Horace Mann Educators delivered a second quarter that exceeded market expectations for profitability, with non-GAAP earnings per share significantly above analyst forecasts despite missing on revenue. Management attributed this performance to improved underwriting in property and casualty insurance, lower catastrophe losses compared to prior years, and strong investment returns. CEO Marita Zuraitis noted that, “all businesses are at or near profitability targets,” highlighting actions to reduce property volatility and increased productivity across distribution channels. The market responded positively, reflecting confidence in the company’s operational improvements and risk management.
Is now the time to buy HMN? Find out in our full research report (it’s free).
Horace Mann Educators (HMN) Q2 CY2025 Highlights:
- Revenue: $411.7 million vs analyst estimates of $426.7 million (6.1% year-on-year growth, 3.5% miss)
- Adjusted EPS: $1.06 vs analyst estimates of $0.60 (78.2% beat)
- Adjusted Operating Income: $36.5 million (8.9% margin, 693% year-on-year growth)
- Operating Margin: 8.9%, up from 1.2% in the same quarter last year
- Market Capitalization: $1.82 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Horace Mann Educators’s Q2 Earnings Call
- Michael David Zaremski (BMO): Asked whether recent policy changes and lower catastrophe losses could lead to a revision in catastrophe loss guidance. CFO Ryan Greenier responded that guidance remains anchored to a five-year average due to weather unpredictability, despite recent favorable results.
- Zaremski (BMO): Inquired about the stabilization and potential growth of auto policy counts. COO Stephen McAnena noted that auto policies in force are close to stabilizing, with expectations for growth as retention improves and new business momentum builds.
- John Bakewell Barnidge (Piper Sandler): Sought clarity on Individual Supplemental and Group Benefits sales trends. McAnena explained that sales growth in Individual Supplemental is driven by more productive agents, while Group Benefits, though lumpy, has a strong sales pipeline for the rest of the year.
- Barnidge (Piper Sandler): Asked whether recent sales strength reflects core educator customers or new market channels. CEO Marita Zuraitis confirmed the majority of growth is still within the educator segment, with new channels not yet contributing meaningfully.
- Zaremski (BMO): Requested specifics on new money yields in the investment portfolio. CFO Ryan Greenier disclosed a yield of 5.79% for the core fixed maturity portfolio, highlighting ongoing recovery and stabilization in commercial real estate investments.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) whether policy retention and auto policy counts stabilize and shift to growth as anticipated, (2) the pace and impact of new educator-focused partnerships and digital initiatives on lead generation and sales, and (3) the performance of the supplemental and group benefits segments, particularly as the business targets higher returns and more diversified earnings streams. Progress on catastrophe risk management and investment income trends will also be closely tracked as indicators of sustainable margin improvement.
Horace Mann Educators currently trades at $44.60, up from $42.29 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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