Dean (for Meyer Shields)'s questions to Horace Mann Educators Corp (HMN) leadership • Q3 2024
Question
An analyst from Keefe, Bruyette & Woods asked why the personal auto core loss ratio didn't see more improvement given recent favorable reserve development and moderating loss trends. He also inquired about the mix of annuity deposits between variable and fixed products and the expected trend for 2025.
Answer
President and CEO Marita Zuraitis and CFO Ryan Greenier explained that prior year development was driven by lower-than-expected severity in auto liability from 2022 and prior. Executive Mark Desrochers added that Horace Mann's rate earn-in is a quarter or two behind larger peers and a shift in policy terms impacted the loss ratio. Regarding annuities, Ryan Greenier and Marita Zuraitis noted that the core educator demographic consistently prefers lower-risk fixed products, creating a stable and predictable business mix that acts as a 'ballast' for the company.