Horace Mann Educators Corp (HMN) Q3 2024 Earnings Call Highlights: Strong Earnings Growth ...

GuruFocus News
4 min read

In This Article:

  • Core Earnings: $31.3 million or $0.76 per diluted share, a 73% increase over prior year.

  • Revenue Growth: Up 9% year-over-year.

  • Auto Sales Increase: 24% increase in auto sales.

  • Life Sales Increase: 14% increase in life sales.

  • 403 B Deposits: Up 9% over prior year.

  • Property and Casualty Combined Ratio: 97.9%, a 19-point improvement over prior year.

  • Catastrophe Losses: $34 million, including $22.5 million from Hurricane Helene.

  • Underlying Loss Ratio - Auto: 71.5%, an 8.2-point improvement over prior year.

  • Underlying Loss Ratio - Property: 41.4%, a 20.4-point improvement over prior year.

  • Net Written Premiums - Property and Casualty: $212 million, a 13% increase over prior year.

  • Net Written Premiums - Auto: $129 million, a 9% increase over prior year.

  • Net Written Premiums - Property: $83 million, an 18% increase over prior year.

  • Policyholder Retention - Auto: 86.6%.

  • Policyholder Retention - Property: 90.1%.

  • Life and Retirement Core Earnings: $14.8 million.

  • Supplemental and Group Benefits Core Earnings: $14.8 million, a 6% decrease.

  • Total Net Investment Income: $113 million, down 5% year-over-year.

  • Core Fixed Income New Money Yield: 5.48%.

  • Commercial Mortgage Loan Fund Contribution: $9.9 million to net investment income in the quarter.

  • Share Repurchase: 256,000 shares repurchased at a total cost of $8.5 million.

  • Annualized Return on Equity: 8.4%, a 3.4-point improvement over prior year.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Horace Mann Educators Corp (NYSE:HMN) reported a 73% increase in third-quarter core earnings per diluted share, reaching $0.76, aligning with mid-year guidance.

  • Revenues increased by 9%, with double-digit sales growth in auto, life, and individual supplemental lines.

  • The company achieved significant improvements in underlying loss ratios for both auto and property segments, with an 8.2 point and 20.4 point improvement, respectively.

  • Horace Mann Educators Corp (NYSE:HMN) maintained strong policyholder retention rates in both auto (86.6%) and property (90.1%) segments despite significant rate actions.

  • The company continues to expand its agency force and digital capabilities, resulting in a 50% increase in online quote activity.

Negative Points

  • Hurricane Helene caused $22.5 million in damages, adding 12 points to the combined ratio, although the company remained profitable.

  • The life and retirement segment saw a decrease in core earnings due to lower net interest margins.

  • The supplemental and group benefits segment experienced a 6% decrease in core earnings due to a higher blended benefits ratio.

  • Net investment income declined by 5% in the third quarter, with limited partnership portfolio income negatively impacted by some equity-related funds.

  • The company faces challenges in maintaining growth in the employer-sponsored benefits segment due to variability in case sizes.

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