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Horace Mann's (HMN) Q3 Earnings Top Estimates, Rise Y/Y

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Horace Mann Educators Corporation (HMN - Free Report) delivered third-quarter 2020 adjusted earnings of 82 cents per share, beating the Zacks Consensus Estimate of 72 cents by 13.9%. The bottom line also improved 28.1% year over year on the back of lower expenses.

Quarterly Operational Update

Total revenues of $337 million rose 0.1% year over year on higher net investment income.

Net income soared 43.7% year over year.

Net investment income of the company inched up 0.8% year over year.

Core earnings of the company increased 28.1% year over year in the third quarter.

Operating expenses of the company fell 9% year over year on lower benefits, claims and settlement expenses as well as interest credited.

Quarterly Segment Update

Property and Casualty’s written premiums declined 5.3% year over year in the third quarter to $172.8 million. This was due to the return of the reinstatement premiums related to the PG&E subrogation recovery.

Net investment income from this segment jumped 28% year over year.

Core earnings from the segment were up 11.3% year over year on the back of higher net investment income owing to limited partnership returns.

Combined ratio expanded 30 basis points (bps) year over year.

Supplemental segment’s sales were $1.4 million in the quarter, down 61.1% year over year due to limited school access because of the coronavirus pandemic.

Written premiums from the segment dipped 2.1% year over year to $32 million. Core earnings surged 53.6% year over year.

Core earnings of the company reflect favorable business trends and short-term benefits from alterations in policyholder behavior.

Retirement Segment’s annuity contract deposits climbed 6.9% year over year.

Core earnings from the business soared 32.2% year over year.

This segment witnessed net income of $7.8 million in the quarter under review, up 32.2% year over year on the back of lower costs.  

Life Segment's sales plunged 38.6% from the year-ago quarter. Core earnings from this segment fell 15.7% year over year.

Written premiums from the business slipped 2.9% from the year-ago period.

Financial Position

As of Sep 30, 2020, total assets were $13 billion, up 5.4% year over year.
The company exited the third quarter with shareholders’ equity of $1.72 billion.

The company had total debt of $437.2 million as of Sep 30, 2020, up 1.4% year over year.

2020 Outlook

The company raised its full-year earnings per share view to the band of $2.95-$3.15. Core ROE is estimated to be more than 9%.

Zacks Rank

Horace Mann Educators has a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of the insurance industry players, which reported third-quarter results so far, earnings of Cincinnati Financial Corporation (CINF - Free Report) and First American Financial Corporation (FAF - Free Report) missed the respective Zacks Consensus Estimate while that of RLI Corp. (RLI - Free Report) ) beat the same.

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