Horace Mann's Net Income Soars 95% on Strong Revenue Growth

TL;DR

**Horace Mann is crushing it, with net income nearly doubling, making it a solid bet for long-term growth.**

AI Summary

Horace Mann Educators Corporation reported a significant increase in net income for the nine months ended September 30, 2025, reaching $125.9 million, a substantial rise from $64.6 million in the same period of 2024. Total revenues also grew to $1,266.6 million for the nine months ended September 30, 2025, up from $1,186.2 million in 2024, driven by increased net premiums and contract charges earned of $911.2 million (up from $845.2 million) and net investment income of $346.3 million (up from $326.8 million). The company's total assets expanded to $15,489.7 million as of September 30, 2025, from $14,487.8 million at December 31, 2024, primarily due to an increase in total investments to $7,282.2 million and Separate Account variable annuity assets to $4,088.3 million. Long-term debt increased significantly to $842.9 million from $547.0 million, partly due to the issuance of $296.0 million in 2025 Senior Notes due 2030. Shareholders' equity improved to $1,441.3 million from $1,287.5 million, benefiting from net income and a reduction in net unrealized investment losses on fixed maturity securities. The company also experienced an immaterial out-of-period correction of an error related to private debt securities, which decreased net investment income by $10.2 million pre-tax in the second quarter of 2025.

Why It Matters

This strong performance by Horace Mann Educators Corporation signals robust operational health and effective investment strategies, which could attract more investors seeking stability in the insurance sector. The significant increase in net income and revenues suggests the company is successfully expanding its reach within the K-12 education market, potentially impacting competitors by capturing greater market share. For employees, sustained growth could mean job security and opportunities, while customers might benefit from a financially stable insurer. The issuance of $296.0 million in 2025 Senior Notes due 2030 indicates strategic capital deployment, which could fuel further growth and innovation, strengthening its competitive position.

Risk Assessment

Risk Level: medium — While net income and revenues are up, the company's long-term debt increased significantly by $295.9 million to $842.9 million as of September 30, 2025, from $547.0 million at December 31, 2024, partly due to new senior notes. Additionally, net unrealized investment losses on fixed maturity securities, though improved, still stand at $250.8 million, indicating exposure to market fluctuations.

Analyst Insight

Investors should consider Horace Mann's strong financial performance, particularly the 95% increase in net income, as a positive indicator for potential investment. However, they should also monitor the company's increasing long-term debt and its impact on future financial flexibility, alongside the ongoing management of investment portfolio risks.

Financial Highlights

debt To Equity

0.58

revenue

$1,266.6M

operating Margin

N/A

total Assets

$15,489.7M

total Debt

$842.9M

net Income

$125.9M

eps

$1.42

gross Margin

N/A

cash Position

$46.7M

revenue Growth

+6.8%

Revenue Breakdown

Key Numbers

• $125.9M — Net Income (Increased from $64.6M in 2024 for the nine months ended September 30, 2025, representing a 95% increase.)
• $1,266.6M — Total Revenues (Increased from $1,186.2M in 2024 for the nine months ended September 30, 2025, showing a 6.8% growth.)
• $842.9M — Long-term Debt (Increased from $547.0M at December 31, 2024, reflecting new financing activities including $296.0M from 2025 Senior Notes.)
• $1.42 — Basic Net Income Per Share (Increased from $0.83 in Q3 2024 to $1.42 in Q3 2025, indicating strong earnings growth per share.)
• $5,666.5M — Fixed Maturity Securities (Fair Value) (Increased from $5,387.9M at December 31, 2024, showing growth in the investment portfolio.)
• $250.8M — Net Unrealized Investment Losses (Reduced from $357.4M at December 31, 2024, indicating an improvement in investment portfolio valuation.)
• $4,088.3M — Separate Account Variable Annuity Assets (Increased from $3,708.8M at December 31, 2024, reflecting growth in retirement product offerings.)
• $423.3M — Net Cash Provided by Operating Activities (Increased from $258.6M in 2024 for the nine months ended September 30, 2025, demonstrating strong operational cash generation.)

Key Players & Entities

• HORACE MANN EDUCATORS CORP /DE/ (company) — registrant
• New York Stock Exchange (regulator) — exchange for common stock
• SEC (regulator) — Securities and Exchange Commission
• $125.9 million (dollar_amount) — net income for nine months ended September 30, 2025
• $64.6 million (dollar_amount) — net income for nine months ended September 30, 2024
• $1,266.6 million (dollar_amount) — total revenues for nine months ended September 30, 2025
• $1,186.2 million (dollar_amount) — total revenues for nine months ended September 30, 2024
• $842.9 million (dollar_amount) — long-term debt as of September 30, 2025
• $547.0 million (dollar_amount) — long-term debt as of December 31, 2024
• $296.0 million (dollar_amount) — proceeds from issuance of 2025 Senior Notes due 2030

FAQ

Risk Factors

• Investment Portfolio Volatility [medium — financial]: The company holds significant investments in fixed maturity and equity securities. Fluctuations in market values, as indicated by the net unrealized investment losses on fixed maturity securities ($250.8M as of Sep 30, 2025), can impact shareholders' equity and investment income.
• Insurance Regulatory Environment [medium — regulatory]: As an insurance holding company, Horace Mann is subject to state and federal regulations governing insurance operations, solvency, and consumer protection. Changes in these regulations could increase compliance costs or restrict business activities.
• Out-of-Period Correction [low — operational]: An immaterial out-of-period correction related to private debt securities reduced net investment income by $10.2 million pre-tax in Q2 2025. While deemed immaterial, such errors highlight potential weaknesses in internal controls over financial reporting.
• Interest Rate Sensitivity [medium — market]: Net investment income is influenced by interest rate environments. While net investment income grew by 6.0% to $346.3M for the nine months, sustained low or volatile interest rates could pressure future investment income.
• Increased Leverage [high — financial]: Long-term debt increased significantly to $842.9M from $547.0M, largely due to the issuance of $296.0M in Senior Notes. This increased leverage raises financial risk and debt servicing obligations.

Industry Context

Horace Mann operates in the specialized market of providing insurance and retirement products to educators and their families. The industry is characterized by stable demand for core insurance products but faces competition from larger, diversified financial institutions. Trends include a growing need for retirement solutions and evolving regulatory landscapes impacting product offerings and capital requirements.

Regulatory Implications

As a regulated insurance entity, Horace Mann must adhere to stringent capital adequacy requirements and consumer protection laws. Changes in accounting standards or solvency regulations could necessitate adjustments to its financial strategies and product development. The company's focus on a specific demographic (educators) may also subject it to unique regulatory considerations.

What Investors Should Do

1. Monitor the impact of increased long-term debt ($842.9M) on financial flexibility and interest expense.
2. Analyze the performance drivers of the growing Separate Account variable annuity assets ($4,088.3M) and their contribution to profitability.
3. Assess the company's ability to manage investment portfolio volatility, evidenced by the reduction in net unrealized losses on fixed maturity securities.
4. Evaluate the sustainability of the strong net income growth ($125.9M, up 95%) and its correlation with revenue expansion.
5. Observe any further developments or disclosures regarding the out-of-period correction and internal control effectiveness.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported significant growth in net income ($125.9M vs $64.6M) and total revenues ($1,266.6M vs $1,186.2M), indicating strong operational performance.
• 2025-06-30: Second quarter of 2025 — Company recorded an immaterial out-of-period correction reducing net investment income by $10.2M pre-tax, highlighting a minor accounting error.
• 2025-01-01: Issuance of 2025 Senior Notes due 2030 — Raised $296.0M, contributing to the significant increase in long-term debt to $842.9M, impacting the company's leverage.
• 2024-12-31: Year ended December 31, 2024 — Baseline for comparison; total assets were $14,487.8M and long-term debt was $547.0M.

Glossary

Net premiums and contract charges earned

The portion of insurance premiums and annuity contract charges recognized as revenue during a period, after accounting for reinsurance and changes in unearned premiums. (A primary driver of revenue for Horace Mann's insurance and retirement businesses.)

Net investment income

Income generated from the company's investment portfolio, including interest, dividends, and realized gains/losses on investments, net of investment expenses. (A significant component of Horace Mann's total revenue, particularly for its annuity and life insurance products.)

Separate Account variable annuity assets

Assets held in separate accounts that fund variable annuity contracts. These assets are invested according to the contract holder's choices and their value fluctuates with market performance. (Represents a growing segment of the company's business, particularly in retirement products.)

Fixed maturity securities

Investments in debt securities such as bonds, notes, and debentures, which have a stated maturity date. (A major component of Horace Mann's investment portfolio, subject to interest rate and credit risk.)

Accumulated other comprehensive income (loss)

A component of shareholders' equity that includes unrealized gains and losses on investments, foreign currency translation adjustments, and pension plan adjustments that have not yet been realized in net income. (Reflects the impact of market fluctuations on the company's investment portfolio, notably the reduction in net unrealized investment losses.)

Out-of-period correction

An adjustment made to correct an error that occurred in a prior accounting period but was discovered and corrected in the current period. (Indicates a minor accounting error that affected prior period financial statements, though deemed immaterial.)

Year-Over-Year Comparison

Compared to the prior year period, Horace Mann Educators Corporation has demonstrated robust growth. Total revenues increased by 6.8% to $1,266.6M for the nine months ended September 30, 2025, while net income saw a substantial surge of 95% to $125.9M. This improved profitability is reflected in basic net income per share, which rose to $1.42 from $0.83. The company also strengthened its balance sheet with increased total assets to $15,489.7M and a reduction in net unrealized investment losses. However, long-term debt has significantly increased to $842.9M, up from $547.0M, indicating a higher leverage position.

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value HMN New York Stock Exchange

Filing Documents

• hmn-20250930.htm (10-Q) — 4171KB
• a93025ex311.htm (EX-31.1) — 11KB
• a93025ex312.htm (EX-31.2) — 11KB
• a93025ex321.htm (EX-32.1) — 7KB
• a93025ex322.htm (EX-32.2) — 7KB
• q32025ex991-glossaryofterms.htm (EX-99.1) — 38KB
• hmn-20250930_g1.jpg (GRAPHIC) — 50KB
• hmn-20250930_g2.jpg (GRAPHIC) — 66KB
• hmn-20250930_g3.jpg (GRAPHIC) — 48KB
• hmn-20250930_g4.jpg (GRAPHIC) — 61KB
• 0000850141-25-000008.txt ( ) — 21154KB
• hmn-20250930.xsd (EX-101.SCH) — 74KB
• hmn-20250930_cal.xml (EX-101.CAL) — 127KB
• hmn-20250930_def.xml (EX-101.DEF) — 457KB
• hmn-20250930_lab.xml (EX-101.LAB) — 911KB
• hmn-20250930_pre.xml (EX-101.PRE) — 717KB
• hmn-20250930_htm.xml (XML) — 5590KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Page

Consolidated Financial Statements

Item 1. Consolidated Financial Statements Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 1 Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 2 Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 3 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 4

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 1 - Basis of Presentation and Significant Accounting Policies 5 Note 2 - Investments 6 Note 3 - Fair Value of Financial Instruments 12 Note 4 - Short-Duration Insurance Contracts 19 Note 5 - Long-Duration Insurance Contracts 20 Note 6 - Reinsurance 33 Note 7 - Segment Information 34 Note 8 - Accumulated Other Comprehensive Income (Loss) 38 Note 9 - Supplemental Consolidated Cash and Cash Flow Information 39 Note 10 - Contingencies and Commitments 39 Note 11 - S ubsequ ent Eve nts 40

Management's Discussion and Analysis of Financial Condition

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 40

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 62

Controls and Procedures

Item 4. Controls and Procedures 62

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 62

Risk Factors

Item 1A. Risk Factors 63

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 63

Other Information

Item 5. Other Information 63

Exhibits

Item 6. Exhibits 64

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

I Consolidated Financial Statements

ITEM 1. I Consolidated Financial Statements HORACE MANN EDUCATORS CORPORATION CONSOLIDATED BALANCE SHEETS ($ in millions, except share data) September 30, 2025 December 31, 2024 (Unaudited) Assets Investments Fixed maturity securities, available for sale, at fair value (amortized cost, net 2025, $ 5,985.5 ; 2024, $ 5,842.5 ) $ 5,666.5 $ 5,387.9 Equity securities at fair value, (cost $ 56.2 and $ 78.8 ) 44.3 66.5 Limited partnership interests (carried under fair value option, 2025, $ 33.5 ; 2024, $ 28.9 ) 1,137.8 1,121.3 Policy loans 138.5 140.8 Short-term and other investments 295.1 199.9 Total investments 7,282.2 6,916.4 Cash 46.7 33.1 Restricted cash 255.8 5.0 Deferred policy acquisition costs 358.3 347.2 Reinsurance balances receivable 423.1 424.8 Deposit asset on reinsurance 2,402.3 2,434.3 Intangible assets 145.1 155.8 Goodwill 54.3 54.3 Other assets 433.6 408.1 Separate Account variable annuity assets 4,088.3 3,708.8 Total assets $ 15,489.7 $ 14,487.8 Liabilities and Shareholders' Equity Policy liabilities Future policy benefit reserves $ 1,636.8 $ 1,622.8 Policyholders' account balances 5,092.0 5,100.3 Unpaid claims and claim expenses 564.1 569.2 Unearned premiums 378.4 344.2 Total policy liabilities 7,671.3 7,636.5 Other policyholder funds 1,046.2 995.7 Other liabilities 399.7 312.3 Long-term debt 842.9 547.0 Separate Account variable annuity liabilities 4,088.3 3,708.8 Total liabilities 14,048.4 13,200.3 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, 2025, 67,323,432 ; 2024, 67,032,164 0.1 0.1 Additional paid-in capital 535.8 525.2 Retained earnings 1,630.2 1,548.2 Accumulated other comprehensive income (loss), net of tax: Net unrealized investment losses on fixed maturity securities ( 250.8 ) ( 357.4 ) Net reserve remeasurements attributable to discount rates 79.4 110.9 Net funded status of bene

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - Basis of Presentation and Significant Accounting Policies

Business

Business Horace Mann Educators Corporation is a holding company for insurance subsidiaries that market and underwrite personal lines of property and casualty insurance products (primarily personal lines of auto and property insurance), life insurance products, retirement products (primarily tax-qualified fixed and variable annuities), individual supplemental insurance products (primarily cancer, heart, hospital, supplemental disability and accident coverages), and group benefit products (primarily short-term and long-term group disability, and group term life coverages), primarily to K-12 teachers, administrators and other employees of public schools and their families (collectively, HMEC, the Company or Horace Mann). The Company conducts and manages its business in four reporting segments: (1) Property & Casualty, (2) Life & Retirement, (3) Supplemental & Group Benefits and (4) Corporate & Other. Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in conformity with GAAP, but are not required for interim reporting purposes, have been omitted. These Consolidated Financial Statements and Notes thereto should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Part II - Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full year. The accompanying Consolidated Financial Statements and Notes thereto are unaudited and reflect all adjustments (generally consisting only of normal recurring accruals) which are, in the opinion of

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