Horace Mann Educators Corporation · NYSE:HMN
Horace Mann Educators — 2015 KBW Insurance Conference
24 slides from Horace Mann Educators's conference presentation, Sep 9, 2015
Slide 1: 2015 KBW Insurance Conference
2015 KBW Insurance Conference Marita Zuraitis, President and CEO
Slide 2: Safe Harbor Statement and Non-GAAP Financial Measures
Safe Harbor Statement and Non-GAAP Financial Measures Certain statements made in this presentation should be considered forward -looking as defined in the Private Securities Litigation Reform Act of 1995. Forward -looking statements give expectations or forecasts of future events. These statements a
Slide 3: Horace Mann helps educators identify their financial goals and develop plans to achieve them
Horace Mann helps educators identify their financial goals and develop plans to achieve them Insurance to protect Financial products Comprehensive personal assets preparing them for solutions for today the future educators • We understand educator life stages and offer solutions at every point • We
Slide 4: Why this niche market?
Why this niche market? Educators have an attractive risk profile How they live: Where they work: How they save: Conservative and loyal Close to home Financially responsible • Buy higher insurance • Generally live close to • Focused on achieving limits school with very short financial goals • Tend to
Slide 5: Our vision: To be the company educators choose to help protect what they have today
Our vision: To be the company educators choose to help protect what they have today and prepare for a successful tomorrow Our strategy: Holistic solutions-based orientation at every life stage Product Distribution Infrastructure Trusted, knowledgeable and Designed to meet educators’ Modern, efficien
Slide 6: Our strategy: Holistic solutions-based orientation at every life stage
Our strategy: Holistic solutions-based orientation at every life stage Solving for educator issues solidifies our position as a Retirement trusted advisor. Preparing to retire Established Issues: • How to manage retirement educator income Issues: • Need to plan wealth New educator • Worried about en
Slide 7: Segment strategy and results
Segment strategy and results
Slide 8: Customer-focused retirement planning and insurance products tailored to educator needs
We offer a mix of innovative, customer-focused retirement planning and insurance products tailored to educator needs 2014 Premium & Contract Deposits Good for Good for educators ($1,168mm) shareholders • Innovative product • Counter-cyclical solutions targeted to Life • Multiline focus 9% unique nic
Slide 9: Annuity segment – Helping educators meet their financial goals with tailored solutions
Annuity segment – Helping educators meet their financial goals with tailored solutions Opportunity • Educators face complicated retirement system offerings – Differing state teacher retirement systems (STRS) Annuity Product Composition(1) – Pension uncertainty Non- – Tax-deferred options Other Quali
Slide 10: Annuity segment – Assets under management and sales continue to grow
Annuity segment – Assets under management and sales continue to grow $ billions Assets Under Management Results 7 5.9 • Sales momentum for Annuity products 5.7 6 4.8 5.3 remains strong 5 4.4 1.8 1.9 4 3.7 4.1 1.4 1.7 – 14% increase in sales over 2Q14, supported by 1.4 1.3 Fixed Indexed Annuity produ
Slide 11: P&C Segment – Preferred book of educator risk with strong retention ratios
P&C Segment – Preferred book of educator risk with strong retention ratios P&C Net Written Premium Opportunity ($584 MM)(1) • Preferred risk profile – Conservative by nature Property – Short/off-hour commutes 35% Vol. Auto 65% – Financially responsible • 35% of our existing customers have their P&C
Slide 12: P&C segment – Improving combined ratios consistently better than industry averages
P&C segment – Improving combined ratios consistently better than industry averages Auto Loss Ratio vs Industry(1) 80.0% Results • Strategic pricing and underwriting actions 75.0% resulting in margin improvement – Mid-single-digit rate increases ahead of low- 70.0% single-digit loss cost trends – Com
Slide 13: Life segment – Sizable opportunity in our middle-market educator niche
Life segment – Sizable opportunity in our middle-market educator niche Individual insurance in Opportunity force(1) • Approximately 80% of HM customers do not have HM Life product • Dedicated field support team to help agents educate customers about options and costs 11% Products Basic coverages app
Slide 14: Life segment – Profitable inforce block with renewed growth
Life segment – Profitable inforce block with renewed growth $ millions Premium Written & Sales $ millions Results 12 $105 10 • Strategic focus to grow this segment $100 8 of profitable business at a double- $95 6 11.1 digit pace $90 4 6.4 8.5 • 1H15 ex-DAC life earnings of $6.9 4.7 4.4 4.6 5.0 4.8 $
Slide 15: Multiline business model has generated steady, growing operating earnings
Multiline business model has generated steady, growing operating earnings Operating Earnings by Segment(1) $120 $2.32 $2.30 $2.08 CY Est. $100 $2.15 • Operating earnings per share(1) have 44.4 to $80 $1.37 $1.58 37.1 46.9 $2.35 grown 11% on a compound average $60 29.9 27.0 $1.11 5.9 20.4 17.5 $1.08
Slide 16: Top quartile book value growth and a compelling dividend yield
Solid financial results have resulted in top quartile book value growth and a compelling dividend yield (1) Book Value Plus Accumulated Dividends(1) • $26.30 book value per share excluding FAS 115 as of Q2 2015, up 7% from a 3.06 3.56 year ago 2.14 1.36 • Annualized 2015 shareholder dividend 0.81 of
Slide 17: We will achieve our vision by focusing on PDI
We will achieve our vision by focusing on PDI Our strategy: Holistic solutions-based orientation at every life stage Product Distribution Infrastructure Trusted, knowledgeable and Designed to meet educators’ Modern, efficient, scalable tailored to educator needs needs and cover their risks and easy
Slide 18: Product: Core offerings largely complete and driving growth
Product: Core offerings largely complete and driving growth Product Distribution Infrastructure Designed to meet Trusted, knowledgeable Modern, efficient, educators’ needs and and tailored to educator scalable and easy to do cover their risks needs and preferences business with Life and Annuity Prop
Slide 19: Distribution: Focus on providing educators access to a trusted advisor
Distribution: Focus on providing educators access to a trusted advisor through their desired channel Product Distribution Infrastructure Designed to meet Trusted, knowledgeable Modern, efficient, educators’ needs and and tailored to educator scalable and easy to do cover their risks needs and prefer
Slide 20: Infrastructure: Efficiency upgrades and ease of doing business
Infrastructure: Efficiency upgrades and ease of doing business are supporting profitable growth initiatives Product Distribution Infrastructure Designed to meet Trusted, knowledgeable Modern, efficient, educators’ needs and and tailored to educator scalable and easy to do cover their risks needs and
Slide 21: The opportunity for growth
The opportunity for growth
Slide 22: Sizable opportunity with new and existing educators
Sizable opportunity with new and existing educators Students Preparing • The Public K-12 education market includes to Teach: 418,588(4) Private Education 872,213(5) more than 6.1 million individuals Retired Administrators • Projected to grow by 15% between 2010 to 2,686,000(6) 305,627 2021(1) Suppor
Slide 23: By gathering and analyzing Big Data, we know our prospects as we do our customers
By gathering and analyzing ‘Big Data,’ we know just as much about our prospects as we do our customers Where they work School building information Tenure Who they are What they need Wealth scores Number and age of Number and type of family members vehicles Buying habits Targeted sales opportunities
Slide 24: Tools in place to accelerate efforts to profitably grow
Tools in place to accelerate efforts to profitably grow Product Distribution Infrastructure A robust suite that Focus on quality and Upgrades to improve covers educator productivity, informed by ease of doing business insurance and savings sophisticated Big Data and efficiency needs capabilities • G
Horace Mann Educators — 2015 KBW Insurance Conference on 6ix