S&P: No Change in Horace Mann’s Ratings from Lower’s Exit

October 8, 2010

Standard & Poor’s Ratings Services said that its ratings on Horace Mann Educators Corp. (BBB/Stable/–) and its insurance operating subsidiaries are “unaffected by executive leadership changes within the group.”

The company has announced the retirement of President and CEO Louis Lower from his positions with the company, including his seat on the board. The board had placed Lower on a leave of absence on Sept. 9, 2010, following his sentencing in Florida on a misdemeanor charge of driving under the influence with property damage or personal injury.

The board has appointed CFO Peter Heckman, who had been serving as the interim CEO since Sept. 9, as the new President and CEO and elected him to the board. The company also announced that Dwayne Hallman, Senior Vice President, Finance, has been appointed as the new CFO.

S&P said it expects that both Heckman, Hallman, and the rest of the senior management team “will be able to provide appropriate executive leadership.” The rating agency also noted that both men “have had long tenures with the organization, having started in 2000 and 2003, respectively.

“We do not expect any major shifts to the company’s direction or the strategic initiatives that Horace Mann was implementing under Mr. Lower’s leadership,” S&P continued. “We view the management team as deep, broad, and without key-person concentration risk. In light of the recent events, however, we will continue to monitor for the effectiveness of communication between the board and senior management team toward maintaining a continued strong competitive and earnings profile.

S&P added that in relation to Lower’s recent situation, it has “not thus far seen any adverse competitive impact to the company with respect to policyholder retention, partnerships with administrator organizations, or relationships with distribution partners. We will continue to monitor the situation closely for any adverse developments.”

Source: Standard & Poor’s

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