Horace Mann Educators Corp. (HMN, Financial) filed Quarterly Report for the period ended 2012-06-30.
Horace Mann Educators Corporation has a market cap of $699.9 million; its shares were traded at around $17.9 with a P/E ratio of 10.1 and P/S ratio of 0.7. The dividend yield of Horace Mann Educators Corporation stocks is 3%. Horace Mann Educators Corporation had an annual average earning growth of 0.9% over the past 10 years.
The Companys 2012 annuity new business levels continued to benefit from agent training and marketing programs, which focus on retirement planning, and build on the positive, record-level results produced throughout 2011 and 2010. Total annuity sales for the six months ended June 30, 2012 increased 12.1% compared to 2011. Single premium and rollover deposits for Horace Mann annuity products increased 4.7% compared to the same period in 2011. In addition, the Companys new scheduled deposit business (measured on an annualized basis at the time of sale, compared to the reporting of new contract deposits which are recorded when cash is received) increased 8.9% compared to the first half of 2011. In the first six months of 2012, sales of third-party vendor annuity products, a relatively minor component of total annuity sales, increased notably compared to the first half of 2011. Sales of Horace Mann products by the Independent Agent distribution channel, included in the information above, decreased 19.5% compared to the prior year, a comparison impacted by current period decreases in single premium and rollover deposits. The Companys annuity sales levels in recent years have been impacted as K-12 educators respond to uncertainties regarding employment prospects during the economic recession. In situations where educator retirements increase, opportunities arise for single premium and rollover deposit business. For employed educators, uncertainty about their future employment has created challenges for new sales of scheduled deposit business.
For the first half of 2012, the Companys net realized investment gains of $10.3 million included $22.4 million of gross gains realized on security sales and calls partially offset by $12.1 million of realized losses on securities that were disposed of during the six months, primarily commercial mortgage-backed securities, as further described below, and also corporate securities to a lesser extent. There were no other-than-temporary impairment write-downs on securities in the current period. Gains realized on security disposals during the first half of 2012 included $3.5 million related to securities on which the Company had previously recognized other-than-temporary impairment write-downs.
For the three months ended June 30, 2012, the Companys net income of $13.1 million represented an improvement of $24.9 million compared to the net loss of $11.8 million recorded in the prior year, reflecting a lower level of property and casualty catastrophe losses coupled with improved underlying earnings across all three of the Companys operating segments. After-tax net realized investment gains increased by $2.7 million between periods. For the property and casualty segment, catastrophe losses were significant in the current period, although less severe than experienced in the prior year. The current period net loss of $4.1 million reflected an improvement of $21.5 million compared to a year earlier, benefitting from decreases in catastrophe costs and Florida sinkhole losses, as well as favorable development of prior years reserve development, which more than offset an increase in automobile current accident year losses. Annuity segment net income of $7.9 million for the current period increased $0.5 million compared to the second quarter of 2011, reflecting an increase in the interest margin earned on fixed annuity assets partially offset by the negative impact from the evaluation of deferred policy acquisition costs primarily due to the decline in performance of the financial markets. Life segment net income of $6.1 million increased $0.2 million compared to the prior year second quarter.
For the six months ended June 30, 2012, the Companys net income of $39.8 million represented an improvement of $25.8 million compared to the prior year, reflecting a reduction in property and casualty catastrophe losses as well as improved underlying earnings across all three of the Companys operating segments. After-tax net realized investment gains decreased by $0.7 million between periods. For the property and casualty segment, net income of $9.1 million reflected an increase of $22.3 million compared to the first half of 2011, benefitting from decreases in catastrophe costs and Florida sinkhole losses, as well as favorable development of prior years reserves, which more than offset an increase in automobile current accident year losses. Including all factors, the property and casualty combined ratio was 103.9% for the first six months of 2012 compared to 114.7% for the same period in 2011. Annuity segment net income of $19.5 million for the current period increased notably compared to the first six months of 2011, primarily reflecting an increase in the interest margin earned on fixed annuity assets. Life segment net income of $11.3 million increased $1.2 million, primarily due to lower mortality costs in the current period.
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Horace Mann Educators Corporation has a market cap of $699.9 million; its shares were traded at around $17.9 with a P/E ratio of 10.1 and P/S ratio of 0.7. The dividend yield of Horace Mann Educators Corporation stocks is 3%. Horace Mann Educators Corporation had an annual average earning growth of 0.9% over the past 10 years.
Highlight of Business Operations:
Total voluntary automobile and homeowners premium written decreased 0.1%, or $0.2 million, in the first six months of 2012. Homeowners average written premium per policy increased compared to the prior year, with the impact more than offset by a reduced level of automobile and homeowners policies in force in the current period. For the Companys automobile and homeowners business, rate changes effective during the first six months of 2012 averaged 4% and 7%, respectively, compared to 2% and 10%, respectively, during the same period in 2011. At June 30, 2012, there were 485,000 voluntary automobile and 238,000 homeowners policies in force, for a total of 723,000 policies, compared to a total of 725,000 policies at December 31, 2011 and 737,000 policies at June 30, 2011. Management believes that the Companys rate and risk mitigation actions have had a negative impact, in some locations, on its policy retention rates and its sales levels, particularly in its automobile line. Consequently, during 2011, the Company developed and began implementing state-specific pricing, underwriting and marketing initiatives designed to improve automobile new sales and retention levels.The Companys 2012 annuity new business levels continued to benefit from agent training and marketing programs, which focus on retirement planning, and build on the positive, record-level results produced throughout 2011 and 2010. Total annuity sales for the six months ended June 30, 2012 increased 12.1% compared to 2011. Single premium and rollover deposits for Horace Mann annuity products increased 4.7% compared to the same period in 2011. In addition, the Companys new scheduled deposit business (measured on an annualized basis at the time of sale, compared to the reporting of new contract deposits which are recorded when cash is received) increased 8.9% compared to the first half of 2011. In the first six months of 2012, sales of third-party vendor annuity products, a relatively minor component of total annuity sales, increased notably compared to the first half of 2011. Sales of Horace Mann products by the Independent Agent distribution channel, included in the information above, decreased 19.5% compared to the prior year, a comparison impacted by current period decreases in single premium and rollover deposits. The Companys annuity sales levels in recent years have been impacted as K-12 educators respond to uncertainties regarding employment prospects during the economic recession. In situations where educator retirements increase, opportunities arise for single premium and rollover deposit business. For employed educators, uncertainty about their future employment has created challenges for new sales of scheduled deposit business.
For the first half of 2012, the Companys net realized investment gains of $10.3 million included $22.4 million of gross gains realized on security sales and calls partially offset by $12.1 million of realized losses on securities that were disposed of during the six months, primarily commercial mortgage-backed securities, as further described below, and also corporate securities to a lesser extent. There were no other-than-temporary impairment write-downs on securities in the current period. Gains realized on security disposals during the first half of 2012 included $3.5 million related to securities on which the Company had previously recognized other-than-temporary impairment write-downs.
For the three months ended June 30, 2012, the Companys net income of $13.1 million represented an improvement of $24.9 million compared to the net loss of $11.8 million recorded in the prior year, reflecting a lower level of property and casualty catastrophe losses coupled with improved underlying earnings across all three of the Companys operating segments. After-tax net realized investment gains increased by $2.7 million between periods. For the property and casualty segment, catastrophe losses were significant in the current period, although less severe than experienced in the prior year. The current period net loss of $4.1 million reflected an improvement of $21.5 million compared to a year earlier, benefitting from decreases in catastrophe costs and Florida sinkhole losses, as well as favorable development of prior years reserve development, which more than offset an increase in automobile current accident year losses. Annuity segment net income of $7.9 million for the current period increased $0.5 million compared to the second quarter of 2011, reflecting an increase in the interest margin earned on fixed annuity assets partially offset by the negative impact from the evaluation of deferred policy acquisition costs primarily due to the decline in performance of the financial markets. Life segment net income of $6.1 million increased $0.2 million compared to the prior year second quarter.
For the six months ended June 30, 2012, the Companys net income of $39.8 million represented an improvement of $25.8 million compared to the prior year, reflecting a reduction in property and casualty catastrophe losses as well as improved underlying earnings across all three of the Companys operating segments. After-tax net realized investment gains decreased by $0.7 million between periods. For the property and casualty segment, net income of $9.1 million reflected an increase of $22.3 million compared to the first half of 2011, benefitting from decreases in catastrophe costs and Florida sinkhole losses, as well as favorable development of prior years reserves, which more than offset an increase in automobile current accident year losses. Including all factors, the property and casualty combined ratio was 103.9% for the first six months of 2012 compared to 114.7% for the same period in 2011. Annuity segment net income of $19.5 million for the current period increased notably compared to the first six months of 2011, primarily reflecting an increase in the interest margin earned on fixed annuity assets. Life segment net income of $11.3 million increased $1.2 million, primarily due to lower mortality costs in the current period.
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