HMN - Earnings call transcript Q4 2019 | Horace Mann Educators Corporation

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Operator

Good morning and welcome to the Horace Mann Educators’ Fourth Quarter and Full Year 2019 Investor Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please

now Heather Wietzel, would go like Ms. to to over ahead. conference the Vice please turn Wietzel, I President, Relations. Investor

Heather Wietzel

morning. of Welcome and our results. XXXX Web Page our are issued and with Horace morning, available you release we quarter investor everyone. site earnings was supplement. Thank Mann's full along good Yesterday, posted discussion presentation of investor our our year on fourth and Investor this to which Copies the

today Zuraitis, Vice Greenier, Officer; and available Marita speakers Sharpe, and and Development; Bret Bill Chief Also EVP Executive Our and Chief Matt Business are Wade are President Officer. EVP Corporate Q&A Conklin, President for Ryan Rugenstein, SVP Finance. Product; Distribution and Caldwell, EVP Executive the Financial Operations;

release. news In expectations GAAP over which company due use differ are Marita, our on described risks and statements of that in performance. based the to include management's variety comparable measures Reconciliations to note it to guarantees update of are includes assume statements Act factors turning current These Reform cautions obligation and news and some The our filings. available Litigation of release future prepared forward-looking uncertainties want our to measures. of as statements that Actual remarks, materially most results forward-looking non-GAAP I a in SEC no XXXX. investors and them. in measures Private the defined we may are to are today not presentation forward-looking we Before any Securities our these

attending APA you know let March. we [ph] early in wanted be will we to Finally, that

many see to hoping of you there. We’re

to call the Marita. turn I'll that, over With

Marita Zuraitis

was we year results welcome across Good our guidance Last call. lines. core of diluted business all our share. reported morning everyone earnings to our Thanks, per $X.XX Heather. strong full Surpassing XXXX and night,

while business, reflecting P&C share, the segment margins in losses, profitability without lower retirement were Year-over-year improved we the better future. new segment accomplished for the threefold, catastrophe supplemental underlying market of our sacrificing core and earnings funding this addition up of in the all

show XXXX's and By details reach creation. we the initiatives. accelerate later strategic solutions more cover Bret in educators expanded shareholder call. guidance on results transformational our in will Further, value of our our potential XXXX, our to market further to work of provide building XXXX the the

EPS a At least core XX% confident we’re a can XXXX increase our by without over high we in sales. grow level, that significant projecting at

full few a on point remain We improvement of reaching return on expect focused years. double-digit a next the over at least and ROE equity

we we Associates Teachers the the reinsurance annuity with past Our of in made outlook distribution and Group reflects impact legacy transformational well and Consultants Benefit years the as completed investments had the five over as in acquisition of XXXX; combined the strong company's steps transaction. products, the infrastructure National

me outlook, Before I a on touch XXXX. our few let that expand highlights in of on operations

three rate achieved met We ratio points the we years best combination not initiatives improvement auto through since which our combined goal ratio our actions. actually was cumulative We since First, of improvement loss underwriting auto but X-point a XXXX. of X.X exceeded achieved underlying a and XXXX. over only

At we’ve over preferred modestly the targeted three time, up to in markets, premiums so able the retain same policyholders are years. been

positioned Property for facing market. business profitable, are the we also P&C well With the the challenges

of add We P&C a profitable work new business to agents with in continue number closely geographies. to growing

infrastructure investments. benefits we’re seeing of Further, our tangible

share $X.XX XXXX of by expense $XX reduction reduce operating quarter earnings X.X run million. costs or at initiatives by Related our per severance expense affected total a successfully fourth least million. Our rate

of and segment our generate future second These savings benefits underway phase the of currently our advantages already include implementation in have made we every efficiency Guidewire upgrades will years. systems due business, the across

data of administration Guidewire system implementation, in the segmentation and and system capabilities to P&C new the substantial digital claim analysis, Similar terms offers ease-of-use. benefits

we annuities, despite continue our in interest higher block that is had strong transactions through expected Reinsuring outlook. interest low crediting XXXX XXXX. a also to the the of completed sustained environment legacy annuity role our The which spread fixed rate important an rate, play in has improved

interest In the to capital addition to transaction the reducing used margin the rate business. up acquire was company's that exposure, freed higher supplemental

to We the ended retirement like the performance weather the to improved mortality P&C new business or the a not XXXX of to significantly supplemental The risk due of of with business segment the products. life of derisking addition and both supplemental is mix portfolio correlated the business. seasonality,

its another rate three more remain With more is retirement the like months predictable transaction. fluctuations, interest earning the not every It is aspect very the integration, with of into pleased subject returns, segment. diversification even the also to And valuable. we

profitability is coming a it experience our educators want initiatives of the needs we progress the are our with in that completed that we unique solutions in to and well-equipped full the in have provide Considering customer address Today, clear agency complement force that modernized share expanded years. XXXX, substantially and tandem we've type educators’ systems that increase deserve. of market and

progress XXXX, as benefits the supplemental aligning first and our further to strategies. of portfolio current investment make synergies the we on expense gaining In expect with well efficiencies as

double-digit we've As path these part achievements of a before, said are our ROE. to

Mann sales beyond from additional to well including look ROE supplemental products income from these net growth as investment in as supplemental the we XXXX, households. Horace cross-selling As portfolio benefit will

long-term supplemental success. orientation cost with derail of about concerned The accident plans. perfectly we've line product asked educators unexpected educators that aimed into an been at it There’s achieve or medical something the could by financial fits their lifelong savings solutions emergency helping that our

solutions we a business, successful XX-year forces, important very as to had these offering educators. Before history joined a NTA

seen was focus who in for ensure a companies targets we're growth. objective approach the a we've of far, staged first what with very NTA so to including to achieved sustainable the their year. thoughtful bringing undertake Our the together of two building agents pleased the base sales I’m

products. they and by been licensing so the agents have appropriate appointed supplemental stage, most have NTA this At the sell Horace Mann can

reinforce products helps the that collectively incorporate new training them are their working the into sales repeatable We processes. to

expanded our time host was agents together knowledge month, the we to bringing we company from best sales both groups niche management rewarding our see It force. together such are brought the meeting in achieve share greater and able our Last annual to to practices. truly each mission-centric the companies By in same the embedded to for national best of we agency with first experienced two market, similar utilize success. best

largely in Our under businesses relies potential. offers control, a while growth on double-digit our path factors to our existing additional ROE

of as in handful in business. does With of presence both schools addition the in we where Horace half the the have roughly the Mann states opportunity those currently active where do locations now do is have as significant which a is excluding presence the presence. an well There not we school supplemental not current low of agents, in our country,

commitment as to Before I Horace social I of Bret, Mann's fundamental over to turn corporate responsibility wanted highlight our the element business success. a call to

For value believe we all example, are which constituents. to of that differences respected an appreciated in culture provides individual our recognized, and inclusive

and throughout workplace These undertook globally strengthen understanding, events recognized. the were conversations In meaningful we diversity efforts workshops experts month, XXXX, from a in culture. several featuring bias of to about encouraging companywide a others country. Last included week these and the and our of day actions inclusive

Equality year equal committed includes and to in Horace the Index, public which row, more named Bloomberg Mann For second workplaces. inclusive Gender a companies the was to

among the named some XXX It’s the brightest. to pleased companies very We’re to a be Index. best of of and group

track. the always we that right our have to to While we’re it, confirmations on strengthen planning can do on and we’re more external culture, inclusive good it's

and To confident XXXX of year, we and Mann. we’re to of sum up, was build we strength strategy strong continue XXth will Horace that year are the success on XXXX. that vision, illustrated a the celebrating in our corporate anniversary This

the has provide our due as company educators, to solutions to tomorrow. have success prepare company a to unwavering and continued help today founders they the protect continue to to largely our educators of a choice to vision, for them what all and and that successful will financial to Our commitment inspired be be

the And to that, turn with over Thanks. I'll call Bret.

Bret Conklin

and Marita, good morning, Thanks, everyone.

meet than results of financial ever XXXX before noted, to Marita are we better confirm needs that equipped the As educators.

We a become on the double-digit more larger, company path ROE. a have to diverse

clearly of on even build the see earnings more we as to XXXX, expect transformational We potential work. in our our business

highlights how it on XXXX the so I performance results, outlook me together Then let few right comes each a of into for dive our Marita comments segment. with all and EPS covered will the in finish up guidance.

new been value $XX.X and $X.X half contract earnings, Let and XX% of and me start Horace segment second illustrating million premiums The supplemental. represented diversification premiums with part business. Mann NTA half it with core of of second approximately the total Xst has in million July brings. about since in XX% charges added

in policies XXX,XXX almost with XX.X% was force. persistency Premium

on income this As are we've premiums second was the the portfolio million for quarter-to-quarter. investment in $X.X business half. stable supplemental relatively Net said,

was the XX.X%. ratio changes six reflecting benefits operating the For XX.X% favorable months, reserve expense was the ratio and

million of future. included constant for $X.X Operating in be amortization rate the $XX The annual which relatively intangible foreseeable should for million to $XX.X be expenses pre-tax, million amortization run intangible non-cash should assets.

year, of six so to the ahead the guidance $XX profit the our $XX a ratio, pre-tax million second the segment margin of of for benefit The from million. to benefited months contributed $XX million half core better-than-expected in earnings

to the we the supplemental be XXXX $XX million year with to to margin pre-tax expect adding between Going earnings. full million forward, $XX low mid-XXs profit in and core

start will segment to benefit year, from portfolio the During income repositioning. investment

since core segment, were $XX.X substantially of Casualty best for of year. Turning combined $XX.X improved to year XX.X to Property million has ratio the been versus loss earnings last a last reported the The and XXXX million it XXXX. over

in losses The cost fourth net full Fire. QX. CAT largely resulted than that million XX half in events year, XXXX, X.X ratio benefited in included less year’s our last because the This Camp CAT year in from were quarter reported combined losses of CAT

XX Camp reached subrogation is The to billion from for us and timing move offered X.X forward. losses the subrogation some PG&E settlement we’re the the we the to court line of the bankruptcy Full last claims. those group or but Fire, ratio losses the allow CAT XXXX recover the that combined will million part points agreement with guidance process that in quarter. ad an totaled final unclear, hoc with continues of of year were On $XX to

Turning to very results. the auto with we’re performance, pleased

for the while ratio points by reported X For improved year. underlying auto improved the ratio year, loss points the full by X.X the combined

is improvement it and of noted, well our been ROE of ratio As loss our cumulative driver has objective original a improvement. ahead key Marita

and the book and in to Property pace digits Rate increases to the results. low auto costs, consistent. generated mid-single keep strong with averaged across remain loss loss trends continue also

For was combined XX.X. year, Property ratio the the full

ratio. combined pleased take we that initiatives to digit expect line, we to our Although are closer with the low in bring and of will our will around continue rates to line claims underwriting mid-single focus target of we profitability XX% the on the

P&C points P&C upper full the X.X ratio in independent releases auto and Total both range. actuaries of reserves The property-casualty the in our The line in half combined expense year, benefited books favorable year in the year. by property was remained reserve points with ratio XX.X for guidance. earlier from the the solidly

expense about year make additional million $XX of loss ratios, and the progress XXXX, earnings X.X core the to in CAT expect we full range or a of presumes in full and ratio. And $XX maintain as XX that some to be P&C we’ve again million made ratio ratio. we on on XX, For the this $XX load between guidance million year to the with underlying would combined points expect million the combined improvement $XX

with for XXXX. premiums line XXXX in written should Net be

On seeing the growing our and in the number are business side, in new rate geographies achieving plus increases trends profitability that of are we positive targets. continue

We accelerate to over expect and time, policy improve accounts progresses. in will as leading retention year the growth this

Core the year table. on for income. line the earnings because as the products offset increased based lower life pricing prior segment, lower and higher introduction issued expenses the of year, the policy of in X% year. guidance lower were with of sales with products prior costs and single of For updated primarily our Life sales number were over helped lower than mortality premium investment mortality net

full anticipate sales flat life be will We in total year XXXX.

life well their more our help being customers’ to financial continue the agents of insurance see can Our contribute how to of families.

in expect ex-DAC to products. deliver model premium continue We with sales in XX mortality. growth The segment XX XXXX million a of million return long-term recurring earnings our should to to

of assets block we rate annuities reminder April transaction effective a million Xst. capital, July X.X%. individual of invested the with of results was segment, interest Before purchase to transaction reflect just annuity Xst retirement our NTA, reducing reinsurance released the The second a redeployed that The I transaction of million legacy minimum XXX segment the risk since rate addressed which quarter. completed $XXX to crediting in turn retirement of a

continue financials transaction, for to even Under the they flow the the are our transaction of the though elements the RGA. responsibility through treatment reinsurer of accounting required

and entry now sheet deposit net shows total balance for income Our on investment accreted reinsurance investment a asset income. includes an

the supplement operations. ongoing reinsured results investor some block retirement clearly more shows to The of metrics, of the the illustrate excluding

the retirement management billion For $X.X in year-end, retained had assets business under billion and in we at $X.X administration. assets under

the for versus product important be set. crediting rate they After educator an Annuity traditional quarter complementing to on and year the of sales products. customers, fee-based fixed continue the deposits annuities X.X% previously. suite up to of transaction, our and while now both Annuities of the financial average objectives reinsurance our were X.X% part our is growing appeal the

about point XXX-basis to but we in more XXX-basis spread the net year interest interest spread rate the moment, quarter spread full for prior transaction. expect net was basis first XXX the includes between interest and talk The points XXX point the the XXXX. environment in I’ll a which for XXXX

full were $XX quarter. to reflected guidance. earnings retirement Fourth investment lower the income higher earnings our For compared million as alternative third expenses, prepayments as year, including line strong costs well core and severance ex-DAC the in quarter with

We million lower a earnings offset of XXXX for by the run be from $XX expense somewhat expect to income. rate, will $XX segment in The million. core investment range lower benefit to

quarter on came full the lower the our our rate in portfolio. Total portfolio to Turning to million. investment investment very expected the $XX year despite managed the interest than income of fourth close was rate Total environment. for investment run XXXX income challenging guidance in

prepayments of the income quarters. the were investment and second and strong below Alternative very levels third

X.XX%. on result, was portfolio the a As pre-tax the yield the in quarter fourth

quarter challenging. total reducing over rates in for a basis XX the be the of rate money public the The continue points. half bps to securities yields XXX new With was income fourth Fed fixed of second by XXXX,

rate fixed We expect further X.X% around the with XXXX compression for spread in core new portfolio. the money income

allocation to see and mortgage in continue partnership infrastructure returns and more these classes commercial asset to compelling increase private to risk-adjusted We credit limited loans, via investments. continue

million fair year-end $XXX was portfolio contributed million value nearly The of investment it to income. and this $XX

million returns be alternative income contribution investments X% We target additional similar to XXXX. to fund portfolio of an on expect X%, XXXX $XXX to its and between should in for With this our investment XXXX. XXXX

generally income the around we've be investment managed rate net the since investment reinsurance including in quarterly portfolios, will with line XXXX transaction. total the seen run expect We from NTA, $XXX million

rate We XX steady repositioning alternative be NTA Accreted the portfolio reinsurance expect returns on about should we environment, on the from million the fixed portfolio million approximately maturity investment asset the income but portfolio. benefit will be on or of our constrained due XX per contribution and to the quarter. will deposit of

investment the total the transaction XXXX, offset pieces net acquisition. flat is primary income with the after investment will NTA's net investment in reinsurance net total Putting and together, investment reflect should income income XXXX smaller although portfolio NTA income. be the retirement segment’s

our severance our Fourth included solid segments, $X.XX across charges. results XXXX were with quarter summary, in line all of guidance. results In

As we to of XXXX rise core we release, EPS expect to X%. X $X.XX at least noted ROE the about to up in XX% the full year point range with to above $X.XX yesterday

Each segment strong contributes to our outlook.

$XX guidance CAT million the to the recap, contribute Property million losses should from see million about Our of the core ratio. expense to they $XX in XXXX X.X and points earnings reflects Casualty for their benefit will reductions. $XX assuming To combined in each share at

lastly, contribute million contribute $XX income. in lower million XXXX, $XX a Retirement $XX life to rate. Supplemental model expense And and between benefiting and million run return million a $XX contribute should $XX investment mortality. rising should $XX million reflecting with net to million between should from

fulfill future benefiting their the across from we've reflect integration market align ahead, will Further, few improvement with NTA investment further past objectives will our growth portfolio as Looking the ROE businesses. we ROE with cross-sell solid expansion strategies. in the support built the our and years share foundation current

again, are there and many as they by sustained be created the ROE, offset partially being may by low while such additional of environment drivers interest capital, business. course, future Of the factors rate positive the

Our intent the accretive capital for organization our the focused by remains stronger most uses. generated excess on

exceed two, back growing earnings targets; This returns opportunistically And includes; business back ROE portion or via dividend. returning to shares at our when shareholders of buying one, a compelling a our annual third, that significant market warrant. conditions meet

the close, the To results and improvement stage beyond. in we in set XXXX for achieved continued XXXX

And delivering Our in the and been is ROE the reaching revenue of P&C intended next profile double earnings initiatives successful. our profitability strong capable Supplemental more diversification. is few and digits years. have than finally, of benefits

to that, Heather I'll it And Q&A. turn with for back Thank you.

Heather Wietzel

Welcome, everyone.

Q&A We’re ready, to if the for you want poll. Anita,

Operator

[Operator you. Instructions]. Thank

question first go from JMP. ahead. Carletti Matt comes today with Please The

Matt Carletti

have Just a questions. couple of

you think the Marita in business, few give is we the things. higher those, more is, and XXXX? changes us should think going it update supplemental just feel and quarter maybe positive new One about was how I First kind and level a could about you a how the things any or an little forward the far how it just on has of so gone hoping integration about but how update on reserve in you detail about

Marita Zuraitis

are more with Yes, I where couldn’t be NTA. with Matt, pleased we

that we on and an question. is from front, due I in made despite let the with to major that comes the our transaction overall very to their is the like standpoint Wade? diligence. agents most this, integration point results expected the transaction during I'll sales But out well think your point the for Wade every the actually on distraction extremely plan pleased a specifics the we're that important chime going producing NTA year. clearly

Wade Rugenstein

on mentioned, ratio changes first we’ve favorable driven the six reflected reserve that’s morbidity that as on on of benefits our the for Bret the by the products better months some comment Matt, Yes, past a addition and spike slot reserves the really in lapsed we in of also. that that cause a small can a kind non-strategic older some payroll in policies reserves favorable seen non-educator with had and

makes that’s what that So change. up really

Matt Carletti

Great. going to second. And then a actually other P&C just to shift for my question

of there. progress great sounds little good maybe How kind and when made focused it your lot or well and kind surprising of and to sounds been and re-underwriting pressure under You’ve inflection on about should not about again on I’m a kind been you think Property’s that’s do rate P&C grow a performing I it. spot of you very pushing for better. expect that starting a like you of while business PIF stable. and book wanted is a it through in Auto on, that’s just think a like we count when you’re bit basis? be PIF point expect a thoughts the to

Marita Zuraitis

recap Matt, before what P&C, is But a the important Bill question it’s little bit XXXX. growth right and the think it gets I us think our to clearly specific for is question with in I focus. we saw again

major in point book added value households, heavy of in the results up We’re ROE, really that educator increase the We share. NTA, we we board Across proud and new sensitivity. held XXX a including business derisked the new agents new, XXX,XXX added lifting we X XX%. interest XXXX. had three market a actively, all transactions a from rate brand reinsurance despite transaction And our added segment. We that

significant increase that’s think then XXXX, for strong planning in look without over a result. we a growth. when XX% have I we pretty And earnings at

script solid And supplemental for pretty of foundation our When really that a do. much about the game addition standpoint, – the with was is solid. penetration. the our across half in that set locations does board’s low with growth. products, said, all NTA you force wanted of mentioned that school our really last with stronger. PDI we the We I we’re country, think strategy, think in a to addition sales big product product some From the the relatively that’s distribution complete. it

standpoint, as positions efficiencies. Guidewire well in. So we’re from increased that implementation as really our with there we have and not us well an decreased expenses the opportunity there And the infrastructure ones even

about the opportunity the get that with there. ahead can want he’s We feeling And to clearly So Bill, P&C. talk how don’t with a Guidewire about just ourselves. little implementation, bit is of

Bill Caldwell

a sales bit just little Matt, front. on the

expecting So a XXXX. in are increase we sales significant in

year, in said, rate came We lot had Certainly years, you We from retention. a the with smaller good a insulated the that offset you’ll As have good well, underwriting California re-underwriting, Colorado auto goes our shrunk due years think from Also lot in some of Florida of and prior Florida. flowing a some and it goes, catastrophe. still cohorts our when property and by off actions significantly XXXX. XXXX into wildfire there we’re year talk – I many Colorado from high that to of although the inflation work is somewhat social about of significantly in book. hear last

coming So despite off sales, bottom our the the of increase retention in are number. we

side, positive reality increases three that out – just the hole. XXXX into to we we of coming consecutive that’s and is expect the did retention On retention continue. coming in see that But just we’re

the Guidewire, of our offering, on capabilities. into that our next live goes ease significant few our digital product pricing business, Lastly capabilities, in doing weeks, improvements

to we that is we’re remember But expect state-by-state, also way implementing a growth. system policy-by-policy basis. on So that the provide

the old the be whole go as our for our state will but is state but the available expire live. on first those new we system when system, new So business onto certainly renew policies Illinois

Matt Carletti

Great. see XXXX Would maybe line a flat grew kind property and where auto overall, how just the a bit, flat related guidance a just – any on And about then versus look look the bit, property. question. one a like kind I kind of question pieces? of bit for thoughts might just that P&C little kind shrunk of auto top little component overall it tiny of

Bret Conklin

to be won’t decelerating. rate auto is with rate been in my We’ve XXXX start very similar at with It and I’ll property steady certainly. looking numbers.

anything in So but significant. mix, change may be a not slight

Matt Carletti

forward. very would for you back on as I of and the and XXXX congrats luck what looked going a Thank Great. think answers be transformational best

Marita Zuraitis

think Matt. too. so Thanks, We

Bret Conklin

Thanks.

Operator

Please The with John next Barnidge Sandler. question Piper ahead. from go comes

John Barnidge

more modeling model is analyst to there is is on think around XXXX mortality favorable that that considerations commentary? you XXXX mortality a the or about just prudent in start a off Thanks. in additional base to life, The of return commentary any

Bret Conklin

John. Yes, just of We experienced 'XX back kind the getting in XXX% results what we from 'XX that’s accurate, coming favorable in norm. and to obviously basically down exactly some experienced

that, an nothing it’s expect of block unusual. you’d so So, aging business and

a you’re you most year. year, the one increase to favorable If an likely see get in following

Bill Caldwell

This actuarial John, add is within expectations, just Bill. our I the it’s would certainly side. our ranges and just lower but

So mortality as you next that for to XXXX. favorable account in normalize we the plan for year,

John Barnidge

Great. And then can or term? you near maybe talk about something new product development for should we the within not NTA? Is expect that really

Marita Zuraitis

like. can wouldn’t I Wade I we need. portfolio Yes, he’d from NTA our chime products product from any And let perspective I if that the think lifting development a from in But has the heavy my expect perspective. of perspective, base

portfolio, the in we customers is looking are the what our they products you just that current due look our diligence were the at looked customers for. is cool for, One like our obviously portfolio looking educator have when things fact really when XX% that of at educator the NTA’s

that, So expect significant don’t to amount a we to wouldn’t product if you development. anything add I know have Wade? of

Wade Rugenstein

think a agree. We I being might for and heart make on minor I adjustments how basis some always fair. around are trends that’s treated, look and those cancer and No, year-by-year but

feel education the products and support have We community. the certainly comfortable that we with

John Barnidge

quick underwriting one just Great. vape insurance use changed the e-cigs? you your that life products standards And for in Have then or teachers one.

Bill Caldwell

around lot just a considered question as and a that’s It’s change. no marijuana been tobacco. there’s No,

no and change. that’s as but a cigarettes tobacco significant included with the there have We rate

John Barnidge

you very Congrats much. the Thank Okay. on quarter.

Marita Zuraitis

Thank you.

Operator

Meyer Shields question with next KBW. The go from ahead. Please comes

Meyer Shields

basic Great. One Thanks. Good morning. question.

I’m either We’re is any not recruitment under retention? in strong, seeing very employment the numbers, impact or the wondering new the there as numbers surface but it domestically on general remain agent

Marita Zuraitis

that. No, we see really don’t

when of As we use, that our fact, we looked at plan got bifurcation three the swim across a matter agency lanes. we’ve

looking agent’s been Mann and in a where products segment, place model of and a agents new agents agents have make we’ve the put also want retract and that’s segment, able new to to the feel a agent that have according on supplemental well ability developing In that segment. lot new that the Obviously to a to our in we we have our sell And products. have Horace to segment new Horace focus the NTA we that and up established new agent on Mann the agent time over agent recruitment lane, recruiting. speed the getting we’re we good numbers have about new there. swim we then sure growing the We

Meyer Shields

fantastic. other I And does already doesn’t it? want doesn’t high the that confirm Okay, we release pricing, high, this. implications I margins too that pricing the think reserve on or the have in too current for quarter, touched supplemental any to in words, fourth suggest just current is In whatever?

Bret Conklin

That’s correct, yes.

Meyer Shields

Okay, fantastic.

Bret Conklin

loss obviously which morbidity to Related ratios. ties into

Meyer Shields

you Thank Perfect. much. so

Operator

Ransom Gary Dowling The comes from next go question Partners. & with Please ahead.

Gary Ransom

that a run – way qualitative at Good that they reserving point I or whether I where prior the that it has morning. overly viewed is the any and is being supplemental if ownership similarly the maybe and wasn’t all segment? were I of or wanted a your category sure of for under reserve view of you to conservative describe ask about if strategy this the reserve changed in can as also, conservative there’s way more to just

Bret Conklin

reserving in to to at Bret required similarly experience is acquisition NTA’s start. on chime well. let conservative past with as this Gary, to Horace I wants pieces and that to been reflect if all. change the you add update to him we Mann, your if practices say factors, the don’t side to let couple of we’re of that practice me And Certainly But do and and have the will, basically kind would reserve NTA in intend question. of Wade a really color, to I’ll the

run We’re not thin reserves. to going

losing acquisition. added So did reserves required group that also by Wade portion of morbidity. up some purchase a GAAP as accounting non-educator about on our be trued a an color we to the at had have

those. were there would some as those built certain be products and probably with forward of new all-in, factors into set So going add a new we benefits level business, 'XX that of expect the conservatism

not end those So, NTA here, And range. practices no, the non-NTA on in intending we’re to the like the intend reserves conservative reserving the of past. we the to carry change of

Gary Ransom

largely the about just payments terms And reasonable products way understand as the to of frequency. these than to it just you talking I fairly think and or fixed it well put of the is that? having more is so think this, there Property-Casualty severity nature Is that known we’re a it I about that in if

Bret Conklin

that’s Gary. No, very description, fair I a think

Marita Zuraitis

This is Marita.

or the company we been looking a some time in period Very things I of a that understanding buy marketplace fit, nice the talking clean doing bolt-on clear why either for that’s way build, to think about of this long of supplement now. products. XX-year-old very was this with the of were it offering, because when that’s educators a product we’re

Our they get arms expenses these because our and unexpected around products an from event, very afford can’t but to the it. it’s out-of-pocket educators clear-cut easy us buy for

Gary Ransom

Thank that. you for

as there’s Just another industry. still down both Auto comment frequency I are the in and I in of numbers industry – you auto lot a just question of the acceleration there signs the But as little also, going could trends we are mostly frequency the in guess but on you a see side and in bit that? severity if trends on I what severity wondered the BI, – in I’m repair on thinking could some your if assume of side, well.

Bill Caldwell

of call are in than the Sure. talked technology social that Gary, due is being which well as an higher A I inflation that. is about as vehicles, still lot to what offset are we certainly inflationary. that’s would frequencies, seeing improved but the to severities

program that be respect a identification to we’re tends our with and of I years well that process companies, as couple on a force seeing the would some issues think lot the early sales those can enforced to don’t fast. early very the social Unlike to go tight of inflation engaged of competitors we’ve much our lot pretty claims. because as fender-benders over So of engage clean could last a is that it very other mixed as quickly say as we with high it as with sideways get I small

The spirals quicker that kind faster. document information that out you us getting of the it They’re can the engaged. control. of are agents claim, our less So, chance

but processes are more the inflationary to increases have injury. we high a in again think than in there level place at we So control, some

Gary Ransom

you. Thank question one of last the And right. on All just Guidewire. implementation

this and the times that to Will selection in provide and analytics there any this big or understand of a you you be market qualitative how there? change some capabilities better is a additional auto power as you product trying couple mentioned As I’m of to will that is. give pricing able really

Bill Caldwell

Sure.

is get tie party sophisticated The might opens segmentation. analytics that say I up. have around strong. as of a most that went don’t A that because ability the into There’s expenses. technologies whole simple so fields of demand, say data just would pricing Guidewire I’ll help we flexible. very the system I product to benefits to So just the of on in and you the are would that just things – of our many multiple and our need discounts work third more greater into being sources as our slew translation that lot example use paperless we a have

Gary Ransom

much. helpful. Okay, very you that’s Thank

Bill Caldwell

Thank you.

Operator

session. to question-and-answer for our remarks. back I any concludes now Wietzel would like over the closing conference This turn to Heather

Heather Wietzel

to any We of I for in many look you the coming call. to months. forward everyone us you. interim, free And joining appreciate feel in you a if there of Thank it. give me today. Thank questions couple seeing are the

Operator

for This you conference today’s concluded. has not presentation. Thank attending

You may now disconnect.

Horace Mann Educators (HMN) 6 Feb 202019 Q4 Earnings call transcript