Horace Mann Educators Corporation · NYSE:HMN
Horace Mann Educators — Raymond James 43rd Institutional Investors Conference 2022
20 slides from Horace Mann Educators's conference presentation, Mar 8, 2022
Slide 1: Creating Shareholder Value
Creating Shareholder Value Raymond James Annual Institutional Investors Conference March 8, 2022 Marita Zuraitis, President and CEO Bret Conklin, Executive Vice President and CFO
Slide 2: Safe Harbor Statement and Non-GAAP Measures
Safe Harbor Statement and Non-GAAP 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 are related t
Slide 3: Our Foundation: Financially sound company with strong strategy for profitable growth
Our Foundation: Financially sound company with strong strategy for profitable growth Financial Niche Multiline Longevity strength market model • 1945: Founded by Educators for • $14.4B in assets(1) • Educators have preferred • Business mix balanced Educators to sell auto insurance • $1.3B in premium
Slide 4: Driven by a noble mission
Driven by a noble mission Mission We listen to and understand educators and those who serve our community. They are taking care of our children’s future. We believe they deserve someone to look after theirs. Vision We aspire to be the company of choice to provide financial solutions for all educator
Slide 5: Commitment to making a positive impact extends to all stakeholders
Commitment to making a positive impact extends to all stakeholders Our ESG commitment is ingrained in long-term strategy and day-to-day operations We are committed to • Recognize the importance of carbon neutrality and actively working to reduce reducing our carbon carbon footprint through installat
Slide 6: Value proposition for educator customers delivered through focus on "PDI"
Value proposition for educator customers delivered through focus on “PDI” Provided roadmap for fix-and-build and transformational stages Serving K-12 Educator Market Focused Focused on “PDI” “PDI” Products Homogenous customer set with attractive • Products designed to meet educators’ risk profiles n
Slide 7: Sizeable, growing opportunity in core K-12 education market
Sizeable, growing opportunity in core K-12 education market Additional opportunities to grow in legacy adjacent markets U.S. elementary and secondary education teachers, projected(1) • 7.5 million K-12 educators nationwide(1) - ~3.7M teachers in public and private schools; ~3.1M public school instru
Slide 8: K-12 education a homogeneous market with similar customer characteristics and goals
K-12 education a homogeneous market with similar customer characteristics and goals Reachable through both retail and worksite channels Desire to Responsible, Conservative Dedicated to improve risk-adverse educator total & loyal students and loyal compensation • Strong desire for • Passion for educa
Slide 9: Relevance for educators grows with expanded worksite capabilities
Relevance for educators grows with expanded worksite capabilities Helping educators protect what they have today and prepare for a successful tomorrow Retail solutions Worksite solutions • Solutions directly selected by • Solutions offered to educators an educator, often working with via their distr
Slide 10: Strategic emphasis on solutions tailored for educators at every life stage
Strategic emphasis on solutions tailored for educators at every life stage Retirement Preparing to retire Established educator New Issues: • How to manage educator Issues: retirement income • Worried about Issues: ensuring smooth • Need to plan wealth Pre-educator • Protecting assets retirement tran
Slide 11: Worksite
Enables customers to engage with Horace Mann the way they choose “Horace Mann Companies” brings together three organizations with decades of commitment to educators and strong reputations in the market Purchase Purchase through from local, employer- trusted agent sponsored program Worksite Educators
Slide 12: Addition of worksite solutions caps multi-year transformation
Addition of worksite solutions caps multi-year transformation Successfully navigating pandemic environment LEVERAGE LEADERSHIP: 2022 AND BEYOND Horace Mann TRANSFORMATION: 2019-2021 enters 2022 Initiated pre-pandemic prepared for • Improved key levers of underlying profitability leadership improveme
Slide 13: Leverage leadership stage: Targeting growth across all product lines in 2022 and beyond
Leverage leadership stage: Targeting growth across all product lines in 2022 and beyond Strategies to leverage leadership focus on initiatives to maximize profitable growth and gain market share LEVERAGE LEADERSHIP: 2022 AND BEYOND Maximize worksite Cross-sell educators Leverage Auto opportunity Con
Slide 14: Earnings trajectory illustrates clear path to sustainable double-digit ROE through profitable growth
Earnings trajectory illustrates clear path to sustainable double-digit ROE through profitable growth Expect 2022 EPS in range of $3.45 - $3.65 2022 will include at least 15 cents from newly acquired Madison National Life’s current business activity, as well as initial contributions of the strategic
Slide 15: Allocation of excess capital to prioritize shareholder value creation
Allocation of excess capital to prioritize shareholder value creation As a larger and more diverse organization, Horace Mann should generate more than $50 million in excess capital each year, available to support growth and to return to shareholders $50 9% $47.24 CAGR $45 $43.74 $40.58 $40 $35.38 $3
Slide 16: Appendix
Appendix
Slide 17: 2022 core EPS expected to be in range of $3.45 to $3.65
2022 core EPS expected to be in range of $3.45 to $3.65 Net investment income expected to in line with 2021, modeling limited partnership portfolio returns closer to the average historical levels Segment 2022 guidance Key drivers of range • Expect to generate about $50 million in Property & $44 to $
Slide 18: Strong capital position, with more than adequate capital to grow businesses
Strong capital position, with more than adequate capital to grow businesses Capital Ratios • Capital management strategies support strong capital ratios 600% 569% 0.0 - P&C loss reserves held at top half of 536% independent actuarial range 507% 500% 504% - Conservative L&R product design 500% 0.5 -
Slide 19: Highly rated by all rating agencies
Highly rated by all rating agencies Education market focus, earnings diversification and capital strength cited Agency Rating Outlook (affirmed/reviewed) • AM Best upgraded Financial Strength Rating of subsidiary NTA Life to A AM Best A Stable (Excellent) in recent rating action Company (7/14/21) •
Slide 20: Horace Mann at a glance
Horace Mann at a glance Exchange ticker symbol NYSE:HMN Share Price $41.18(1) Weighted Average Diluted Shares (for 4Q21) 42.2 million Market Capitalization $1.7 billion(1) Annualized Dividend Per Share $1.28 Dividend Yield Per Share 3.1%(1) Book Value Per Share* $36.64(2) Analyst Coverage Dowling &
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