||||||||||||||||||||||||||||||
Prior years' reserve development(1) | — | % | — | % | — | pts | ||||||||||||||||||||||||||||||||
Catastrophe losses | 1.8 | % | 0.5 | % | 1.3 | pts | ||||||||||||||||||||||||||||||||
Underlying combined ratio* | 109.1 | % | 101.3 | % | 7.8 | pts | ||||||||||||||||||||||||||||||||
Property | ||||||||||||||||||||||||||||||||||||||
Loss and loss adjustment expense ratio | 88.1 | % | 65.0 | % | 23.1 | pts | ||||||||||||||||||||||||||||||||
Expense ratio | 27.7 | % | 27.3 | % | 0.4 | pts | ||||||||||||||||||||||||||||||||
Combined ratio: | 115.8 | % | 92.3 | % | 23.5 | pts | ||||||||||||||||||||||||||||||||
Prior years' reserve development(1) | — | % | — | % | — | pts | ||||||||||||||||||||||||||||||||
Catastrophe losses | 37.9 | % | 12.7 | % | 25.2 | pts | ||||||||||||||||||||||||||||||||
Underlying combined ratio* | 77.9 | % | 79.6 | % | -1.7 | pts | ||||||||||||||||||||||||||||||||
Risks in force (in thousands) | ||||||||||||||||||||||||||||||||||||||
Auto(2) | 365 | 372 | -1.9 | % | ||||||||||||||||||||||||||||||||||
Property | 170 | 175 | -2.9 | % | ||||||||||||||||||||||||||||||||||
Total | 535 | 547 | -2.2 | % |
Horace Mann Educators Corporation | 49 | First Quarter 2023 Form 10-Q |
Horace Mann Educators Corporation | 50 | First Quarter 2023 Form 10-Q |
Horace Mann Educators Corporation | 51 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2023-2022 | ||||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | ||||||||||||||||||||||||||||||||||||
Life & Retirement | ||||||||||||||||||||||||||||||||||||||
Net premiums written and contract deposits* | $ | 136.1 | $ | 136.4 | -0.2 | % | ||||||||||||||||||||||||||||||||
Net premiums and contract charges earned | 37.7 | 35.8 | 5.3 | % | ||||||||||||||||||||||||||||||||||
Net investment income | 87.9 | 84.2 | 4.4 | % | ||||||||||||||||||||||||||||||||||
Other income | 3.9 | 4.9 | -20.4 | % | ||||||||||||||||||||||||||||||||||
Life mortality costs | 19.5 | 21.4 | -8.9 | % | ||||||||||||||||||||||||||||||||||
Interest credited | 47.9 | 39.6 | 21.0 | % | ||||||||||||||||||||||||||||||||||
Change in reserves | 13.8 | 13.0 | 6.2 | % | ||||||||||||||||||||||||||||||||||
Operating expenses | 24.2 | 25.7 | -5.8 | % | ||||||||||||||||||||||||||||||||||
DAC amortization expense | 6.8 | 5.7 | 19.3 | % | ||||||||||||||||||||||||||||||||||
Intangible asset amortization expense | 0.1 | 0.3 | -66.7 | % | ||||||||||||||||||||||||||||||||||
Income before income taxes | 17.2 | 19.2 | -10.4 | % | ||||||||||||||||||||||||||||||||||
Income tax expense | 3.2 | 3.6 | -11.1 | % | ||||||||||||||||||||||||||||||||||
Net income | 14.0 | 15.6 | -10.3 | % | ||||||||||||||||||||||||||||||||||
Core earnings* | 14.0 | 15.6 | -10.3 | % | ||||||||||||||||||||||||||||||||||
Life policies in force (in thousands) | 162 | 163 | -0.6 | % | ||||||||||||||||||||||||||||||||||
Life insurance in force | $ | 20,155 | $ | 19,595 | 2.9 | % | ||||||||||||||||||||||||||||||||
Life persistency - LTM | 95.9 | % | 96.2 | % | -0.3 | pts | ||||||||||||||||||||||||||||||||
Annuity contracts in force (in thousands) | 226 | 229 | -1.3 | % | ||||||||||||||||||||||||||||||||||
Horace Mann Retirement Advantage® contracts in force (in thousands) | 17 | 16 | 6.3 | % | ||||||||||||||||||||||||||||||||||
Cash value persistency - LTM | 93.1 | % | 94.3 | % | -1.2 | pts |
Horace Mann Educators Corporation | 52 | First Quarter 2023 Form 10-Q |
($ in millions) | March 31, 2023 | |||||||||||||||||||||||||||||||
Total Deferred Annuities | Deferred Annuities at Minimum Guaranteed Rate | |||||||||||||||||||||||||||||||
Percent of Total | Accumulated Value (AV) | Percent of Total Deferred Annuities AV | Percent of Total | Accumulated Value | ||||||||||||||||||||||||||||
Guaranteed minimum crediting rates: | ||||||||||||||||||||||||||||||||
Less than 2% | 57.0 | % | $ | 1,432.3 | 40.7 | % | 37.0 | % | $ | 583.0 | ||||||||||||||||||||||
Equal to 2% but less than 3% | 10.9 | 272.9 | 69.1 | 12.0 | 188.5 | |||||||||||||||||||||||||||
Equal to 3% but less than 4% | 23.8 | 597.4 | 99.9 | 37.8 | 596.9 | |||||||||||||||||||||||||||
Equal to 4% but less than 5% | 6.4 | 161.9 | 100.0 | 10.2 | 161.9 | |||||||||||||||||||||||||||
5% or higher | 1.9 | 46.6 | 100.0 | 3.0 | 46.6 | |||||||||||||||||||||||||||
Total | 100.0 | % | $ | 2,511.1 | 62.8 | % | 100.0 | % | $ | 1,576.9 |
Horace Mann Educators Corporation | 53 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2023-2022 | ||||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | ||||||||||||||||||||||||||||||||||||
Supplemental & Group Benefits | ||||||||||||||||||||||||||||||||||||||
Net premiums and contract charges earned | $ | 65.8 | $ | 69.8 | -5.7 | % | ||||||||||||||||||||||||||||||||
Net investment income | 9.1 | 7.1 | 28.2 | % | ||||||||||||||||||||||||||||||||||
Other income | (3.7) | 1.6 | N.M. | |||||||||||||||||||||||||||||||||||
Benefits, settlement expenses and change in reserves | 21.1 | 32.5 | -35.1 | % | ||||||||||||||||||||||||||||||||||
Interest credited | 0.8 | 0.1 | N.M. | |||||||||||||||||||||||||||||||||||
Operating expenses (includes DAC amortization expense) | 27.9 | 25.3 | 10.3 | % | ||||||||||||||||||||||||||||||||||
Intangible asset amortization expense | 3.6 | 3.9 | -7.7 | % | ||||||||||||||||||||||||||||||||||
Income before income taxes | 17.8 | 16.7 | 6.6 | % | ||||||||||||||||||||||||||||||||||
Net income | 14.0 | 13.2 | 6.1 | % | ||||||||||||||||||||||||||||||||||
Core earnings* | 14.0 | 13.2 | 6.1 | % | ||||||||||||||||||||||||||||||||||
Benefit ratio(1) | 33.3 | % | 46.7 | % | -13.4 | pts | ||||||||||||||||||||||||||||||||
Operating expense ratio(2) | 39.2 | % | 32.2 | % | 7.0 | pts | ||||||||||||||||||||||||||||||||
Pretax profit margin(3) | 24.9 | % | 21.4 | % | 3.5 | pts | ||||||||||||||||||||||||||||||||
Worksite direct products benefit ratio | 22.1 | % | 22.2 | % | -0.1 | pts | ||||||||||||||||||||||||||||||||
Worksite direct premium persistency (rolling 12 months) | 90.6 | % | 92.1 | % | -1.5 | pts | ||||||||||||||||||||||||||||||||
Employer-sponsored products benefit ratio | 42.6 | % | 66.1 | % | -23.5 | pts |
Horace Mann Educators Corporation | 54 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2023-2022 | ||||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | ||||||||||||||||||||||||||||||||||||
Interest expense | $ | (6.7) | $ | (3.9) | -71.8 | % | ||||||||||||||||||||||||||||||||
Net investment losses, pretax | (3.9) | (15.5) | N.M. | |||||||||||||||||||||||||||||||||||
Other operating expenses, net investment income and other income | (1.7) | (2.0) | 15.0 | % | ||||||||||||||||||||||||||||||||||
Net investment losses, after tax | (3.1) | (12.2) | N.M. | |||||||||||||||||||||||||||||||||||
Net loss | (9.8) | (17.0) | 42.4 | % | ||||||||||||||||||||||||||||||||||
Core loss* | (6.7) | (4.8) | -39.6 | % |
($ in millions) | Three Months Ended March 31, | 2023-2022 | ||||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | ||||||||||||||||||||||||||||||||||||
Net investment income - managed investment portfolio | $ | 74.7 | $ | 73.0 | 2.3 | % | ||||||||||||||||||||||||||||||||
Investment income - deposit asset on reinsurance | 25.7 | 24.9 | 3.2 | % | ||||||||||||||||||||||||||||||||||
Total net investment income | 100.4 | 97.9 | 2.6 | % | ||||||||||||||||||||||||||||||||||
Pretax net investment losses | (3.9) | (15.5) | N.M. | |||||||||||||||||||||||||||||||||||
Pretax net unrealized investment gains (losses) on fixed maturity securities | (453.3) | 16.7 | N.M |
Horace Mann Educators Corporation | 55 | First Quarter 2023 Form 10-Q |
($ in millions) | March 31, 2023 | |||||||||||||||||||||||||
Number of Issuers | Fair Value | Amortized Cost, net | Pretax Net Unrealized Loss | |||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Banking & Finance | 169 | $ | 471.8 | $ | 523.0 | $ | (51.2) | |||||||||||||||||||
Misc. | 36 | 184.1 | 185.3 | (1.2) | ||||||||||||||||||||||
Insurance | 57 | 157.3 | 170.2 | (12.9) | ||||||||||||||||||||||
Energy | 86 | 144.3 | 158.4 | (14.1) | ||||||||||||||||||||||
HealthCare, Pharmacy | 73 | 116.6 | 137.5 | (20.9) | ||||||||||||||||||||||
Utilities | 78 | 114.9 | 132.5 | (17.6) | ||||||||||||||||||||||
Real Estate | 42 | 97.9 | 107.6 | (9.7) | ||||||||||||||||||||||
Transportation | 47 | 86.5 | 95.6 | (9.1) | ||||||||||||||||||||||
Consumer Products | 54 | 69.5 | 83.6 | (14.1) | ||||||||||||||||||||||
Natural Gas | 15 | 52.9 | 59.1 | (6.2) | ||||||||||||||||||||||
All other corporates(1) | 295 | 447.8 | 502.5 | (54.7) | ||||||||||||||||||||||
Total corporate bonds | 952 | 1,943.6 | 2,155.3 | (211.7) | ||||||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||||||||
U.S. Government and federally sponsored agencies | 239 | 375.0 | 412.5 | (37.5) | ||||||||||||||||||||||
Commercial(2) | 164 | 302.9 | 327.9 | (25.0) | ||||||||||||||||||||||
Other | 29 | 14.0 | 15.1 | (1.1) | ||||||||||||||||||||||
Municipal bonds(3) | 605 | 1,290.9 | 1,363.0 | (72.1) | ||||||||||||||||||||||
Government bonds | ||||||||||||||||||||||||||
U.S. | 44 | 367.4 | 428.2 | (60.8) | ||||||||||||||||||||||
Foreign | 5 | 32.6 | 34.2 | (1.6) | ||||||||||||||||||||||
Collateralized loan obligations(4) | 252 | 741.2 | 764.5 | (23.3) | ||||||||||||||||||||||
Asset-backed securities | 128 | 282.4 | 302.6 | (20.2) | ||||||||||||||||||||||
Total fixed maturity securities | 2,418 | $ | 5,350.0 | $ | 5,803.3 | $ | (453.3) | |||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Non-redeemable preferred stocks | 26 | $ | 80.4 | |||||||||||||||||||||||
Common stocks | 6 | 1.0 | ||||||||||||||||||||||||
Closed-end fund | 1 | 17.4 | ||||||||||||||||||||||||
Total equity securities | 33 | $ | 98.8 | |||||||||||||||||||||||
Total | 2,451 | $ | 5,448.8 |
Horace Mann Educators Corporation | 56 | First Quarter 2023 Form 10-Q |
($ in millions) | Percent of Portfolio Fair Value | March 31, 2023 | ||||||||||||||||||||||||
December 31, 2022 | March 31, 2023 | Fair Value | Amortized Cost, net | |||||||||||||||||||||||
Fixed maturity securities | ||||||||||||||||||||||||||
AAA | 10.8 | % | 11.3 | % | $ | 605.2 | $ | 634.4 | ||||||||||||||||||
AA(2) | 39.3 | 39.1 | 2,093.6 | 2,303.7 | ||||||||||||||||||||||
A | 17.8 | 18.2 | 975.3 | 1,038.1 | ||||||||||||||||||||||
BBB | 24.1 | 23.6 | 1,266.6 | 1,393.2 | ||||||||||||||||||||||
BB | 1.8 | 1.8 | 95.1 | 104.3 | ||||||||||||||||||||||
B | 0.9 | 0.9 | 47.8 | 52.0 | ||||||||||||||||||||||
CCC or lower | — | — | 1.1 | 1.7 | ||||||||||||||||||||||
Not rated(3) | 5.3 | 5.1 | 265.3 | 275.9 | ||||||||||||||||||||||
Total fixed maturity securities | 100.0 | % | 100.0 | % | $ | 5,350.0 | $ | 5,803.3 | ||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
AAA | — | % | — | % | ||||||||||||||||||||||
AA | — | — | — | |||||||||||||||||||||||
A | — | — | — | |||||||||||||||||||||||
BBB | 68.7 | 65.4 | 64.6 | |||||||||||||||||||||||
BB | 10.8 | 10.9 | 10.8 | |||||||||||||||||||||||
B | — | — | — | |||||||||||||||||||||||
CCC or lower | — | 2.1 | 2.1 | |||||||||||||||||||||||
Not rated | 20.5 | 21.6 | 21.3 | |||||||||||||||||||||||
Total equity securities | 100.0 | % | 100.0 | % | $ | 98.8 | ||||||||||||||||||||
Total | $ | 5,448.8 |
Horace Mann Educators Corporation | 57 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2023-2022 | ||||||||||||||||||
2023 | 2022 | % Change | ||||||||||||||||||
Net cash provided by operating activities | $ | 86.4 | $ | 95.7 | -9.7 | % | ||||||||||||||
Net cash used in investing activities | (95.3) | (217.7) | 56.2 | % | ||||||||||||||||
Net cash provided by (used in) financing activities | (6.5) | 37.4 | -117.4 | % | ||||||||||||||||
Net decrease in cash | (15.4) | (84.6) | 81.8 | % | ||||||||||||||||
Cash at beginning of period | 42.8 | 133.7 | -68.0 | % | ||||||||||||||||
Cash at end of period | $ | 27.4 | $ | 49.1 | -44.2 | % |
Horace Mann Educators Corporation | 58 | First Quarter 2023 Form 10-Q |
($ in millions) | Three Months Ended March 31, | 2023-2022 | 2023-2022 | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||||||||||||||
Balance at beginning of the period | $ | 792.5 | $ | 782.5 | $ | 10.0 | 1.3 | % | ||||||||||||||||||
Advances received from FHLB funding agreements | 162.0 | 60.0 | 102.0 | N.M. | ||||||||||||||||||||||
Principal repayments on FHLB funding agreements | (85.0) | — | (85.0) | N.M. | ||||||||||||||||||||||
Balance at end of the period | $ | 869.5 | $ | 842.5 | $ | 27.0 | 3.2 | % |
Horace Mann Educators Corporation | 59 | First Quarter 2023 Form 10-Q |
Property & Casualty | Life & Retirement | Supplemental & Group Benefits | Corporate & Other | |||||||||||||||||||||||
Activities for potential sources of funds | ||||||||||||||||||||||||||
Receipt of insurance premiums, contractholder charges and fees | ☑ | ☑ | ☑ | |||||||||||||||||||||||
Recurring service fees, commissions and overrides | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Contractholder fund deposits | ☑ | ☑ | ||||||||||||||||||||||||
Reinsurance and indemnification program recoveries | ☑ | ☑ | ☑ | |||||||||||||||||||||||
Receipts of principal, interest and dividends on investments | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Proceeds from sales of investments | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Proceeds from FHLB borrowing and funding agreements | ☑ | ☑ | ☑ | |||||||||||||||||||||||
Proceeds from reverse repurchase agreements | ☑ | ☑ | ☑ | |||||||||||||||||||||||
Intercompany loans | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Capital contributions from parent | ☑ | ☑ | ☑ | |||||||||||||||||||||||
Dividends or return of capital from subsidiaries | ☑ | |||||||||||||||||||||||||
Tax refunds/settlements | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Proceeds from periodic issuance of additional securities | ☑ | |||||||||||||||||||||||||
Proceeds from debt issuances | ☑ | |||||||||||||||||||||||||
Proceeds from revolving credit facility | ☑ | |||||||||||||||||||||||||
Receipt of intercompany settlements related to employee benefit plans | ☑ | |||||||||||||||||||||||||
Activities for potential uses of funds | ||||||||||||||||||||||||||
Payment of claims and related expenses | ☑ | ☑ | ☑ | |||||||||||||||||||||||
Payment of contract benefits, surrenders and withdrawals | ☑ | ☑ | ||||||||||||||||||||||||
Reinsurance cessions and indemnification program payments | ☑ | ☑ | ☑ | |||||||||||||||||||||||
Payment of operating costs and expenses | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Payments to purchase investments | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Repayment of FHLB borrowing and funding agreements | ☑ | ☑ | ☑ | |||||||||||||||||||||||
Repayment of reverse repurchase agreements | ☑ | ☑ | ☑ | |||||||||||||||||||||||
Payment or repayment of intercompany loans | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Capital contributions to subsidiaries | ☑ | |||||||||||||||||||||||||
Dividends or return of capital to shareholders/parent company | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Tax payments/settlements | ☑ | ☑ | ☑ | ☑ | ||||||||||||||||||||||
Common share repurchases | ☑ | |||||||||||||||||||||||||
Debt service expenses and repayments | ☑ | |||||||||||||||||||||||||
Repayment on revolving credit facility | ☑ | |||||||||||||||||||||||||
Payments related to employee benefit plans | ☑ | |||||||||||||||||||||||||
Payments for business acquisitions | ☑ |
Horace Mann Educators Corporation | 60 | First Quarter 2023 Form 10-Q |
Horace Mann Educators Corporation | 61 | First Quarter 2023 Form 10-Q |
($ in millions) | Interest Rates | Final Maturity | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
Short-term debt | ||||||||||||||||||||||||||
Revolving Credit Facility | Variable | 2026 | $ | 249.0 | $ | 249.0 | ||||||||||||||||||||
Long-term debt(1) | ||||||||||||||||||||||||||
4.50% Senior Notes, Aggregate principal amount of $250.0 less unaccrued discount of $0.2 and $0.3 and unamortized debt issuance costs of $0.8 and $1.1 | 4.50% | 2025 | 249.0 | 248.6 | ||||||||||||||||||||||
Total | $ | 498.0 | $ | 497.6 |
Horace Mann Educators Corporation | 62 | First Quarter 2023 Form 10-Q |
Insurance Financial | Affirmed/ | |||||||||||||||||||||||||||||||
Strength Ratings (Outlook) | Debt Ratings (Outlook) | Reviewed | ||||||||||||||||||||||||||||||
A.M. Best | ||||||||||||||||||||||||||||||||
HMEC (parent company) | N.A. | bbb | (stable) | 7/28/2022 | ||||||||||||||||||||||||||||
HMEC's Life & Retirement subsidiaries | A | (stable) | N.A. | 7/28/2022 | ||||||||||||||||||||||||||||
HMEC's Property & Casualty subsidiaries | A | (stable) | N.A. | 7/28/2022 | ||||||||||||||||||||||||||||
HMEC's Supplemental & Group Benefits subsidiaries | ||||||||||||||||||||||||||||||||
Madison National Life Insurance Company | A- | (stable) | N.A. | 7/28/2022 | ||||||||||||||||||||||||||||
National Teachers Associates Life Insurance Company | A | (stable) | N.A. | 7/28/2022 | ||||||||||||||||||||||||||||
Fitch | A | (stable) | BBB | (stable) | 10/18/2022 | |||||||||||||||||||||||||||
Moody's | ||||||||||||||||||||||||||||||||
HMEC (parent company) | Baa2 | (negative) | 3/1/2023 | |||||||||||||||||||||||||||||
HMEC's Life Group | A2 | (negative) | 3/1/2023 | |||||||||||||||||||||||||||||
HMEC's P&C Group | A2 | (negative) | 3/1/2023 | |||||||||||||||||||||||||||||
S&P | A | (stable) | BBB | (stable) | 2/7/2023 |
Horace Mann Educators Corporation | 63 | First Quarter 2023 Form 10-Q |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased under the Program | Approximate Dollar Value of Shares that may yet be Purchased under the Program | ||||||||||||||||||||||
January 1 - 31 | 54,400 | $ | 33.86 | 54,400 | $ | 39.5 | million | |||||||||||||||||||
February 1 - 28 | 22,121 | 35.27 | 22,121 | $ | 38.7 | million | ||||||||||||||||||||
March 1 - 31 | 52,019 | 33.64 | 52,019 | $ | 36.9 | million | ||||||||||||||||||||
Total | 128,540 | $ | 34.01 | 128,540 | $ | 36.9 | million |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under The Plans or Programs | ||||||||
July 1 - 31 | — | — | — | $29.5 million | ||||||||
August 1 - 31 | — | — | — | $29.5 million | ||||||||
September 1 - 30 | 48,440 | $ | 34.26 | 48,440 | $27.8 million | |||||||
Total | 48,440 | $ | 34.26 | 48,440 | $27.8 million |
Exhibit | ||||||||
No. | Description | |||||||
(3) Articles of incorporation and bylaws: | ||||||||
3.1 | ||||||||
3.2 | ||||||||
Horace Mann Educators Corporation | 65 | First Quarter 2023 Form 10-Q |
(4) Instruments defining the rights of security holders, including indentures: | ||||||||
4.1 | ||||||||
4.1(a) | ||||||||
4.2 | ||||||||
4.3 | ||||||||
(10) Material contracts: | ||||||||
10.1 | ||||||||
10.1(a) | ||||||||
10.2* | ||||||||
10.2(a)* | ||||||||
10.2(b)* | ||||||||
10.2(c)* | ||||||||
10.2(d)* | ||||||||
Horace Mann Educators Corporation | 66 | First Quarter 2023 Form 10-Q |
10.2(e)* | ||||||||
10.3* | ||||||||
10.3(a)* | ||||||||
10.3(b)* | ||||||||
10.3(c)* | ||||||||
10.3(d)* | ||||||||
10.3(e)* | ||||||||
10.3(g)* | ||||||||
10.3(h)* | ||||||||
67 | First Quarter 2023 Form 10-Q |
10.5* | ||||||||
10.6* | ||||||||
10.7* | ||||||||
10.8* | ||||||||
10.9* | ||||||||
10.10(a)* | ||||||||
10.11* | ||||||||
10.11(a)* | ||||||||
10.11(b)* | ||||||||
10.12 | ||||||||
10.13 | ||||||||
10.14 | ||||||||
(31) Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002: | ||||||||
68 | First Quarter 2023 Form 10-Q |
31.1 | ||||||||
31.2 | ||||||||
(32) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002: | ||||||||
32.1 | ||||||||
32.2 | ||||||||
(99) Additional exhibits: | ||||||||
99.1 | ||||||||
(101) Interactive Data File: | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | XBRL Taxonomy Extension Schema | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
Horace Mann Educators Corporation | 69 | First Quarter 2023 Form 10-Q |
HORACE MANN EDUCATORS CORPORATION | |||||||||||
(Registrant) | |||||||||||
Date | /s/ Marita Zuraitis | ||||||||||
Marita Zuraitis | |||||||||||
President and Chief Executive Officer | |||||||||||
Date | /s/ Bret A. Conklin | ||||||||||
Bret A. Conklin | |||||||||||
Executive Vice President and | |||||||||||
Chief Financial Officer | |||||||||||
Date | /s/ Kimberly A. Johnson | ||||||||||
Kimberly A. Johnson | |||||||||||
Senior Vice President, Controller and | |||||||||||
Principal Accounting Officer |
Horace Mann Educators Corporation | 70 | First Quarter 2023 Form 10-Q |