Horace Mann announces second-quarter catastrophe losses between $41 and $43 million, pretax, as weather-driven losses rise across industry

Horace Mann Educators Corporation (NYSE:HMN) today announced it expects second-quarter 2023 core EPS in the range of $0.01 to $0.03. Continued strong performance of the company’s Worksite and Life & Retirement businesses offset the impact of outsized weather activity across the country, which was also a primary factor in continued elevated auto loss frequency.

Second-quarter catastrophe losses are now expected to be between $41 million to $43 million, pretax. In total, there were 19 events designated as catastrophes by Property Claims Services (PCS) in this year’s second quarter, including multiple severe convective storms across the Midwest and Texas in June. Catastrophe losses are expected to contribute 26 to 27 points to the second-quarter combined ratio.

“Across the country, weather events are increasing in frequency and size, resulting in record levels of catastrophe losses for the industry,” said President & CEO Marita Zuraitis. “I am proud of our team members who continuously deliver on Horace Mann’s promise to help affected educator customers at the ‘moment of truth.’

“Second-quarter underlying Property & Casualty results confirm we took appropriate reserve actions in 2022 to address the emergence of the post-pandemic inflationary loss environment,” added Zuraitis. “Auto rate increases since the beginning of 2022 have reached almost 15% nationwide, and we expect the cumulative year-end impact to be near 20%. Further, we expect average renewal premiums for property to increase by 17% to 20% in 2023 due to rate increases and other actions. We will continue to address the increased weather activity through additional filed rate, product changes and enhanced modeling.

“Our expected results for the second quarter, as well our outlook, benefit from the significant revenue and earnings diversification efforts we’ve undertaken in the past five years,” Zuraitis continued. “Strong contributions from our Worksite and Life & Retirement businesses, combined with continued progress toward P&C segment profitability targets, should enable us to deliver 2023 core EPS in the range of $1.20 to $1.45. We continue to see sales momentum across our entire business and we remain confident in our long-term outlook.