Financial Analysis

Contingencies and Commitments Lawsuits and Legal Proceedings Companies in the insurance industry have been subject to substantial litigation resulting from claims, disputes and other matters. For instance, they have faced expensive claims, including class action lawsuits, alleging, among other things, improper sales practices and improper claims settlement procedures. Negotiated settlements of certain such actions have had a material adverse effect on many insurance companies. At the time of issuance of this Annual Report on Form 10-K, the Company does not have pending litigation from which there is a reasonable possibility of material loss. Assessments for Insolvencies of Unaffiliated Insurance Companies The Company is contingently liable for possible assessments under regulatory requirements pertaining to potential insolvencies of unaffiliated insurance companies. Liabilities, which are established based upon regulatory guidance, have generally been immaterial. Investment Commitments The Company has outstanding commitments to fund investments primarily in limited partnership interests. Such unfunded commitments were $380.5 million and $449.9 million for the years ended December 31, 2025 and 2024, respectively.

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"NOTE 10 - Debt Indebtedness and scheduled maturities consisted of the following: ($ in millions) Interest Rates Final Maturity December 31, 2025 2024 Short-term debt Revolving Credit Facility Variable 2030 $ $ Long-term debt (1) 4.70% 2025 Senior Notes, Aggregate principal amount of $300.0 less unaccrued discount of $1.5 and $0.0 and unamortized debt issuance costs of $3.1 and $0.0 4.70% 2030 295.4 7.25% 2023 Senior Notes, Aggregate principal amount of $300.0 less unaccrued discount of $0.3 and $0.4 and unamortized debt issuance costs of $1.7 and $2.3 7.25% 2028 298.0 297.3 4.50% 2015 Senior Notes, Aggregate principal amount of $250.0 less unaccrued discount of $0.0 and $0.1 and unamortized debt issuance costs of $0.0 and $0.2 4.50% 2025 249.7 Total $ 593.4 $ 547.0 (1) The Company designates debt obligations as ""long-term"" based on maturity date at issuance. 2025 Senior Notes On September 26, 2025, the Company issued $300.0 million aggregate principal amount of 4.70% senior notes (2025 Senior Notes), which will mature on October 1, 2030, issued at a discount resulting in an effective yield of 4.82%. Interest on the 2025 Senior Notes is payable semi-annually at a rate of 4.70%. The 2025 Senior Notes are redeemable in whole or in part, at any time, at the Company's option, at a redemption price equal to the greater of (1) 100% of the principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Fair Value of Financial Instruments The Company is required to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values for the Company's insurance contracts other than annuity contracts (which are investment contracts) and equity method limited partnership interests are not required to be disclosed in fair value hierarchy. The estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company's overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between knowledgeable, unrelated and willing market participants on the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company categorizes the fair value of its financial and nonfinancial assets and liabilities into a three-level hierarchy based on the priority of inputs to the valuation technique. The three levels of inputs that may be used to measure fair value are: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include certain fixed maturit …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Intangible Assets The Company conducts goodwill impairment testing at the reporting unit level at least annually or more frequently if events occur or circumstances change that indicate that the carrying amount may not be recoverable. See Note 1 for further description of impairment testing. At October 1, 2025, October 1, 2024 and October 1, 2023, the Company performed a qualitative goodwill impairment test. Based on the results of the tests, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The changes in the carrying amount of goodwill by reporting segment for the year ended December 31, 2025 were as follows: ($ in millions) Property & Casualty Life & Retirement Supplemental & Group Benefits Total Balance as of January 1, 2023 Goodwill $ 9.5 $ 48.0 $ 32.4 $ 89.9 Accumulated impairment losses (35.6) (35.6) Total goodwill, net 9.5 12.4 32.4 54.3 Acquisitions Impairments Balance as of December 31, 2023 Goodwill 9.5 48.0 32.4 89.9 Accumulated impairment losses (35.6) (35.6) Total goodwill, net 9.5 12.4 32.4 54.3 Acquisitions Impairments Balance as of December 31, 2024 Goodwill 9.5 48.0 32.4 89.9 Accumulated impairment losses (35.6) (35.6) Total goodwill, net 9.5 12.4 32.4 54.3 Acquisitions Impairments Balance as of December 31, 2025 Goodwill 9.5 48.0 32.4 89.9 Accumulated impairment losses (35.6) (35.6) Total goodwill, net $ 9.5 $ 12 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"Income Taxes The Company is subject to U.S. federal and various state and local income taxes. The Company has no foreign operations, and therefore no foreign income tax expense. The income tax provision reflects management's best estimate of current and deferred tax expense, based on enacted tax laws and regulations, taxable income, and other factors. The income tax assets and liabilities included in Other Assets and Other Liabilities, respectively, in the Consolidated Balance Sheets were as follows: ($ in millions) December 31, 2025 2024 Income tax (asset) liability Current $ (6.4) $ (28.1) Deferred 65.5 55.8 Deferred tax assets and liabilities are recognized for all future tax consequences attributable to ""temporary differences"" between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. There are no deferred tax liabilities that have not been recognized. The ""temporary differences"" that gave rise to the deferred tax balances were as follows: ($ in millions) December 31, 2025 2024 Deferred tax assets Other comprehensive income - net unrealized losses on securities $ 50.0 $ 85.2 Unearned premium reserve reduction 15.1 14.4 Compensation accruals 12.7 9.3 Impaired securities 3.2 2.3 Other comprehensive income - net funded status of benefit plans 0.7 1.9 Discounting of unpaid claims and claim expense tax reserves 2.9 2.9 Capital loss carryforward 1.2 Net operating loss carryforward 0.6 Postretirement benefits other tha …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent Adoption of New Accounting Standards Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update will improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. Effective for the year ended December 31, 2025, the Company adopted disclosure guidance for income tax disclosures on a retrospective basis. The guidance had no net impact on the Company's consolidated financial position, results of operations, or cash flows. Future Adoption of New Accounting Standards Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-04, 03 Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This guidance will improve the disclosures regarding a public business entitys expenses by requiring (1) disclosure of the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption, …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Segment Information The Company conducts and manages its business through four reporting segments. The three reporting segments representing the major lines of business, are: (1) Property & Casualty (primarily personal lines of auto and property insurance products), (2) Life & Retirement (primarily tax-qualified fixed and variable annuities as well as life insurance products), and (3) Supplemental & Group Benefits (primarily cancer, heart, hospital, supplemental disability, accident, short-term and long-term group disability, and group term life coverages). The Company does not allocate the impact of corporate-level transactions to these reporting segments, consistent with the basis for management's evaluation of the results of those reporting segments, but classifies those items in the fourth reporting segment, Corporate & Other. Corporate & Other includes corporate debt service, net investment gains (losses) and certain public company expenses, as well as corporate debt retirement costs, when applicable. In addition to these transactions, Corporate & Other also includes legacy commercial claims. The accounting policies of the reporting segments are the same as those described in Note 1-Basis of Presentation and Significant Accounting Policies. Expense allocations are based on certain assumptions and estimates primarily related to direct cost, revenue and activity; methodologies are applied consistently. Stated segment operating results would change i …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Contingencies and Commitments Lawsuits and Legal Proceedings Companies in the insurance industry have been subject to substantial litigation resulting from claims, disputes and other matters. For instance, they have faced expensive claims, including class action lawsuits, alleging, among other things, improper sales practices and improper claims settlement procedures. Negotiated settlements of certain such actions have had a material adverse effect on many insurance companies. At the time of issuance of this Interim Report on Form 10-Q, except as noted below, the Company does not have pending litigation from which there is a reasonable possibility of material loss. In 2023, the Horace Mann Insurance Company (HMIC) was named as a defendant in one lawsuit and received various demands for reimbursement and notices of claims related to legacy, long-tail commercial lines claims, including asbestos, environmental, and sexual molestation claims. It is alleged that HMIC reinsured certain commercial lines policies as a member of various insurance pooling arrangements in the late 1960s and early 1970s. The related policies were written prior to the 1975 acquisition of Horace Mann by INA discussed in Part I - Item 1 of the Annual Report on Form 10-K. HMECs available records indicate that on January 1, 1975, HMIC entered a quota share retrocession treaty with INA. It is the Companys understanding that claims arising under these legacy policies were handled by various third parties pursua …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Fair Value of Financial Instruments The Company is required to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values for the Companys insurance contracts other than annuity contracts (which are investment contracts) and equity method limited partnership interests are not required to be disclosed in fair value hierarchy. The estimated fair values of liabilities under all insurance contracts are taken into consideration in the Companys overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts. Information regarding the three-level fair value hierarchy presented below and the valuation methodologies utilized by the Company to estimate fair values at each reporting date is included in Part II - Item 8, Note 3 of the Consolidated Financial Statements in the Companys Annual Report on Form 10-K for the year ended December 31, 2024. Financial Instruments Measured and Carried at Fair Value on a Recurring Basis The following table presents the Company's fair value hierarchy for financial assets and financial liabilities measured and carried at fair value on a recurring basis. During the nine months ended September 30, 2025 and 2024, there were no transfers between Level 1 and Level 2. As of September 30, 2025, Level 3 invested assets comprised 8.6% of the Companys total investment portfolio at fair value. ($ in millions) Carrying Amount Fair Value Fair Value Measu …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Future Adoption of New Accounting Standards Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update will improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the Company for annual periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025. Early adoption is permitted. The guidance will have no net impact on the Company's consolidated financial position, results of operations, or cash flows. Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-04, 03 Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This guidance will improve the disclosures regarding a public business entitys expenses by requiring (1) disclosure of the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (or other amounts of depletion expense) included in each relevant expense cap …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Segment Information The Company conducts and manages its business through four reporting segments. The three reporting segments representing the major lines of business are: (1) Property & Casualty (primarily personal lines of auto and property insurance products), (2) Life & Retirement (primarily tax-qualified fixed and variable annuities as well as life insurance products), and (3) Supplemental & Group Benefits (primarily cancer, heart, hospital, supplemental disability, accident, short-term and long-term group disability, and group term life coverages). The Company does not allocate the impact of corporate-level transactions to these reporting segments, consistent with the basis for management's evaluation of the results of those reporting segments, but classifies those items in the fourth reporting segment, Corporate & Other. Corporate & Other includes corporate debt service, net investment gains (losses) and certain public company expenses, as well as corporate debt retirement costs, when applicable. In addition to these transactions, Corporate & Other also includes legacy commercial claims. The accounting policies of the reporting segments are the same as those described in Note 1-Basis of Presentation and Significant Accounting Policies. Expense allocations are based on certain assumptions and estimates primarily related to direct cost, revenue and activity; methodologies are applied consistently. Stated segment operating results would change if …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent EventsOn October 14, 2025, the Company redeemed in full its outstanding $250.0million aggregate principal amount of 4.50% Senior Notes due December 1, 2025, together with accrued and unpaid interest up to, but not including, the redemption date, totaling $4.2million. In connection with the redemption, the Company had previously deposited the required funds with the Trustee, Bank of New York, in September 2025, as further described in Note 9 of the September 30, 2025 Form 10-Q. On September 26, 2025, the Company issued $300.0million aggregate principal amount of Senior Notes. The Company used a portion of the net proceeds from the issuance to fund the redemption of its outstanding $250.0million aggregate principal amount of Senior Notes. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing