HMN - Earnings call transcript Q1 2021 | Horace Mann Educators Corporation

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Operator

Good morning and welcome. The Horace Mann Educators First Quarter of 2021 Investors' Call [Operator Instructions] Please note that this event is being recorded. I'd like to turn the call over to Ms. Heather Wietzel, Vice President of Investor Relations. Please go ahead.

Heather Wietzel

morning, good and you, everyone. Thank Mann's Welcome results. our quarter of to Horace first discussion Yesterday, investors release earnings we our issued and supplement. morning. which Copies are along posted presentation, website, of page this was available on with the our Investor's our investor Executive Marita Zuraitis, President today's the and Chief Executive call. give Financial will remarks Vice Bret Officer, Officer, Chief formal President and and Conklin, on Retirement, on Supplemental, on on P&C, Desrochers us Q&A, Mike on With Weckenbrock Mark for Greenier we Distribution, have and Life and Sanders Investment. Matt on Ryan Sharpe Tyson

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

Marita Zuraitis

morning, good and everyone. Heather, Thanks,

knowledge my business. calls. in quarterly day-to-day sales team earnings. with year. year-over-year We combined of that earnings, recording Before the highest and welcome in particularly first of has senior XX.X% joined today, reported core for our momentum run an and segment Sanders retirement, encouraging higher investor appreciate a know Tyson years, All our ratio, you'll $X.XX. April. March, Horace ever, saw the operations to has we start part we X I team past continued points catastrophe his I despite to our with core seven of want losses. property in night, been casualty segments He March, Last On to had into for of supplemental EPS and results signs quarter of Mann's X Tyson

start future our in increase bodes Bret included through income educators highlights detail, also opportunities. sustainable meet on goal relationship for but long-term Mann investment will enrollment, for managed the well of book and many their of through to with excluding the our this equity. return cross-sell a results strong savings in towards portfolio, go retirement X.X% XX% As XXXX earnings gains. demonstrates in Horace year double-digit start the a positions growth full unrealized value, progress This core guidance, us and our further quarter

XX%, lines Our X.X annualized changes for core about pandemic-related policy quarter auto behavior was added although equity the the first return and on supplemental nearly points. in holder

We in ability the double-digit are committed world. a our post-vaccine confident to extends on into return achieve and to equity that

expect to XXXX from X We at to target pushing level. are ROE the sustain drivers we see our in benefits

quarter, by from investments. alternative have in from XX%, annualized asset at higher global economic class. strong very In the strong, private returns this the a we profile. to benefiting Considering investment first strong outlook, remain which our partnership investments, net limited were return contributions income confident the from additional First, equity portfolio in alternative increasing primarily allocation nearly continued

management. expense Second,

full realize to benefits shorter improvements. from the reductions, as as Beyond actions of as well term supplemental segment the savings expense continued integration in the from pandemic-related such the infrastructure XXXX, we continue

Third, new cross-sell sales. and

sales, with contract March several auto, good strong was been bolstered month has and moves. rollout business to growth, In life by sales deposits additional XXXX, vaccines of states, March another for pricing submissions progress. outlook April auto highest was production. aggressive where for years, of the were we written investments We're seeing in Educators signs the encouraging applications of are in jump for seeing down country. trending in in in annuity compared planning signs April across plan driven COVID-XX strategies We've futures. premiums want our month. help supports are a business We of profits identifying quarter months several their more profitability although more up. which and key new for first pre-pandemic new to are states, business in new the those

of March addition, counts auto In higher unit March were new in XXXX. than

trend, Just agents but X our actively are a it's clear month doesn't engaged. make

challenges expect we our growth Ultimately, extended although this later the used as enrollments. proposition momentum. us are and administrators. new to their facing, business their seeing benefit and although time meeting with we signs were by of on strengthen We see focused our typical were making clearly capabilities. supplemental, educators to districts, more we and the efficient are for sales quick limiting accelerating acknowledge For enhancements value growth, have activities, transition some of circumstances annual pandemic virtual educators, And easier interacting doing the to and year pandemic-related ease educators to complete school

the their for recruitment help administrators, need educator school For pandemic district addressing accelerated and retention.

solution manage quarter, last public forgiveness XXX,XXX loan debt. they other with currently representing educators partnering we're school with educator districts households, student deserve, solutions receive student platform to help the their to employees. our loan about for along mentioned we online helps loan service resources This provide As

The XXX completed that believe of rollout these We service we educators, and levels districts of districts staff. Horace which section During for for districts, use quarter, a thing many now the offer new XX,XXX represent the in-person platform in-person many their the of to capabilities and These administration, the as our Mann of process, have vaccine improving to remain, integration approximately We're administrators agents. for the for rollout but students. pharmaceutical upcoming our tax advantaged districts, on group will environments, accelerating benefits a efficacy develop, model products our companies means and address products, a in their to educators, and we employees supplemental undertake also supplemental select which those enrollment basis. XXX face. they precautions have that challenges educators good like for We're the enhancing Section instruction, seamlessly testing resumed just children. as other for help consultation clinical integrates opportunities leveraging This accelerated could supplemental virtual social vaccines they our hybrid opportunity the supplemental the the learning is the build-out benefits period. to of enrollment schools products during in distancing,

to agency the Turning force.

agents, on focused noted school integration in us had we benefit This fill district successful of officials we've in working of to As XXXX, the with with educators. agents. supplemental experienced and territories uncovered allowing the

to we new the to up turning we're Overall, phase with bringing agents is years. to I'm filling. used the environment moving pleased to and speed, we today, recruitment into prepare, the conducive how are over where several growth As we've more discussed the and XXXX pipeline becomes past very

to right meet modern, easy distribution, knowledgeable, needs, preferences, business tailored educator products to infrastructure We unique scalable that is trusted educators' the have and to do with.

sales educator our virtual makes significantly bring do all evolving to goal bonus. advantage, efficiency opportunity business progress Bringing for position a tools larger the of and market these making share. towards in-person important us together Our well pieces

helping Teacher I every they I Appreciation turn inspired dedication take past educators Working want year. to of to recognize and over remained simultaneous call country's Before over respect to by continually moment reaching has Bret, settings, and are on to Mann, across students, the our Week. we a the teaching At multiple, focused each their Horace that grown the student. sometimes only a

location, could supplies based their As million. districts. narrowing newly to a member them The are primary Springfield, grade move help to learning emotional of for all philosophy level on learning school help process help, educators Illinois Horace provide use of staffing to succeed. provide testing, implement initial middle foundation's emotional Foundation first needs the program Educators an and resources, communities educators of standardized and expanding The early public of is that and year, past school districts our social the needs the our elementary social made by district. in To classes on we belief formed more its a students provided contribution donation standards to students paraprofessionals days address Educators formed last the to with identified Horace school experts help be teaching Recently, the help best the will said focus in home. funding was in to for how communities Mann and events in the the educators students Mann the funded forward schools, $X focus school and de-emphasizing in help on the educators, Its as these giving by pandemic, roadblocks year. targeted and with students at headquarters Foundation

will success call mission to has children, who for Thank with Our years. and forward. our you. care company mission, That care XX I'll the to over to our to educators the growth take take the turn guided our that, be critical past of of Bret. And moving continue

Bret Conklin

and Marita, morning, you, Thank good everyone.

First EPS the up solid which nearly a to X.X% the $X for quarter was consecutive Further, year our ROE and over XX%, toward record $X.XX, and XX.X% for the last a our guidance months, step of XX XX% quarter, year second prior first full $X.XX. from record EPS XX was quarter achieving for core was months.

of factors we initiatives pandemic strategic track sustainable ROE. digit contributed to to remain equally and clearly the unusual as on the and target our important, long-term Although other were improvement, our double

right the quarter, We're outlook lingering rest for segment, current accelerated. and the results. presumes I'll of going I'm as rollout vaccine guidance Mann. is to then our last As a XXXX by and from and and performance for effects with we sales the the beyond COVID-XX signs each finish holds year encouraged what on up recovery a Horace of initial gradual into dive of momentum pandemic said

pricing the line continued more saw higher ratio. volume. Underwriting X.X on X.X and losses. earnings were higher. of due quarters our year largely expense to X% remained underlying over Loss the policy tax and were our losses. reflecting as That largely well expense driven rates retention, operating Premiums while made driver carrybacks up reflect partially lower ongoing income reduced benefit tax and continued P&C up We year's, largely the is recent point business a stable. portfolio, offset holder down favorable of point retention auto quarter about combined CARES quarter. property was ratio patterns to Act in the were because generally catastrophe ratio, in in of alternatives we've property profitability. auto due lower was a improved combined loss segmentation X.X% onetime to costs for was driving the year's by last in For net by X.X%, reported The from X.X with pandemic, from core due was combined reflecting improved by benefit biggest over pre-pandemic the to first tax the for changing a net in was the continue the up progress year, year as the new investment casualty, point and to due several loss years improvement improvement model quarter, ratio enhance than improve returns auto long-term last costs, the to the and income income improvement treatment

Over rising the course XXXX, auto ratios long-term of toward loss gradually levels. anticipate our we target

X changes ratio, driving favorable will improved, increase permanent, last added of combined and points a property some loss offset we cat Because anticipate losses rates we ratio despite severity, combined become the year's XXXX. level, Cat presume to above be we loss X.X million to results, points strong expect year. auto increasing the those fairly the by with ratio. more last stable compared and patterns higher in in $X.X losses factors While the

mindful average not half XX-year very experience, remain full historical the losses April's Although our million, catastrophe loss points, with at of we second year or to are about cat XX average. the quarter almost historical equivalent $XX of outsized,

EPS X losses cat year's than losses. XXXX higher quarter, was and property to to X.X underlying last The water noncat of X.X full continues year points. include Our primarily points nonweather weather higher first guidance loss load ratio a of loss because

digits. in rise XXXX, with underlying the property we low stable, year single ratio full rates be expected For loss the to anticipate will

Finally, X.X the benefiting some of timing expenses. from expense ratio partially the improved point, by

XX%, in to a year million us that's line to back Over some the The of optimization first longer on achieve for expect XX% we the activities XXXX XXXX. full earnings to and track to guided programs, much segment. in for and benefit quarter from property our we target other add to strong that to casualty our $XX combined even core keeps million were course of year, for with term this travel the ratio that continue expense as of and we've $XX curtailed

supplemental. progress million educators the Nonetheless, existing experience more the to solid impacted the processes, these enforced. we continue and and Net metrics cross-sell in enrollments are changes consultative due open the Premium geographies. through on likely to industry, quarter yield. to trends normal supplemental to products educator contributed in Horace core $XX.X to their investment of benefit to million earnings, short-term by on require with in holder of Mann use customers, continue the a the reflects income policy the model. segment Supplemental behavior guidance and portfolio is sales The quarter. and in it favorable products the to traditionally supplemental first Turning capabilities, support improving on to X to agents million a provide XX.X%, $XX.X business benefit reserves, were the to virtual as site so coverages, the persistency we we COVID-XX. value in been during XXX,XXX policies point trajectory in with benefit continues investment to the supplemental testament a have return the and a historical enrollment work sales products newer supplemental making virtual-only place our most enrollment this model of supplemental sold of to been the the can sales steady more Across about educators. limitations have $X rose premiums

resulting a a for full supplementals of million, our mid shift holder expectation reflects policy pre-tax million in earnings, target Our that will there to claims in behavior, core to twenties profit be outlook year closer $XX the $XX of percent. longer-term XXXX gradual

trends sales is the was with month even with net were was industry March paid costs reflected investment number XX,XXX. up, quarter highest pandemic levels. in the reflecting were offset investment claims expectations, For earnings and policies sales were annualized line issued low, averaging April was The mortality activity for duration COVID-XX was partially the trending began, whole further the years. over favorable consistent above in with by to actuarial life of with year, the segment, second with continued on XX remains of net income. portfolio. values volume since the income Core last in policies the life higher life The ratio. up the and recurring-term improvement trends. and lapse recent pre-pandemic average XX.X%, face first returns strong. related Mortality Application of Segment alternatives that

continue core million. expect life XXXX be range $XX We earnings will to the of segment $XX in million to

were For first quarter times ex DAC X up interest than last favorable. interest segment, the the unlocking, spread was reflecting DAC net unlocking more The retirement year, improved margin. net core to earnings, business. is to first double-digit due XXX threshold over points alternatives XXX in in year's above our strong to last on returns part quarter, basis portfolio. This strong bps, achieve the this a ROE

several also years, strong. remain savings for deposits for for month contract a the April augmenting core and retirement educators. solutions for highest Our March annuity was need was

first quarter, full with were even year's the those last quarter. deposits For

to to customers is an of and they objectives, important annuities see their way by fee-based suite achieve continue products. our complimented educator financial are Our

will core million We DAC ex continue to range retirement of be in to $XX $XX anticipate earnings, million. the unlocking,

lag. alternatives one in Total signs of rose investments, total largely income purchases economy, portfolio a on quarter our X.XX% the in and the because net yield first rate to tactical continue adding XX% the portfolio new and largely quarter, a about core to funds Net income private core investments, core market of high money to to the XX%. while and portfolio quarter, single-digit a strong net income opportunistically with in million credit, first was commercial for on in reports of valuations quarter, agency current the quarter was our the Turning diversified on Driven our high corporate ago. remain we X.X% decisions government rise, portfolio. and quarter. confident conditions, are alternative generally based year the improving solid equity money on first posted for In exposure. realized to yield focus of X% had We The which strengthening in this new equity securities, mortgage quality core a high the were from million, total investments, million, $XX.X portfolio, by resulted continues $X investment impairments compared allocation improve year. we X.XX% returns, fixed like The to alternative which trading a managed of investment targeting first $X.X private to related return including rate other continue anticipate strategies losses market loan yield. a on up and portfolio in infrastructure, to in performance

For continue presentation, are of to shareholders. guidance committed outlook accreted create between prudently be our the is closing, total for for on year. to investment $XXX to $XXX investment a the and of quarter, the deposit generating our income including in XXth $X our re-insurance. segment-by-segment increased In million capital captured $X.XX. to expect net profitable asset businesses our first summarized capital, expectation we In XXXX, approximately that quarterly investor and million on $XXX income range dividend for we shareholder the and in in core we're will million, income This investment value consecutive using

There opportunistically at capital also excess priority returns ROE of million almost is or on our repurchased said, $XX.X businesses shares We meet exceed authorization. That that Horace existing growing targets. for XX,XXX top our our stock remains February. remaining Mann in our repurchase

opportunities, can new these capital to to respond opportunities move challenges. put market We gradually prepared As and have we we believe expansion. share that we work, support into to more nimbly see to to expect we are leverage a proven post-vaccine to environment,

the years, step trajectory I'll toward show double-digit share. objectives of past for turn another with sustainable ROE back several that, steady to and our expect market been you. we've on the will increased education long-term We on Thank And upward XXXX Heather. it

Heather Wietzel

questions. ready we're for Operator,

Operator

John comes Piper [Operator question at first Instructions] Barnidge from Our Sandler.

I think we lost Barnidge. Mr.

Ransom, at this Gary you're up So time.

Gary Ransom

that was and paces severity reopen. returning also other it seems looking on you I your just one might bit and trajectory few terms be if wondering might I'm the we in be another, next of could to coming of comment it you frequency thing, talk in talk you country different just auto. generally geography. and wonder if over I back parts as a frequency the companies see about little for of California companies across various months. about different be could to normal at how

Heather Wietzel

Gary, before one I the the we immune to somewhat in, We're that about always educator and remind segment. everyone turn it but of Mark, we're to segment over is that talk try trends, we always things insulated. not that to

with bit a deeper that let as I'll details. go on backdrop a the So Mark little Mark? drop,

Mark Desrochers

note exception down pretty compared costs would consistently that I script, notably costs. early we're in are some loss pre-pandemic of on in we next level. this what frequency, levels moving UM/UIM, of the year, actually our but, towards loss The the what's slowly coverages. do at now nature a lot accident as they below pre-pandemic Given is normalize lot pre-pandemic we expected, loss prior changes where towards above And we've costs get we that most cost to remain are seeing we fender-bender as they're saw are back levels. year, to seeing fewer with to we're tend closing the focus Each we overall accident-related end month, to across loss on overall loss the type as costs, And of of events, one most right that Bret the expect the the pre-pandemic the pandemic. in or levels to a seen going that mentioned the more

Gary Ransom

comment I the on we cost you're talking acceleration any whether you're on that what loss of of get the are last seeing you're going the there, certain definitely kind there's few overall severity, you costs, seeing if up, cost bit if medical could or there and and in a are in of focus costs I change in wonder months the but about repair little components

Mark Desrochers

inflation. up factors an increase has smaller of areas. areas, you definitely seeing One, supply what's rate is, a we seeing the when one but normal biggest of I'd take issues say a seeing are into Two, just impact But it the for into falls severity, out different data accounting of -- certainly there's severity. we're And left of we're digging costs severity. in some the lot couple of driving the of Yes, few different is from that's or events, larger in chain repairs. average there's of a a some increased what just the

Marita Zuraitis

trends, about educator And severity I'd and was write to have whether profitability is some our mean and pricing we saw pricing data we industry, business. historic see thing that more Gary, this the back with think and for of swings, of increases, our across about it's you pretty is the that that be about We profitability, as and industry trying in times, variability when wide scenario, profit to we of whether we've industry. it's those mean over pricing restore decreases. the again, as profitability that, similar big Marita. did but range increase restoration, the pricing the segment, pretty I did exception the large I trends, to to you averages. it's quite increases, whether when tend to large not pricing, tend One add our much the quarters, all loss worked. Obviously, the not the tight. talked costs, not think therefore we We book our our to

very of and the that it the job. years profitability the profitable lifting, educator on work done auto we've we And And is the book. did over in heavy a this that It book. speaks We couple profitability last underlies that that have good of to think nature our was the have a the of book. restoring lot I clients a we of

a there, The we and drop the a the we world frequency. have weren't think for wide in is tend trends. exception variability. stop a So all have a escape. of educators to we as one to I not saw came range even know, a When pretty to while to frequency that to as, remember this all swing, trend we that big going And that's do

Gary Ransom

you on do educators see agents at auto statement. all, behave, particularly, all there looking year, was is at did Just than as there it? out, up. insurance lot statement, to any that, last for probably an Was going it in, And go trying the how educators? you getting over But a the shopping a stable? of in rather Are educator's general anything at subdued or you and was more just quote opportunities this

Marita Zuraitis

I well coming. something most think last done over of being do sales, school the that on sure important very you we when couple thing time life with application and enrollment and educators getting in the what environment you past fully a they in. sales, with focusing a educators they the auto retirement change. do being I pandemic. for retirement, about an ready ready What as in numbers educating for were then, insurance, that as fall to up to we Bret his agents conversations had in to we were imagine. you activity on they doing saw And and that see get pretty that season, March as thought think March the sales found our momentum scenario have questioned and We our said them. is could to a XXXX. we very as for you auto, and in to now strong, about XXXX kids being was of we possible And of them constant busy any the in what auto, have of integrated, space needed our March of the in did, with able script, counts mean, go education we is, through it quoting real we our and to up. their were stronger we April And create XXXX months. not XXXX. time. of that, supplemental that the think We get life typically the generally the able whole and feel we and we that stronger enrollment, was is was, But you being worst saw even in hybrid, could retirement And what had a tough and thought retirement Gary, our tools, we the improving And I'm things than back group saw April trends the in of April March speed certainly, saw all ready needed to to virtual their April the environment sales systems. was spent we we of school, getting our in when line, industry, people had supplemental, trying much virtual, on And for auto, saw getting life saw pretty they would life saw, steady They with is, across that's in say saw about focus when had us and constant I than focused we the that then hold

about in think priority the XX So I don't top XX start back they're -- months. questions, a over back set the broader insurance game, but to think last was they're to of auto educators'

Operator

Piper John Next question from Sandler. Barnidge,

John Barnidge

this sales off really return. fast school and between maybe ramped and opening. hear be the the dynamic, time Like may lots take of I'm around more mute supplemental different, and think this around, activity schools summer now distribution vaccine your trying reopened, sales, expectations quarter, the I through to enough. maybe triangulate just thoughts Apologize, to if didn't about through given

Marita Zuraitis

improve be across total that in And the to we up we the by at but XXXX hesitancy folks' knew that, them the the taught care, best you right? also would to in It's value mostly reverse. assumed. activities put because full most It's some site size, in about told lines product. John, agents and at we We year, to We a in looked what be color second we early that to of a of both we our our This supplemental business. sales the business, industry of would we it We towards talked proposition. ramp planned the built that historic sold year, proposition we scripts. claim done. very until ramp of as the growth We ability is grow, our the expected bit we seek took sale, knew and for time would other And When XXXX, the truly it the was as towards second that need the is I half back what really we little that case. have the schools, very maybe full the previously to improved and taught in It's profitability we have far necessary we thoughtful. Yes, the could give these be platforms, we a even sales we business. pandemic, ourselves being business positioned the the knew for. the approaches. in the supplemental looked enrollments agents a also work game and agents doing similar to be the territories, in soft up. to of and going would This we our this. was And tried affected But were half and uncovered to in growth value world what our

products. are and benefits cycles for enrollment really shored We for XXXX-'XX have we the positioned the year, well up our very

platforms. products this and filings in about certainly feel took position half states the these into We very in and we of We profitable business shape. good this to Our of we growth time year, in for talked of like the and needed the really group filing beyond. are latter building XXXX

John Barnidge

and Within talk fair about that compared Can out, the really know to school a it academic made the the only getting maybe you for about between it access vein, what meeting around for you've return maybe a you now, point urban, and been told, teachers supplemental. on current the We're this relates and X year. to months educating physical schools to states, agents pre-pandemic expected differs year from year. to this, with I fall, right rural as academic as

Marita Zuraitis

question question it. question, and lots, and where Yes, a time accessed kind I this company, tools they the today. not talk our certainly relates ourselves although various and ask about levels platforms, ways and this access could, as time, I'm that of think employees, and first, across company, footprint pandemic, make in new and environment, of educator of support adapted that we it's proud an we They a else for during to like think just And we a built a clients. in they new a agents, did Access about about great as is new have agents creative. our how it's our we what work, the one just we new magnifies practices. it anywhere always parking we us, period. mean, to found got everybody this their I to our educators sales When really all tested

allowing needed it solutions forward, we're in I signs we us student that our when not during pandemic, with the improvements they had And pandemic. know back. platform were are to districts access of, past, the our we us improved the what what sell supplemental where did of we the lot in a educators getting during move Section have they environment. we platforms. with spent school physicality how during lot. robust their ability the virtual the to year benefit for I and of to value we changes supporting not parking of relationships and through about the the think in we combined know retirement will them our and allowed the think supporting I made When of the the all even to in And did much only our there Section again, we strengthened us. with groups, of as platform, to used is So XXX a about, post-vaccine access world? it's to have this. the through work, there example, really feel a of I seeing through the large our various us pandemic XXX stronger the change in we They we that were our be say, that outside, and more schools think I going We proposition, allowed do what's And Section ready access? we past, I much think going second through small and the pandemic this these that's for internet all many case. districts the platform transformed for We many to in don't lot mean Is do platform, needs, to are lived no we And access. that for folks be of finding actually in things and we technology, We the be there settings. when company, schools. products able time with We, a were needed degrees they meeting loan those because XXX half permanent

Operator

Thank you.

Matt from JMP. comes question Next of Carletti

Matt Carletti

you've follow to growth California pace activities of real one about kind York terms reopening. state-by-state split that any like the are and I at there's level, something New to granular on states on of been seeing, just on geographies there's reopen, been future? in more as end, takeaways in maybe you able basis, Have returning, see the kind tells places others. a observe from, observations if you're general Marita, guys and the been and Texas a of, individual on, us was and hoping on at the anything wondering Florida on able which to a

Marita Zuraitis

it's fast do only on space opens hybrid And slow We're and I to in happening the that and is work providing back other people it our And appropriate to the world can we're cases some We're world the to we state-by-state not cases, a generally, the It's humans, supplemental basis, take is same. in environment, in in to will returning like seeing I the in pretty odd back been think just unique a do but What some And probably opportunities Hesitancy. reopening think mirrors well. following up When in going think office, situation toe mean tools in, and it? their going respond all Yes, that how places, cases, district-by-district whether How time, as be that gradual, and you places, the places, see I how pushing this game. to is using clearly and live you gradual get there? basis. the agents in we it's some it in the Whether world take it's pretty we're guidelines. and same to techniques the different incentive fast other get be in. time. happen. stick situations. be in our we've on And you think a right? other do? here. may bit agents in help little and it to we're cases how quick, advantage, it thing for in programs We're hard, many a that's It's about I space, will in, the I do it of mean appropriate.

mistake, about are no interaction, in process, a transition when trends we're And physical you've be happening. The have how do it's got that We and you you have make how careful. sales and that March but includes to back, seeing real. April very thoughtful been it, you

happen. calendar. in fast, have be I in call, gradual. to some to it's a, and expected to what back other we And to I be them going places they're think We school places, think we going But

back be it's will to smaller, year, have are and back activities. little we our We be bit this to going a school different groups although to events. a doing bit little school And

Our will summer? our We've that typically look summer what normal agents little are pent-up see a regular game. know about the we're and a total, be and we that get in momentum maybe year we a a to we just wouldn't see will, but our like with wasn't in feel So move trends around we're going the about, like last back over it's year, was in summer? going in few in probably Will summer a lot the little ready next some bit in demand the the data, this to about year talked we said be it good seeing months, clearly a encouraged the not data. a it's that we that year, trajectory soft, are you to And the and typical typical but seeing.

Matt Carletti

at the the companies I we've other And it's uptick quick, want one, across Horace question not to mortality ask in and know then quarter. you life a trends other on industry. it specific one the just, the to Mann, seen

completely that. what might driving Just COVID? thoughts unrelated you be might thoughts if there? you have have your a Just Is any there there? COVID Is book, something impact to it for on, any

Bret Conklin

it our make can, well. think Let you we've a described color, me he of and it doesn't trend, an uptick up, seen but take little bit a a add if and One wants in to I Mike mortality. little certainly quarter

last before. Yes, had haven't I little we elevated a XXXX compared of strong a nothing think, that year, bit recall, as you ahead had we're an to that very but running seen had what we we and anticipated, year. we level,

the again, today. what Here impact seen COVID is very small, with we've

any to that? you to add So, want other color Mike, if

Mike Weckenbrock

you think I it. covered

before, the duration's averaging related And claims, our small. around COVID around as is for with first quarter. even think, still volume, mentioned to XX you years face average amounts I relatively XX,XXX,

permanent it, to positive see we continue normal seeing a And that are to but of a So, end, return signs shift. monitor not we shift. April, monitor, to in permanent and continue we don't to we'll

Marita Zuraitis

out although but there's the amount commented intellectually not as know may know data, you putting although off The talked the relates what relates you only potentially could someone and impact amount and that or April it the number trends not test way that putting a continue seeing seeking indicated in we know it. and we We're look to a death, our seeing be other yet not what numbers. other there, also are it had the we've fair of Mike where talk might the about COVID have as in be and discussion are is and into we thing there I'd in you mortality the it the quarter, of off did add whether I we underlying at people we're cause treatment, But a April. its COVID, it about Bret that fair in look as conversation of think be it finding treatment, lack in or not of potential right. but and saw folks April, we to of in numbers both data, some behind not seeing When

feel it's in expect confident, months, pretty So the their have record actuaries track it what The we in four data. business. not And look we through when of a they have quarter at we this outside. long unusually

Operator

The question comes next of KBW. from Shields Meyer

Meyer Shields

expecting a about been I about getting questions on some severity what and talked property we've auto we influencing supply you're seeing you're the what side. and side, on little guess chain So bit the

Marita Zuraitis

supplies the a of in cost Mark's bit up I'm bit little broke question, had about what a it there, chain, space didn't you there. we've you asked Yes, benefit, and we're and supply of he you assuming auto the Meyer. talking about lumber for But building heard and and little property about hear seeing case in the you're asked and

So over I'll has turn any see it and to additional comments. if Mark he

Mark Desrochers

The more you've is to lumber-related XX% the of over costs, costs doubled thing remember overall costs got generally speaking, seeing probably we're past definitely of about that within than the absolutely the are homeowners. our year. lumber No, impact

that replacement costs. So it's with but time we've a that impact same there's like guard inflation significant rising we to fact the at the deal things adjusted have

Meyer Shields

small A of about talk can building you on questions. couple of that a have recruitment expenses? impact One, supplementals, for other pipeline observable when really an operating

Marita Zuraitis

Meyer. sorry, I'm

we You question. broke and beginning hear the up that of couldn't

try to want us? You again for

Meyer Shields

of is the to remaining quarters meaningfully year? expected three impact supplemental the So expenses recruitment, that over a

Marita Zuraitis

you think recruitment? I supplemental said

Meyer Shields

Yes.

Marita Zuraitis

question? the that Was

Meyer Shields

It is, yes.

Marita Zuraitis

little up a of sorry. breaking agents? mean you were there you Do I'm bit.

Meyer Shields

of is the clearly which strategy… building pipeline a had right about You talked recruitment,

Marita Zuraitis

war And quarter But that's the us. we Again, add fruit and quarter, would What them pandemic really and up we back decent for to get are it the put environment. that supplemental, Horace can made with the right? is to were and use about attention time of the now. this in resources was this get we up, plant, us environment in was and lot did for of spent success think people and the you first cycle. their thought it XXXX, recruitment training, our first amount certainly our recruitment makes previously get people our full hire we traditional I for lot NTA recruiting. some a throughout first a Mann in fair now, in our haven't time know the back XXXX A integration, their value agents ready talent best You bear recruiting do conscious that quarter rest only is We agents talking had that, the ramping got it we was full accelerate our to in breaking well I are imagine pipeline proposition. be it why decision in the licensing, for into worked about look both we because resources it a sense a places pipeline, of don't and internally and wise of in the in beginning in their and but agents agency do into that to to would environment organic trying saw pivot spoken difficult. to where

Meyer Shields

and final your market this then the target education question know And enough I would of of to world ask the desired to don't paraprofessionals addition intelligently, about but the base? add meaningfully

Marita Zuraitis

other survey or the question questions survey that that it's we asked. Whether answers to

asking knew. this segment connecting base, more learning thing questions, that well Another these we even think in our did with already educator we environment them about really was I the

in combined with public of the amount time that I pandemic, now, getting about now, extend extended our pre-K certainly target, the to a think target, will. our of educators and and environment expanded mean we of the database, into colleges community about educators, to know we how that we being ability post we're our would increasing amount to the look we have opportunity. years, think this X in with pre-K look does certainly certainly public political and public the amount employees of amount fair to thinking spending and but increase that, where and potential I potentially you education add I if certainly bullseye could XX, of think to we

So clearly, yes.

Operator

our James. comes Alex Raymond from And question Bolton next of

Alex Bolton

calling I'm of behalf okay. on sure can in to hear me you Want Greg Peters. make

Marita Zuraitis

can. We

Alex Bolton

and go want I pandemic. COVID driving persisting possibly to kind conversations of to about habits the beyond back frequency

it is to just as think As it right may as be work-from-home I it road, due that cars initiatives could the way industries. persist on be work about about think not a a from in lower educators, to the volume of seems home? able to other well or Is

Marita Zuraitis

commuting to miles about frequency the back think patterns be that change. little The not the I benefit we I'll will would From the that did fact my and a comment. from that roads talk congested. fact beginning, type insulated very but less the go immune driven of

the think hybrid to out rest to I stretching are and typically the the of environments, people of rest of changing world the workday or work So does amount return. world when the on the going change educators go road that the

to or see So believe don't expect make mistake, of do we there that, gradual about we we add no we to return normal frequency frequency. permanency at semi-permanency if that will Mark? do know when But think least a I trends. have there some element you anything more to is

Mark Desrochers

mileage accident Yes, what is, as we add I our to educators at today, would frequency. track compared we look

frequency to yet, levels, trails then. back Our not still but mileage is pre-pandemic accident quite the pretty close change

are whom, the is think hybrid every which volume, day. teachers evidence just often in may be they the mileage as that And spouses there spouses other even as to type students frequency is has fact in Their to remember they're are the environment, professional less of teachers those it and going to an I there's that the involved many every either. hasn't, that think work day, I if may indicator accident teachers, normal, So environment be back have returned our our be quite our much but in are driving while where traffic a of not going and have to even less also accidents. you of forth teachers

both frequency that, the we playing of into So equation. those of have impacts kind

Alex Bolton

kind my of thinking past maybe lapse if over improving then, about process pandemic? the beyond into persistency? would help, just And to how up thought maybe initiatives clearing be couple Does you those is helping appreciate process, it the about loyalty, persistency, do or seems quarters, of I there. retention, cross the to now clientele play that was selling, virtual sales maybe maybe that I think

Marita Zuraitis

we the us. customers I and we We try you know connect what about the our the increase so, did in earlier When tend consistent, and auto. to auto this fair we see that for And question also may question. think to I We loyal. a not Yes, auto think to to also give market property and reasons that auto had retention, follow commentary are appreciate retention, to pretty their leave sales. be shopping is does them earlier, tend

group a of people. retention see like would we as we The we is So loyal when an expect follow of But this some eventually helpful. customers, in those new certainly and property is March April, uptick did that would well.

Another that think Many retirement Horace comment in is, plan. through retirement saw April. we about clients with Mann what cross uptick the their And a start we the in can And people are eventual out. certainly year. those through relationship

Horace that well. with those a ability And have didn't to sell Mann also supplemental supplemental products the NTA. products client have in to We base as any maybe customers have we previously

helped a we've some tools some more and anxious in do whole of to industry have of we're least could that that time cross-sells. could educators affect a than And proposition the think it perspective, took cross-sell opportunity really that may better that forward way. the but have. of did time So things at we put robust and advantage taking to those taking the pandemic this frequency we activities from to to temporarily affect the built, we I And forward. homogeneous suspend looking We cross-sell of tend speaks that this our and during we the value niche the

Alex Bolton

re-insurance reinsurance. anything maybe if comments then have catastrophe and else lastly, have retention, towards any could counted catastrophe just the And just that if you there's there. wondering or on I'm catastrophe

Marita Zuraitis

to first the in didn't retention events that in would we our have first quarter any close mean come level the quarter. -- You hitting

Operator

from Barnidge Piper a have follow-up We question John Instructions] from [Operator Sandler.

John Barnidge

sense to could trying comment made non-educator's there is those spouses much spouses. way XX%, that PIFF remain. to Mark of a at slept somewhat auto dimension what are any percent of that actually benefit are just I how educators about but frequency like obviously permanently non-educators

Marita Zuraitis

can We those you get numbers.

we going full we the going makeup have you household policies have. We by can differ many It's district, dive data multi-car a differ that state. we have We household. how the on clear to makeup. We that. but know and deep It's yes, give to by on know of

Heather Wietzel

Nick, I think for if Q&A, we're the I'm set not mistaken.

Operator

Q&A the in is No queue, Wietzel to for back closing other questioners all so we'll remarks. Yes. are done. go Heather

Heather Wietzel

in everyone us to you Thank for to Great. new and any today. questions. if out there's joining months reach free talking coming the feel look I forward

Operator

you Thank Conference today's presentation. is now concluded. attending for

now may You disconnect.

Horace Mann Educators (HMN) 8 May 212021 Q1 Earnings call transcript