Horace Mann Forecasts Increased Core Earnings for 2026
Horace Mann Educators Corporation has raised its full-year 2026 core earnings forecast, following a robust second-quarter performance where the company reported record core earnings per share of $1.17—an improvement of over 10% from the previous year. The insurance firm now projects core earnings to be in the range of $4.60 to $4.90 per share.
According to Marita Zuraitis, President and CEO, this optimistic outlook stems from solid operational results in the first half of the year and anticipated trends in the coming months. She highlighted the firm’s strategic initiatives to bolster property-and-casualty profits, expand life and supplemental benefits sales, and enhance distribution channels.
The property and casualty division experienced a 56% increase in core earnings year over year, reaching $26 million. This was attributed to an improved combined ratio, favorable weather conditions, and reduced catastrophe losses. Positive developments in reserves from prior years contributed $7 million, with a notable reduction in claims severity.
Horace Mann retained steady net written premiums totaling $212 million in this segment, with property premiums increasing by 6% due to higher average premiums and a positive sales trajectory. Emphasizing its profitability strategy, the company focused on markets with promising auto insurance returns rather than expanding policy volumes.
In the auto insurance sector, the first half of the year saw favorable trends in claims frequency due to mild weather and other factors, aligning with the company's profitability goals. The firm adjusted its full-year catastrophe-loss assumption down from $90 million to $75 million based on early-year experiences, anticipating normal patterns to resume later.
Auto household retention was near 84% for the quarter, with overall customer retention in other divisions robust, hovering around or above 90%. The company’s revenue grew by 8% compared to the previous year. Supplemental and group benefits sales surged by 44%, driven by new enhanced products, including updated cancer insurance and a paid family and medical leave benefit.
The life and retirement sectors reported core earnings of $17 million, with a 20% increase in life sales due to effective agent recruitment and training investments. While retirement plan deposits slightly declined, stable fee income and persistency supported earnings. The firm revised its combined benefit-ratio expectation for individual supplemental and group benefits to around 42%, reflecting strong growth in these segments.
The company slightly reduced its full-year net investment income expectations, estimating $465 million to $475 million, responding to the pressures of higher interest rates impacting certain investment strategies. Yet, Horace Mann’s core fixed-income portfolio continues yielding favorable results, with new money yields outperforming the existing portfolio for 18 consecutive quarters.
Acquisition plans announced in July are progressing, though they are not expected to significantly influence this year’s guidance. However, the company projects these acquisitions to be earnings-positive by 2027, enhancing earnings per share and return on equity.
Recent updates also highlighted shareholder returns, with $15 million delivered via dividends and a 10% year-over-year increase in tangible book value per share. The firm remains committed to its long-term goal of a 10% compound annual growth rate in core earnings and a sustainable return on equity between 12% and 13%. Based in Springfield, Illinois, Horace Mann focuses on insurance and retirement solutions for educators, collaborating with schools nationwide to address their distinctive needs.