-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B3yVCeukTstRgKB7ToCkiKW6/V6MQzixohARuysPQC7eD4W0ZmAo8omEc1Zs+r1n dx7L+iZKQHA8VfmMEQJvzQ== 0001193125-03-096493.txt : 20031218 0001193125-03-096493.hdr.sgml : 20031218 20031218153352 ACCESSION NUMBER: 0001193125-03-096493 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031217 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HORACE MANN EDUCATORS CORP /DE/ CENTRAL INDEX KEY: 0000850141 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 370911756 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10890 FILM NUMBER: 031062347 BUSINESS ADDRESS: STREET 1: 1 HORACE MANN PLZ CITY: SPRINGFIELD STATE: IL ZIP: 62715-0001 BUSINESS PHONE: 2177892500 MAIL ADDRESS: STREET 1: 1 HORACE MANN PLZ CITY: SPRINGFIELD STATE: IL ZIP: 62715-0001 FORMER COMPANY: FORMER CONFORMED NAME: HORACE MANN EDUCATORS CORP DATE OF NAME CHANGE: 19920108 8-K 1 d8k.txt FORM 8-K ================================================================================ - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: December 17, 2003 HORACE MANN EDUCATORS CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-10890 37-0911756 (State of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 1 Horace Mann Plaza, Springfield, Illinois 62715-0001 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: 217-789-2500 - -------------------------------------------------------------------------------- ================================================================================ Item 5: Other Events and Regulation FD Disclosure On December 17, 2003, Standard & Poor's Ratings Services issued a press release announcing downgrades of Horace Mann Educators Corporation's insurance financial strength ratings (to "A" from "A+") and senior debt ratings (to "BBB" from "BBB+"). The outlook for these ratings is negative. A copy of the press release is attached as Exhibit 99.1 and is incorporated by reference herein. Item 7: Financial Statements and Exhibits (c) Exhibits. 99.1 Press release issued by Standard & Poor's Ratings Services on December 17, 2003 regarding the insurance financial strength and senior debt ratings of Horace Mann Educators Corporation. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HORACE MANN EDUCATORS CORPORATION By: /s/ Bret A. Conklin ------------------------------------------- Name: Bret A. Conklin Title: Senior Vice President & Controller (Principal Accounting Officer) Date: December 18, 2003 1 EX-99.1 3 dex991.txt PRESS RELEASE Exhibit 99.1 [Standard & Poor's logo] Horace Mann Educators Corp. Ratings Lowered, Removed From Watch; Outlook Negative Analyst: Jose Siberon, CFA, FSA, New York (1) 212-438-7239; Siddhartha Ghosh, New York (1) 212 438 1466 - -------------------------------------------------------------------------------- NEW YORK (Standard & Poor's) Dec. 17, 2003--Standard & Poor's Ratings Services said today that it lowered its counterparty credit rating on Horace Mann Educators Corp. (NYSE:HMN) to `BBB' from `BBB+'. At the same time, Standard & Poor's lowered its counterparty credit and financial strength ratings on Horace Mann Property and Casualty Insurance Co., Horace Mann Insurance Co., Teachers Insurance Co., and Horace Mann Life Insurance Co. to `A' from `A+' and subsequently removed all the ratings from CreditWatch. The outlook is negative. In addition, Standard & Poor's assigned its `BBB' preliminary senior debt rating, `BBB-' preliminary subordinated debt rating, and `BB+' preliminary preferred stock rating to HMN's $300 million mixed-use shelf registration, which was filed on Dec. 16, 2003. The ratings were placed on CreditWatch with negative implications on Oct. 28, 2003, following HMN's announcement of lower than expected earnings in 2003 due to adverse prior years' reserve development primarily related to its voluntary auto liability claims from accident years 2001 and 2002. "The ratings actions are based on weak earnings and low interest coverage ratios, which incorporates an announced pretax net reserve charge of $44.3 million for the first nine months of 2003 and spread compression at the life company," explained Standard & Poor's credit analyst Jose Siberon. "The current year reserve charge is in addition to a pretax net reserve charge of $24 million in 2002." In addition, the business position and competitive advantage of the Horace Mann property/casualty (P/C) group has weakened modestly as a result of stronger competition and low market share in the personal lines industry, and an expected 2003 calendar-year combined ratio, which is well above the industry 1 average (more than 100%). These negative factors are offset by a strengthened agency force, improved agent productivity, strong franchise in the educators market for 403(b) fixed annuities, strong growth in annuity deposits, and very strong total group's capital (though weakened P/C capitalization), and adequate financial flexibility. The proceeds from any drawdowns under the shelf are expected to be used for debt repayment and general corporate purposes. Any draw down is not expected to increase financial leverage more than Standard & Poor's previous expectation of 30% and interest rate coverage between 4X-6X. Standard & Poor's views all of HMN's operating companies as CORE to each other and therefore they share the same ratings. The outlook is negative due to potential future uncertainties related to further adverse reserve developments, which might effectively dampen the company's operating earnings potential. In addition, the overall group's earnings are expected to be affected by further spread compression at the life company and potentially more reserves additions in the P/C group. The overall 2004 GAAP pretax operating earnings excluding realized gains and losses are expected to be more than $50 million and the holding company coverage ratios (using earnings before interest and taxes) are expected to be more than 5X. The P/C-group combined ratio is expected to be less than 101% for 2004 with growth in net premium expected to be 7%-8%. The annuity growth is expected to be 8%-10%. Standard & Poor's risk based capital ratio is expected to remain more than 165% for the group and more than the current level of 135% for the P/C group; however, the current ratings could be lowered by at least one notch if the magnitude of any future net reserve strengthening equals or exceeds 10% of its held reserve. The company was founded in Springfield, Ill. in 1945 to sell auto insurance to teachers in the state. The company has since expanded its product mix to include homeowners', group and individual life insurance, and tax qualified retirement annuities. The company's strategy is focused on adding value for its customers by providing a full range of financial products and outstanding service to the educator market on the premise that educators represent a stable, underserved clientele. 2 Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Credit Ratings Actions. 3 -----END PRIVACY-ENHANCED MESSAGE-----