Profile: Horace Mann Educators Corp (HMN)
24 Jun 2019
Horace Mann Educators Corporation (HMEC), incorporated on February 7, 1968, is an insurance holding company. Through its subsidiaries, HMEC markets and underwrites personal lines of property and casualty (primarily personal lines automobile and homeowners) insurance, retirement annuities (primarily tax-qualified products) and life insurance in the United States. The Company's operating segments include Property and Casualty segment, comprising primarily personal lines automobile and homeowners products; Retirement segment, comprising primarily tax-qualified fixed and variable annuities; Life segment life insurance, and Corporate and Other. It markets and services its products through a sales force of full-time agents supported by the Company's Customer Contact Center. These agents sell HMEC's products and limited additional third-party vendor products. As of December 31, 2016, its property and casualty subsidiaries and its life insurance subsidiary were licensed to write business in over 48 states and the District of Columbia.
Property and Casualty Segment
The Company's Property and Casualty Segment offers private passenger automobile insurance. As of December 31, 2016, the Company had approximately 220,000 homeowners policies in force. The Company insures primarily residential homes. The Company has programs in various states to provide higher-risk automobile and homeowners' coverages, as well as other insurance coverages, with third-party vendors underwriting and bearing the risk of such insurance and the Company receiving commissions on the sales. The Property and Casualty segment consists of property and casualty reserves, and property and casualty reinsurance.
The Company markets both fixed and variable annuity contracts, primarily on a tax-qualified basis. Fixed only annuities provide a guarantee of principal and a guaranteed minimum rate of return. These contracts are backed by the Company's general account investments. The Company bears the investment risk associated with the investments and may change the declared interest rate on these contracts subject to contract guarantees. The Company purchases call options on the applicable indices as an investment to provide the income needed to fund the annual index credits on the indexed products. The Company's sub-account options also include both lifecycle funds and asset allocation funds. These all-purpose funds have assets allocated among multiple investment classes within each fund based on a specific targeted retirement date or risk tolerance. As of December 31, 2016, the Company had 80 variable sub-account options including funds. Among the Company's annuity products, the Goal Planning Annuity offers educators a variable annuity with the Company's array of sub-account investment choices.
The Company includes an optional first year premium bonus and two optional riders that manage the death benefit feature of the product. Another product, Expanding Horizon, is a fixed interest rate annuity contract for investors who do not want investment risk exposure. This product offers educators a rate of interest on their retirement dollars and a choice of bonuses to optimize their benefits at retirement. The Destination Fixed Indexed Annuity product is designed to have credited interest rates over the long term than traditional fixed rate annuities, because the credited interest rate will be linked to changes in an index, either the S&P 500 or the Dow Jones Industrial Average. In addition to individual annuities, the Company offers group variable and fixed annuity products that allow flexibility in customizing 403(b) annuity programs to meet the needs of school districts.
The Company's Life Segment offers traditional term and whole life insurance products. It offers Life by Design, a portfolio of Company-manufactured and branded life insurance products, which addresses the financial planning needs of educators. The Company also offers a combination product called Life Select that mixes a base of either traditional whole life, 20-pay life or life paid-up at age 65 with a range of term riders to allow for tailoring the coverage to the customers' varying life insurance needs. The Company offers Cash Value Term-a term policy that builds cash value while providing the income protection of traditional level term life insurance. As of December 31, 2016, the Company's traditional term, whole life and group life business in force consisted of approximately 144,000 policies. As of December 31, 2016, the Company also had in force approximately 54,000 Experience Life policies. The Company also maintains a life catastrophe reinsurance program. The Company's life catastrophe risk reinsurance program covers acts of terrorism and includes nuclear, biological and chemical explosions but excludes other acts of war.
The Company competes with State Farm, Allstate, Farmers, Liberty Mutual, Nationwide, GEICO, Progressive, USAA, American International Group, AXA, Voya Financial, Inc., National Life Insurance Company, MetLife, Security Benefit, and Teachers Insurance and Annuity Association-College Retirement Equities Fund.
Horace Mann Educators Corp
1 HORACE MANN PLZ
SPRINGFIELD IL 62715-0001