Horace Mann Educators Corporation

Good morning and welcome to the Horace Mann Educators' Second Quarter 2025 Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key 10 on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Brandon DeWall, Vice President Investor Relations. Please go ahead.

Thank you. Welcome to Horace Mann's discussion of our Second Quarter 2025 Results. Yesterday, we issued our earnings release, 10Q, investor supplement, and investor presentation. Copies investors page on our website. Merida Zaraitis, President and Chief Executive Officer, and Ryan Grenier, Executive Vice President and Chief Financial Officer, will give the formal remarks on today's call. We also have Steve McEnany, Executive Vice President and Chief Operating Officer with us for Q&A. Before turning it over to Merida, I want to note that our presentation today includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The company cautions investors that any forward-looking statements include risks and uncertainties and are not guarantees of future performance. These forward-looking statements are based on management's current expectations, and we assume no obligation to update them. Actual results may differ materially due to a variety of factors, which are described in our news release and SEC filings. In our prepared remarks, we use some non-GAAP measures. Reconciliation of these measures to the most comparable GAAP measures are available in our investor supplement. I'll now turn the call over to Merida.

Thanks, Brendan, and good morning, everyone. Yesterday, Horace Mann reported Second Quarter earnings per share of $1.06, a nearly threefold increase over prior year. Net premiums and contract charges earned were up 8%, with total revenues up 6%. These results reflect continued strong business profitability and solid growth momentum across the business, as well as property and casualty catastrophe losses that were meaningfully below prior year and recent prior year periods. Core return on equity for the quarter was 11.3%, bringing our trailing 12-month core return on equity to 12.6%. Taking the strong results through the first half of the year into consideration, we are increasing our full-year 2025 core EPS guidance to a range of $4.15 to $4.45. Ryan will provide more color on the full guidance assumptions later in the call. Today, I want to highlight some key takeaways from our very strong Second Quarter, as well as revisit the long-term strategic outlook we introduced at our recent Investor Day. Overall, we had an excellent Second Quarter. Our businesses are all at or near profitability targets, which provide the foundation for driving sustained profitable growth. Let me break it down by segment. In property and casualty, we reported a combined ratio of 97%, a nearly 15-point improvement over prior year. Core earnings were $17 million, a $25 million improvement from the segment loss we recorded a year ago. We are seeing the benefit of non-rate underwriting actions taken to reduce property volatility. These measures, including roof settlement schedules, continue to earn in as expected. In addition, we recorded favorable prior year development in both property and auto in the Second Quarter. Catastrophe losses contributed 15 points to the combined ratio, an 8-point improvement over the prior year. While PCS recorded 20 storm catastrophe events this quarter, our results reflect lower catastrophe losses driven by lower frequency and lower severity of policyholder claims. In the life and retirement segment, core earnings were double last year's results on the strength of higher net investment income returns. Limited partnership and commercial mortgage loan fund returns outpaced last year's results. And for the 14th consecutive quarter, new money yields in the core portfolio exceeded book yield. In addition, we recorded lower mortality costs compared to the Second Quarter 2024. On a -to-date basis, mortality costs remain within our expected actuarial range. In the individual supplemental and group benefits segment, policyholder utilization continues to be favorable. Our results demonstrate that we are successfully delivering on profitability commitments while strategically investing in the business to capture long-term growth opportunities. We are on track to achieve our 2025 goals of record annual core earnings and a sustained double-digit shareholder return on equity. At our recent investor day, we outlined what's next for Horseman. We have two clear strategic financial goals we are focused on. A 10% average compound annual growth rate in core EPS and a sustained 12 to 13% core return on equity by 2028. Now is the time for us to scale our profitable businesses. We're accomplishing this through sales force growth, leveraging cutting-edge marketing tools, and investing in successful value-added brand awareness and lead generation programs. We are realizing steady -single-digit growth in net points of distribution, which encompasses our exclusive agency force and licensed producers that support them in both their agencies and our call center. Our agency force in particular is motivated by the improvements and investments we have made to the agent experience. Our agent net promoter score continues to improve and is top quartile among industry peers. One of the investments we have talked about before is Catalyst, our homegrown technology solution that enhances agent interactions with educators and allows us to engage with more educators at the right time to better convert prospects into customers. At Horseman, we build marketing and support programs around the issues educators face every day and we provide solutions. This not only builds brand awareness and brand loyalty, it provides us with greater access to schools and educators. A few examples. In a spring survey, about 86% of educators once again told Horseman that they spend their own money on supplies for their classrooms. We help educators find solutions to this financial issue in several ways, including hosting educational workshops on how to maximize classroom crowdfunding success and funding projects through a Donors Choose national sponsorship. This month we are partnering with Lakeshore Learning, an educational furniture and materials retailer to stock dozens of classrooms across the country for the new school year, including $125,000 classroom makeover. We also recently announced a strategic partnership with Crayola, a talented brand known for its dedication to education. Together we are expanding access to creative and impactful resources for educators and students nationwide through programs like Crayola Creativity Week. This January celebration includes virtual educational events, creativity speakers, teaching resources, and prizes to help educators care for themselves and their students. It reaches more than 800,000 educators and 13 million students annually. We are seeing traction from our increased focus on partnerships and lead generation programs. Website traffic in the second quarter increased 75% over the prior year. We've thoughtfully built capabilities and programs within our integrated omni-channel approach to customer acquisition and service. This ensures educators can engage with Horace Mann in the way that they choose, through a local agent, digital channels, or our call center, and can seamlessly flow between channels when they need more or less guidance. And we're seeing results. Auto sales are up 10% year to date. At our current sales pace and as retention stabilizes and returns to a more typical level, we expect risks in force to level out and begin to grow. In fact, we are seeing deceleration in the decline of risks in force, with the second quarter down less than 1% compared to the first quarter. Notably, individual supplemental achieved another record breaking quarter. Second quarter sales of 6 million increased 43% over the prior year. On a year to date basis, sales were up over 50%. We are clearly growing this business, which as planned, is an important contributor to our higher ROE targets. The so what for investors is that Horace Mann is a company with a clear and compelling strategy to drive sustained profitable growth and accelerate shareholder value creation. In addition to our plans for profitable growth, the most accretive use of capital, we maintain a strong dividend payout ratio and continue to execute on share repurchase program. In May, the board authorized an additional 50 million of share repurchase. We have returned 13 million of capital to shareholders and share repurchases through July year to date. To close, this is an exciting time for Horace Mann. We are reaching more educators than ever before with a compelling value proposition. On a year to date basis, we are exceeding our 2025 goals of record annual core earnings and a sustained ROE above 10%. Beyond that, we have the products distribution and infrastructure in place to deliver on our vision to be the leading financial services provider for educators in the years to come. We are operating from a position of strength. We have a strong competitive advantage and we have confidence in delivering sustained market leading growth. Over the next three years, we will serve more educators, build scale, and accelerate shareholder returns. Thank you. I'll now turn the call over to Ryan.