Best Affirms Horace Mann’s ‘A-‘ Ratings

June 15, 2009

A.M. Best Co. has affirmed the financial strength ratings (FSR) of ‘A-‘ (Excellent) and issuer credit ratings (ICR) of “a-” of Horace Mann Educators Corporation’s (HMEC) P/C group, Horace Mann Insurance Group, its members and HMEC’s life/health insurance company, Horace Mann Life Insurance Company. Best also affirmed the ICR of “bbb-” and debt ratings of HMEC. The outlook for all ratings is stable.

Best said the affirmations reflect the group’s “adequate level of capitalization, stable operating results driven by recent underwriting and operating improvements that helped the group to weather a very volatile year in 2008 in terms of weather and investment markets.

“Supplementing these factors was the group’s continued expertise in writing personal lines products in the educator market, which has enabled it to obtain numerous endorsements from local, state and national educational associations. These strengths are partially offset by Horace Mann’s continued above-average underwriting leverage measures and the ever present susceptibility of its property book to severe weather, as seen in 2008.”

Best also pointed out that Horace Mann Life’s ratings “recognize its key role within HMEC and the benefits derived from HMEC’s strong business franchise in the K-12 educators market and historical growth in the 403(b) tax qualified annuity market,” as well as its “solid stand-alone risk-adjusted capitalization for its current insurance and investment risks.”

Best also noted that “HMEC continues to operate through a corporate structure that affords its financial flexibility as a publicly traded holding company with access to the capital markets, moderate financial leverage and historically solid fixed charge coverage.”

Best summarized its on Horace Mann ratings as follows:
The FSR of ‘A-‘ (Excellent) and ICRs of “a-” have been affirmed for Horace Mann Insurance Group and its following members:
— Horace Mann Insurance Company
— Horace Mann Property & Casualty Insurance Company
— Teachers Insurance Company
— Horace Mann Lloyds

The FSR of ‘A-‘ (Excellent) and ICR of “a-” have been affirmed for Horace Mann Life Insurance Company.

The ICR of “bbb-” has been affirmed for Horace Mann Educators Corporation.

The following debt ratings have been affirmed:
Horace Mann Educators Corporation—
— “bbb-” on $75 million 6.05 percent senior unsecured notes, due 2015
— “bbb-” on $125 million 6.85 percent senior unsecured notes due 2016

The following indicative ratings have been affirmed on securities available under the $300 million shelf registration:
Horace Mann Educators Corporation:
— “bbb-” on senior unsecured debt
— “bb+” on subordinated debt
— “bb” on preferred stock

Source: A.M. Best –

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