Horace Mann Educators Corporation

Good day and welcome to Horace Mann Educators third quarter 2026 investor call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Rachael Luber, Vice President of Investor Relations. Please go ahead.

Thank you. Welcome to Horace Mann's discussion of our third quarter 2026 results. Yesterday, we issued our earnings release, investor supplement, and investor presentation. Copies are available on the investors page of our website. Our speakers today are Marita Zuraitis, President and Chief Executive Officer, and Ryan Greenier, Executive Vice President and Chief Financial Officer. Before turning it over to Marita, 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 assumed 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 used some non-GAAP measures. Reconciliations of these measures to the most comparable GAAP measures are available in our investor supplement. I'll now turn the call over to Marita.

Thanks, Rachael, and good morning, everyone. Yesterday, Horseman reported the strongest quarterly earnings in our history. Our core earnings per share of $2.06, a 50% increase over last year's record third quarter. Core shareholder return on equity for the trailing 12 months increased to 14.2%. The quarter reflects strong execution across our diversified business. including excellent P&C underwriting results, higher net investment income, and continued growth momentum. These results also demonstrate the earnings capacity of the company as we continue executing against the strategy we outlined at our investor day. Based on our performance through the first nine months of the year, we have raised our full year 2026 core EPS guidance to a range of $5.75 to $5.95 per share. Ryan will review the updated outlook and provide context on the underlying earnings progress we expect to carry forward, as well as items that benefited this year's results but are not expected to reoccur. This morning, I'll focus on the drivers of the quarter's strong performance and our continued progress towards our three-year strategic financial goals. Let me start with individual supplemental and group benefits, where we continue to see strong performance and attractive growth across both businesses. Our supplemental and group benefits business provides individuals and employers with meaningful solutions that support financial protection, employee well-being, recruiting, and retention. The segment generates reoccurring premium and fee-based revenue, produces attractive margins, and requires less capital than our other businesses, adding earnings diversification and greater financial flexibility. This quarter, the segment generated 19 million of core earnings, a 10% increase over prior year, reflecting continued growth and strong underwriting results. Individual supplemental offers employee purchased protection, including cancer, critical illness and other supplemental protection. The business continues to build on its record 2025 performance supported by our strategic investments in expanded distribution capabilities and product enhancements. Sales have grown at an annualized rate of 25% over the past two years. Group Benefits provides employer-sponsored coverage including life and disability. Earlier this year, we expanded our capabilities by adding paid family and medical leave coverage to our portfolio in response to employer demand. Over the past year, covered lives increased 7% and year-to-date sales increased 67%. Building on that momentum, the recently completed acquisition of ESI, Employee Assistance Group, expands our employer value proposition with a comprehensive employee assistance and well-being solution. Employees gain access to experienced mental health counselors, financial coaching, legal support, and other resources that promote well-being and work-life balance. It also adds nearly 1 million covered lives, more than half of whom are educators and others who serve their communities. Employee Services is the first of the three Medical Mutual of Ohio transactions to close, with the remaining two expected to close in the first quarter of 2027. Once all three transactions are complete, we expect them to contribute approximately 40 to 50 cents of core earnings per share annually and add about 100 basis points to core shareholder return on equity. Moving on to property and casualty, core earnings increased 22% over the prior year. The combined ratio of 83.6% reflects strong underwriting performance, catastrophe losses below long-term averages, and favorable prior year reserve development. Property results were particularly strong, benefiting from relatively benign weather conditions during the quarter. Catastrophe losses were below both our five and ten-year averages for the quarter and remain well below historical averages through the first nine months of the year. In auto, we continue to be thoughtful and focused about where and when we grow. As we have said before, target profitability is a prerequisite for growth. Following significant rate and non-rate actions over the past several years, we now have that foundation in place across the business. In markets where larger actions were required, the effects on retention and new business take time to work through. We are seeing encouraging sales momentum in several markets where we see attractive returns and remain focused on delivering sustained profitable growth. Our third-party strategy complements this disciplined approach by helping us retain and continue serving the customer household and provide additional protection and financial solutions over time. In life and retirement, core earnings doubled over the prior year, supported by higher net investment income and strong life results, including a benefit from our annual review on actuarial assumptions. Life sales increased 3% over prior year quarter and 13% year to date, while retirement assets under administration increased 8% over the past year. In total, net investment income increased 17% over the prior year. Our limited partnership fund portfolio generated annualized returns of more than 20% for the quarter. That performance was well above our long-term expectation of approximately 8.5% and demonstrate the value of a diversified investment portfolio. At the same time, Higher reinvestment rates continue to support investment income growth in our core fixed income portfolio. Through the first nine months of the year, our core new money rate exceeded the portfolio book yield by more than 100 basis points, supporting continued growth in investment income over time. Together, the earnings and capital generated by our investment portfolio provide additional flexibility to fund strategic growth initiatives and create long-term shareholder value. Taking a step back, our strong third quarter results keep us on track to achieve the strategic financial goals we established at our investor day. Growing normalized core earnings per share at a 10% annual rate over the three-year period and delivering a sustainable core shareholder return on equity of at least 12 to 13%. The primary levers supporting those objectives are investing strategically in growth, optimizing expenses, and improving operating leverage. To drive growth, we continue to invest in our omnichannel approach to meeting more educators where they are. We are expanding partnerships with trusted brands such as Crayola with the next Crayola Creativity Week beginning in January. In addition, we continue to add professional development programs and other resources that help educators succeed in and out of the classroom. The Horace Mann Club, our centralized platform for financial wellness tools, classroom resources and educator benefits that we recently launched now has more than 18,000 users. We are also expanding our distribution capacity through exclusive agents, benefit specialists and contact center sales representatives. giving us more opportunities to serve educators across our businesses. At the same time, we continue to make progress on expense optimization and operating leverage. We remain on track to achieve our goal of 10 million in expense savings by the end of 2026, supporting our expectation for 25 to 50 basis points of expense ratio improvement for the full year. Our strong balance sheet allows us to invest in profitable growth while maintaining our commitment to shareholder returns. The recently announced acquisitions add new capabilities and sources of earnings without changing our capital allocation priorities. During the third quarter, we returned $16 million to shareholders through dividends and share repurchases, including $1 million in share repurchases. We have $36 million remaining under our current share repurchase authorization. Across our businesses, we are helping more educators succeed in and out of the classroom. We are partnering with more employers in more geographies to provide benefits that support employee retention and well-being. And we continue to evolve our products, distribution, and capabilities to meet the changing needs of our customers. We are operating from a position of strength. Our value proposition is built on providing meaningful solutions across the markets we serve. Together with our diversified earnings base and disciplined execution, this provides a strong foundation for sustained profitable growth. We remain on track to achieve our strategic financial objectives and continue to create long-term value for our shareholders. Thank you. And with that, I'll turn the call over to Ryan.