Horace Mann Reports Second Quarter 2018 Net Income of $0.14 Per Share and Core Earnings of $0.13 Per Share*

• Net income and core earnings* improved for both second quarter and six months
• Second-quarter combined ratio of 114.7% included 16 percentage points of catastrophe losses; underlying auto loss ratio* improved 1.1 points compared to the prior year quarter
• 6% growth in assets under management in Retirement; strong persistency, sales, and contract deposits
• 49% increase in second-quarter Life sales reflecting continued sales momentum
• Full-year 2018 guidance updated to reflect first-half weather-related losses

SPRINGFIELD, IL / ACCESSWIRE / August 2, 2018 / Horace Mann Educators Corporation (NYSE: HMN) today reported financial results for the three and six-month periods ended June 30, 2018:

Horace Mann Financial Highlights

N.M. - Not meaningful.
* These measures are not based on accounting principles generally accepted in the United States (non-GAAP). They are reconciled to the most directly comparable GAAP measures in the Appendix to the Investor Supplement. An explanation of these measures is contained in the Glossary of Selected Terms included as an exhibit in the Company's reports filed with the Securities and Exchange Commission.

"Horace Mann's second-quarter and six-month core earnings remained well ahead of last year as we continue to see progress on our strategy to drive long-term profitable growth and improve return on equity," noted Horace Mann President and CEO Marita Zuraitis. "For example, this quarter we saw further improvement in the underlying auto loss ratio, growth in Retirement assets under management and a double-digit increase in Life sales. At the same time, we continue to make strategic investments across all segments to ensure we have the products, distribution and infrastructure in place to be the company of choice to meet our educators' financial needs both today and in the future."

"In light of the significant first-half weather-related losses in both property and auto, we are revising our estimate of full-year 2018 core earnings to between $1.90 and $2.10 per diluted share," Zuraitis said.

Property and Casualty Segment Shows Underlying Improvement in Typically Heavy Cat Quarter
(All comparisons vs. same period in 2017, unless noted otherwise)

For the second quarter of 2018, Property and Casualty written premiums* increased 3.0%, driven primarily by rate actions, which resulted in an increase in the average premium per policy for both auto and property. Policy retention continues to be stable with auto and property policy retention rates for the current quarter at 82.6% and 88.0%, respectively.

The combined ratio for the second quarter improved 3.8 percentage points. Total pretax catastrophe losses were $26.8 million in the current quarter compared to $32.4 million in the prior year period.

The improvement in the reported combined ratio for the second quarter was primarily due to lower auto and property catastrophe losses versus last year, as well as a 1.1 point improvement in the underlying auto loss ratio*, reflecting the impact of rate actions and continued profitability initiatives. The underlying property loss ratio* increased 1.1 points, in part due to elevated non-catastrophe weather-related losses.

For the six months, written premiums rose 3.6% and the combined ratio improved by 5.2 points.

Retirement Segment Assets Under Management Up 6% From Year Ago
(All comparisons vs. same period in 2017, unless noted otherwise)

For the second quarter of 2018, Retirement net income excluding DAC unlocking increased 18.3%. Higher net investment income, an increase in fee-based product income and the lower federal income tax rate offset higher operating expenses. Six-month net income excluding DAC unlocking rose 8.9%.

The annualized net interest spread on fixed annuity assets under management of $4.7 billion for the second quarter of 2018 was 181 basis points, primarily benefiting from an elevated level of prepayment activity.

Retirement assets under management increased 6.3% compared to a year ago, and total cash value persistency remained strong at 94.6% for variable annuities and 94.4% for fixed annuities.

Total Retirement sales deposits* declined 5.0% for the quarter and 4.8% for the six months as lower traditional annuity product sales were partially offset by a continued increase in asset flows related to fee-based mutual fund offerings.

Sales deposit activity related to the Retirement Advantage® mutual fund products, as well as other mutual fund offerings, reached $18.6 million in the current quarter as compared to $10.0 million in the prior year period. Annuity deposits were down 14.2% for the quarter and 15.0% for the six months due to lower sales of single premium annuity products.

Life Segment Reports Double-Digit Sales Increases
(All comparisons vs. same period in 2017, unless noted otherwise)

Life sales* increased 48.6% for the second quarter and 16.7% year-to-date, reflecting an increased emphasis on meeting the needs of the under-insured educator market through enhancements in agent support and training.

Life net income increased 5.4% in the second quarter and 2.1% in the first six months, benefiting from a lower federal income tax rate. Second-quarter mortality costs compared favorably with actuarial assumptions. Life persistency of 95.1% was comparable to 12 months earlier.

Net Investment Income Up Over Prior Year
(All comparisons vs. same period in 2017, unless noted otherwise)

While annuity asset balances in the Retirement segment continue to grow, overall investment results continue to be impacted by the low interest rate environment of recent years. Second-quarter total net investment income increased 5.5% primarily due to a higher level of prepayment activity and favorable returns on alternative investments.

Net unrealized investment gains were down compared to a year ago, largely because of rising interest rates and wider credit spreads.

Capital Management Strategy Remains Unchanged

As of June 30, 2018, $27.8 million remained authorized for future share repurchases under the share repurchase program.

Quarterly Webcast

Horace Mann's senior management will discuss the company's second quarter financial results with investors and analysts on August 3, 2018 at 9 a.m. Eastern Time. The conference call will be webcast live at investors.horacemann.com and archived later in the day for replay.

About Horace Mann

Horace Mann Educators Corporation (NYSE: HMN) is the largest financial services company focused on providing America's educators and school employees with insurance and retirement solutions. Founded by Educators for Educators® in 1945, the company is headquartered in Springfield, Illinois. For more information, visit horacemann.com.

Safe Harbor Statement and Non-GAAP Measures

Statements included in this news release that are not historical in nature are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties. Horace Mann is not under any obligation to (and expressly disclaims any such obligation to) update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to the company's Quarterly Report on Form 10-Q for the period ended March 31, 2018 and the company's past and future filings and reports filed with the Securities and Exchange Commission (SEC) for information concerning important factors that could cause actual results to differ materially from those in forward-looking statements. Information contained in this press release include measures which are based on methodologies other than accounting principles generally accepted in the United States (GAAP). Reconciliations of non-GAAP measures to the closest GAAP measures are contained in the Appendix to the Investor Supplement and additional descriptions of the non-GAAP measures are contained in the Glossary of Selected Terms included as an exhibit to the company's SEC filings.

Contact information:

Heather J. Wietzel
Vice President, Investor Relations
217-788-5144
investorrelations@horacemann.com

HORACE MANN EDUCATORS CORPORATION
Financial Highlights (Unaudited)
($ in Millions, except per share data)

N.M. - Not meaningful

(A) Based on trailing 12-month net income and average quarter-end shareholders' equity.
(B) Based on trailing 12-month core earnings and average quarter-end shareholders' equity which has been adjusted to exclude the fair value adjustment for investments, net of the related impact on deferred policy acquisition costs and applicable deferred taxes.
(C) Ending shares outstanding were 41,009,999 at June 30, 2018 and 40,668,847 at June 30, 2017.
(D) Net of the related impact on deferred policy acquisition costs and applicable deferred taxes.

HORACE MANN EDUCATORS CORPORATION
Statements of Operations and Supplemental Consolidated Data (Unaudited)
($ in Millions)

N.M. - Not meaningful

(A) Corporate and Other includes interest expense on debt and the impact of net investment gains and losses and other Corporate level items. The Company does not allocate the impact of corporate level transactions to the insurance segments consistent with how management evaluates the results of those segments. See detail for this segment on page 4.

HORACE MANN EDUCATORS CORPORATION
Supplemental Business Segment Overview (Unaudited)
($ in Millions)

N.M. - Not meaningful

(A) Includes allocated loss adjustment expenses and, when applicable, catastrophe reinsurance reinstatement premiums.

HORACE MANN EDUCATORS CORPORATION
Supplemental Business Segment Overview (Unaudited)
($ in Millions)

N.M. - Not meaningful

(A) The Corporate and Other segment includes interest expense on debt and the impact of investment gains and losses and other corporate level items. The Company does not allocate the impact of corporate level transactions to the insurance segments consistent with how management evaluates the results of those segments.

HORACE MANN EDUCATORS CORPORATION
Supplemental Business Segment Overview (Unaudited)
($ in Millions)

N.M. - Not meaningful

SOURCE: Horace Mann Educators Corporation