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: May 3, 2005

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Forward-looking Information

Statements included in the accompanying press release that state Horace Mann Educators Corporation’s (the “Company”) or its management’s intentions, hopes, beliefs, expectations or predictions of future events or the Company’s future financial performance are forward-looking statements and involve known and unknown risks, uncertainties and other factors. Horace Mann is not under any obligation to (and expressly disclaims any such obligation to) update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements. Please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 and the Company’s past and future filings and reports filed with the Securities and Exchange Commission for information concerning the important factors that could cause actual results to differ materially from those in forward-looking statements.

Item 1.01: Entry into a Material Definitive Agreement

Effective May 3, 2005, the Bank Credit Agreement was amended to extend the commitment termination date to June 30, 2005 from the previous termination date of May 31, 2005. This amendment to the Bank Credit Agreement will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2005.

Item 1.02: Termination of a Material Definitive Agreement

Effective May 7, 2002, the Company entered into a 36-month equity put and reinsurance agreement with a subsidiary of Swiss Reinsurance Company, which provided a source of up to $75 million of contingent capital for catastrophe losses above the Company’s reinsurance coverage limits. Due to relatively unfavorable pricing and terms, the Company has elected not to renew this agreement on the May 7, 2005 expiration date. Management believes that the Company’s current catastrophe protection as well as other potential sources of capital would be sufficient in the event of excessive catastrophe losses.

Item 2.02: Results of Operations and Financial Condition

On May 4, 2005, Horace Mann Educators Corporation issued a press release reporting its financial results for the three month period ended March 31, 2005. A copy of the press release is attached as Exhibit 99.2 and is incorporated by reference herein.

Item 9.01: Financial Statements and Exhibits

(c) Exhibits.

99.1	Glossary of Selected Terms
99.2	Press release dated May 4, 2005 reporting financial results for the three month period ended March 31, 2005.

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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: May 4, 2005

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EX-99.1

Exhibit 99.1

Glossary of Selected Terms

The following measures are used by the Company’s management to evaluate performance against historical results and establish targets on a consolidated basis. A number of these measures are components of net income but, in some cases, may be considered non-GAAP financial measures under applicable SEC rules because they are not displayed as separate line items in the Consolidated Statement of Operations, and in some cases, require inclusion or exclusion of certain items not ordinarily included or excluded in a GAAP financial measure. In the opinion of the Company’s management, a discussion of these measures is meaningful to provide investors with an understanding of the significant factors that comprise the Company’s periodic results of operations.

Agent - A licensed representative of an insurer in marketing insurance products.

• Career agents - Agents under contract with the Company to market only the Company’s products and limited additional third-party vendor products authorized by the Company.

• Experienced agents - Career Agents with more than two years of experience with the Company. Their compensation is comprised of commissions and incentives.

• Financed agents - Career Agents in their first two years of employment with the Company. Their compensation is comprised of a base salary (subsidy) and commissions, with the base salary (subsidy) component declining as the agent gains more experience. Financed Agents are also eligible for incentives.

• Independent agents - Agents who are under contract with the Company to market the Company’s annuity products but who are not restricted to writing only the Company’s products and products authorized by the Company.

Catastrophe costs – The sum of catastrophe losses and property and casualty catastrophe reinsurance reinstatement premiums.

Catastrophe losses - In categorizing property and casualty claims as being from a catastrophe, the Company utilizes the designations of the Insurance Services Office, Inc. (“ISO”) and reports loss and loss adjustment expense amounts net of reinsurance recoverables. A catastrophe is a severe loss resulting from natural and man-made events within a particular territory, including risks such as fire, earthquake, windstorm, explosion, terrorism and other similar events, that causes $25 million or more in insured property and casualty losses for the industry and affects a significant number of property and casualty insurers and policyholders. Each catastrophe has unique characteristics. Catastrophes are not predictable as to timing or amount in advance, and therefore their effects are not included in earnings or claim and claim adjustment expense reserves prior to occurrence. In the opinion of the Company’s management, a discussion of the impact of catastrophes is meaningful for investors to understand the variability in periodic earnings.

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Net Reserves – Property and casualty unpaid claim and claim expense reserves net of anticipated reinsurance recoverables and after reduction of checks issued and outstanding.

Prior Years’ Reserve Development - A measure which the Company reports for its property and casualty segment which identifies the increase or decrease in net incurred claim and claim adjustment expense reserves at successive valuation dates for claims which occurred in previous calendar years. In the opinion of the Company’s management, a discussion of prior years’ loss reserve development is useful to investors as it allows them to assess the impact on current period earnings of incurred claims experience from the current calendar year and previous calendar years.

Property and casualty operating statistics - Operating measures utilized by the Company and the insurance industry regarding the relative profitability of property and casualty underwriting results.

• Loss Ratio or Loss and Loss Adjustment Expense Ratio - The ratio of (1) the sum of net incurred losses and loss adjustment expenses to (2) net earned premiums.

• Expense Ratio - The ratio of (1) the sum of operating expenses and the amortization of policy acquisition costs to (2) net earned premiums.

• Combined Ratio - The sum of the Loss Ratio and the Expense Ratio. A Combined Ratio less than 100% generally indicates profitable underwriting prior to the consideration of investment income.

Return on equity - The ratio of (1) trailing 12-month net income to (2) the average of ending shareholders’ equity for the current quarter end and the preceding four quarter ends.

Sales or Annualized New Sales - Sales represent the amount of new business sold during the period and exclude renewal of policies sold in previous periods. Sales are measured by the Company as premiums and deposits to be collected over the 12 months following the sale of a new policy, and this time period may extend into the following calendar year. Sales should not be viewed as a substitute for any financial measure determined in accordance with GAAP, including “sales” as it relates to non-insurance companies, and the Company’s definition of sales might differ from that used by other companies. The Company utilizes sales information as a performance measure that indicates the productivity of Career Agents and Independent Agents. Sales are also a leading indicator of future revenue trends.

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EX-99.2

Exhibit 99.2

[Horace Mann Educators Corporation logo]

Dwayne D. Hallman

Senior Vice President - Finance

Horace Mann Educators Corporation

(217) 788-5708

www.horacemann.com

HORACE MANN REPORTS RESULTS

FOR FIRST QUARTER

SPRINGFIELD, Ill., May 4, 2005 — Horace Mann Educators Corporation (NYSE:HMN) today reported net income of $26.6 million (57 cents per share) for the three months ended March 31, 2005, compared to $21.7 million (47 cents per share) for the same period in 2004. Included in net income were net realized gains on securities of $4.7 million ($3.1 million after tax, or 6 cents per share) for the current period, compared to $5.3 million ($3.4 million after tax, or 7 cents per share) for the first three months of 2004. All per-share amounts are stated on a diluted basis.

“Horace Mann produced strong earnings in the first quarter, primarily driven by continued strength in our property and casualty profit margins,” said Louis G. Lower II, President and Chief Executive Officer. “As in recent quarters, the underlying property and casualty results benefited from aggressive underwriting and pricing actions taken in 2003 and 2004, ongoing improvements in claims processes, cost containment initiatives, and a continuing low level of non-catastrophe claim frequencies,” Lower added.

Segment Earnings

The property and casualty segment recorded net income of $19.7 million for the quarter, an increase over the prior year primarily as a result of the factors cited above. Net income for the annuity segment of $2.4 million for the first three months was lower than prior year, due largely to valuations of deferred policy acquisition costs and value of acquired insurance in force. Annuity segment earnings for the current period also reflected a decline in the interest margin, which was partially offset by lower operating expenses. Life segment net income of $3.2 million for the quarter was up slightly compared to prior year, due primarily to the valuation of deferred policy acquisition costs.

Segment Revenues

The company’s premiums written and contract deposits decreased 5 percent for the quarter compared to the first three months of 2004. While the quality of the company’s automobile and property business continues to improve, increases in average premium per policy for both lines were more than offset by the decline in policies in force. The decrease in annuity new contract deposits was due primarily to a reduction in single premium and rollover deposit receipts, partially offset by growth in new scheduled annuity

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deposits compared to the prior year. While deposits to fixed accounts decreased in the current low interest rate environment, variable annuity deposits increased compared to a year earlier. Life segment insurance premiums and contract deposits were somewhat lower than in the first three months of 2004, primarily reflecting the shift in sales mix toward partner products.

Sales and Distribution

Compared to a record level of annuity sales in the prior year, total new annuity sales decreased 18 percent in the first quarter. This decline was due primarily to a lower level of annuity new business from independent agents, reflecting the company’s desired shift in mix of business from this channel. While total career agent sales decreased in the current period compared to a year earlier in all product lines, average productivity per agent was comparable to the prior year’s level.

Horace Mann’s career agency force totaled 820 agents at March 31, 2005. “While the agency force is smaller than it was a year ago, the number of experienced agents has increased in each of the last four quarters,” Lower said. “The total number of agents increased during the first quarter compared to the end of last year and we anticipate continued, although more moderate, growth throughout 2005.”

Horace Mann — the largest national multiline insurance company focusing on educators’ financial needs — provides auto and homeowners insurance, retirement annuities, life insurance and other financial solutions. Founded by educators for educators in 1945, the company is headquartered in Springfield, Ill. For more information, visit www.horacemann.com.

Statements included in this news release that are not historical in nature are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties. Horace Mann is not under any obligation to (and expressly disclaims any such obligation to) update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2004 and the company’s past and future filings and reports filed with the Securities and Exchange Commission for information concerning the important factors that could cause actual results to differ materially from those in forward-looking statements.

# # #

HORACE MANN EDUCATORS CORPORATION

Digest of Earnings and Highlights

(Dollars in Millions, Except Per Share Data)

	Three Months Ended March 31,
	2005			2004			% Change
DIGEST OF EARNINGS
Net income	$	26.6		$	21.7		22.6	%
Net income per share:
Basic	$	0.62		$	0.51		21.6	%
Diluted (A)	$	0.57		$	0.47		21.3	%
Weighted average number of shares and equivalent shares:
Basic		42.9			42.7
Diluted (A)		47.6			47.3
HIGHLIGHTS
Operations
Insurance premiums written and contract deposits	$	233.7		$	244.8		-4.5	%
Return on equity (B)		11.1	%		5.9	%
Property & Casualty GAAP combined ratio		86.4	%		93.5	%
Property & Casualty combined ratio before catastrophes		85.3	%		92.6	%
Experienced agents		553			496		11.5	%
Financed agents		267			334		-20.1	%
Total agents		820			830		-1.2	%
Additional Per Share Information
Dividends paid	$	0.105		$	0.105		—
Book value (C)	$	13.01		$	13.50		-3.6	%
Financial Position
Total assets	$	5,577.5		$	5,487.9		1.6	%
Short-term debt		25.0			25.0
Long-term debt		144.7			144.7
Total shareholders’ equity		557.9			576.5		-3.2	%

(A) Effective December 31, 2004, the Company adopted EITF Consensus 04-8, “The Effect of Contingently Convertible Instruments on Diluted Earnings per Share”. The Company’s Senior Convertible Notes represent 4.3 million equivalent shares and have annual interest expense of $2.7 million after tax. Diluted per share information for all periods is presented on a basis consistent with this consensus.

(B) Based on trailing 12-month net income and average quarter-end shareholders’ equity.

(C) Before the market value adjustment for investments, book value per share was $11.96 at March 31, 2005 and $10.91 at March 31, 2004. Ending shares outstanding were 42,878,328 at March 31, 2005, 42,846,643 at December 31, 2004 and 42,722,701 at March 31, 2004.

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HORACE MANN EDUCATORS CORPORATION

Statements of Operations and Supplemental GAAP Consolidated Data

(Dollars in Millions)

	Three Months Ended March 31,
	2005			2004			% Change
STATEMENTS OF OPERATIONS
Insurance premiums written and contract deposits	$	233.7		$	244.8		-4.5	%
Insurance premiums and contract charges earned	$	168.3		$	167.6		0.4	%
Net investment income		47.6			48.6		-2.1	%
Realized investment gains		4.7			5.3
Total revenues		220.6			221.5		-0.4	%
Benefits, claims and settlement expenses		103.0			111.5
Interest credited		28.1			26.4
Policy acquisition expenses amortized		18.3			16.4
Operating expenses		30.2			33.6		-10.1	%
Amortization of intangible assets		1.8			1.3
Interest expense		1.8			1.7
Total benefits, losses and expenses		183.2			190.9		-4.0	%
Income before income taxes		37.4			30.6		22.2	%
Income tax expense		10.8			8.9
Net income	$	26.6		$	21.7		22.6	%
ANALYSIS OF PREMIUMS WRITTEN AND CONTRACT DEPOSITS
Property & Casualty
Automobile and property (voluntary)	$	131.4		$	134.0		-1.9	%
Involuntary and other property & casualty		0.2			0.7
Total Property & Casualty		131.6			134.7		-2.3	%
Annuity deposits		77.5			84.2		-8.0	%
Life		24.6			25.9		-5.0	%
Total	$	233.7		$	244.8		-4.5	%
ANALYSIS OF SEGMENT NET INCOME
Property & Casualty
Before catastrophes	$	20.7		$	13.9		48.9	%
Catastrophe costs, after tax		(1.0	)		(0.8	)
Total Property & Casualty		19.7			13.1		50.4	%
Annuity		2.4			3.9		-38.5	%
Life		3.2			3.1		3.2	%
Corporate and other (A)		1.3			1.6
Net income		26.6			21.7		22.6	%

(A) The Corporate and Other segment includes interest expense on debt and the impact of realized investment gains and losses and other reconciling items to net income. The Company does not allocate the impact of corporate level transactions to the insurance segments consistent with management’s evaluation of the results of those segments. See detail for this segment on page 4.

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HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview

(Dollars in Millions)

	Three Months Ended March 31,
	2005			2004			% Change
PROPERTY & CASUALTY
Premiums written	$	131.6		$	134.7		-2.3	%
Premiums earned		140.3			139.6		0.5	%
Net investment income		8.0			8.8		-9.1	%
Losses and loss adjustment expenses (LAE)		91.4			99.6
Operating expenses (includes policy acquisition expenses amortized)		29.9			31.3		-4.5	%
Income before tax		27.0			17.5		54.3	%
Net income		19.7			13.1		50.4	%
Net investment income, after tax		6.8			7.3		-6.8	%
Catastrophe costs, after tax		1.0			0.8
Catastrophe losses and LAE, before tax		1.6			1.2
Reinsurance reinstatement premiums, before tax		—			—
Operating statistics:
Loss and loss adjustment expense ratio		65.2	%		71.3	%
Expense ratio		21.2	%		22.2	%
Combined ratio		86.4	%		93.5	%
Combined ratio before catastrophes		85.3	%		92.6	%
Automobile and property detail:
Premiums written (voluntary)		131.4			134.0		-1.9	%
Automobile		98.4			102.3		-3.8	%
Property		33.0			31.7		4.1	%
Premiums earned (voluntary)		138.4			137.5		0.7	%
Automobile		98.2			100.2		-2.0	%
Property		40.2			37.3		7.8	%
Policies in force (voluntary) (in thousands)		807			843		-4.3	%
Automobile		537			565		-5.0	%
Property		270			278		-2.9	%
Voluntary automobile operating statistics:
Loss and loss adjustment expense ratio		69.6	%		73.4	%
Expense ratio		21.4	%		22.0	%
Combined ratio		91.0	%		95.4	%
Combined ratio before catastrophes		90.9	%		95.3	%
Total property operating statistics:
Loss and loss adjustment expense ratio		51.9	%		60.0	%
Expense ratio		20.8	%		22.4	%
Combined ratio		72.7	%		82.4	%
Combined ratio before catastrophes		69.0	%		79.4	%
Prior years’ reserves favorable (adverse) development, pretax
Voluntary automobile	$	—		$	—
Total property		—			—
Other property and casualty		—			—
Total		—			—

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HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview

(Dollars in Millions)

	Three Months Ended March 31,
	2005			2004			% Change
ANNUITY
Contract deposits	$	77.5		$	84.2		-8.0	%
Variable		32.1			31.2		2.9	%
Fixed		45.4			53.0		-14.3	%
Contract charges earned		4.3			4.2		2.4	%
Net investment income		27.7			27.4		1.1	%
Net interest margin (without realized gains)		8.1			9.1		-11.0	%
Mortality gain (loss) and other reserve changes		0.1			(0.1	)
Operating expenses (includes policy acquisition expenses amortized)		7.7			6.5		18.5	%
Income before tax and amortization of intangible assets		4.8			6.7		-28.4	%
Amortization of intangible assets		1.4			0.9
Income before tax		3.4			5.8		-41.4	%
Net income		2.4			3.9		-38.5	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	(1.4	)	$	0.4
Value of acquired insurance in force		(0.4	)		—
Guaranteed minimum death benefit reserve		(0.1	)		0.1
Annuity contracts in force (in thousands)		159			154		3.2	%
Accumulated value on deposit	$	3,087.4		$	2,831.5		9.0	%
Variable		1,231.7			1,137.5		8.3	%
Fixed		1,855.7			1,694.0		9.5	%
Annuity accumulated value retention - 12 months
Variable accumulations		92.9	%		92.9	%
Fixed accumulations		95.4	%		95.2	%
LIFE
Premiums and contract deposits	$	24.6		$	25.9		-5.0	%
Premiums and contract charges earned		23.7			23.8		-0.4	%
Net investment income		12.2			12.7		-3.9	%
Income before tax		5.0			4.8		4.2	%
Net income		3.2			3.1		3.2	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	0.6		$	(0.1	)
Life policies in force (in thousands)		250			256		-2.3	%
Life insurance in force (in millions)	$	13,241		$	13,272		-0.2	%
Lapse ratio - 12 months (Ordinary life insurance)		7.2	%		7.2	%
CORPORATE AND OTHER (A)
Components of gain before tax:
Realized investment gains	$	4.7		$	5.3
Interest expense		(1.8	)		(1.7	)
Other operating expenses		(0.9	)		(1.1	)
Income before tax		2.0			2.5
Net income		1.3			1.6

(A) The Corporate and Other segment includes interest expense on debt and the impact of realized investment gains and losses and other reconciling items to net income. The Company does not allocate the impact of corporate level transactions to the insurance segments consistent with management’s evaluation of the results of those segments.

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HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview

(Dollars in Millions)

	Three Months Ended March 31,
	2005		2004		% Change
INVESTMENTS
Annuity and Life
Fixed maturities, at market (amortized cost 2005, $2,752.8; 2004, $2,522.6)	$	2,823.9	$	2,682.1
Short-term investments		10.3		59.4
Short-term investments, securities lending collateral		253.2		385.9
Policy loans and other		83.7		79.8
Total Annuity and Life investments		3,171.1		3,207.2	-1.1	%
Property & Casualty
Fixed maturities, at market (amortized cost 2005, $704.0; 2004, $634.5)		707.7		656.8
Short-term investments		9.6		41.1
Short-term investments, securities lending collateral		2.0		0.9
Other		0.5		0.7
Total Property & Casualty investments		719.8		699.5	2.9	%
Corporate investments		0.2		0.6
Total investments		3,891.1		3,907.3	-0.4	%
Net investment income
Before tax	$	47.6	$	48.6	-2.1	%
After tax		32.5		33.2	-2.1	%
Realized investment gains by investment portfolio included in Corporate and Other segment income
Property & Casualty	$	—	$	2.3
Annuity		4.7		2.1
Life		—		0.9
Corporate and Other		—		—
Total, before tax		4.7		5.3
Total, after tax		3.1		3.4
Per share, diluted	$	0.06	$	0.07
OTHER INFORMATION
End of period goodwill asset	$	47.4	$	47.4
End of period property and casualty net reserves (A):
March 31, 2005	$	313.2
December 31, 2004		309.3
December 31, 2003		283.7
December 31, 2002		231.0
December 31, 2001		241.6
December 31, 2000		223.0
December 31, 1999		206.8

(A) Unpaid claim and claim expense reserves net of anticipated reinsurance recoverables and reduced for checks issued and outstanding.

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