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: August 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 2.02: Results of Operations and Financial Condition

On August 3, 2005, Horace Mann Educators Corporation issued a press release reporting its financial results for the three and six month periods ended June 30, 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 August 3, 2005 reporting financial results for the three and six month periods ended June 30, 2005.

1

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: August 3, 2005

2

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 SECOND QUARTER

SPRINGFIELD, Ill., August 3, 2005 — Horace Mann Educators Corporation (NYSE:HMN) today reported net income of $33.6 million (72 cents per share) and $60.2 million ($1.29 per share), respectively, for the three and six months ended June 30, 2005, compared to net income of $18.9 million (41 cents per share) and $40.6 million (89 cents per share) for the same periods in 2004. Included in net income were net realized gains on securities of $4.3 million ($2.8 million after tax, or 7 cents per share) and $9.0 million ($5.9 million after tax, or 13 cents per share) for the three and six months ended June 30, 2005, respectively, compared to net realized losses on securities of $0.8 million ($0.5 million after tax, or 2 cents per share) for the second quarter of 2004 and net realized gains of $4.5 million ($2.9 million after tax, or 6 cents per share) for the six months ended June 30, 2004. All per-share amounts are stated on a diluted basis.

“Horace Mann produced strong earnings again in the second quarter, primarily driven by continued strength in property and casualty profit margins,” said Louis G. Lower II, President and Chief Executive Officer. “As in recent quarters, our underlying auto and homeowners 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. And, along with the industry, we also benefited in the quarter from a relatively low level of catastrophe losses,” Lower added.

In addition to the strong operating results, Horace Mann received IRS refunds in the current quarter, including amounts related to tax years 1996 and 1997, which are now deemed to be closed. This resulted in the elimination of the contingent tax liability related to those two years which reduced second quarter 2005 federal income tax expense by $2.7 million. In addition, $1.4 million of interest on the tax refund amounts was received and recorded as pretax income in the current quarter.

“Based on results for the first half of the year, we are increasing our estimate of full year 2005 net income before realized investment gains and losses by 25 cents to between $1.80 and $1.90 per share,” said Lower. “In addition to the second quarter tax refund benefit, this projection reflects continued favorable property and casualty underwriting trends, while remaining appropriately cautious regarding potential catastrophe losses in the second half of the year.”

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Segment Earnings

Net income for the property and casualty segment improved $7.0 million for the quarter and $13.6 million for the six months compared to the prior year periods primarily as a result of the factors cited above. Net income for the annuity segment of $3.1 million for the second quarter was $0.4 million greater than prior year, as increased contract charges and fees, lower mortality and benefit costs and tax refund interest more than offset increased amortization of deferred policy acquisition costs and value of acquired insurance in force. For the six months ended June 30, 2005, annuity segment net income declined $1.1 million primarily as a result of valuations of deferred policy acquisition costs and value of acquired insurance in force. Annuity segment earnings for the current periods also reflected declines in the interest margin, which were partially offset by lower operating expenses. Life segment net income increased approximately $2 million for both the quarter and six months compared to prior year, due primarily to lower expenses, including a favorable impact from the valuation of deferred policy acquisition costs between periods.

Segment Revenues

The company’s premiums written and contract deposits decreased 3 percent and 4 percent compared to the quarter and six months of the prior year, respectively. For property and casualty, premiums written declined as increases in average automobile and homeowners premium per policy — which were moderated to some extent by the improvement in quality in the books of business — 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 deposits compared to the prior year. Deposits to fixed accounts decreased in the current low interest rate environment, while variable annuity deposits increased compared to a year earlier. Life segment insurance premiums and contract deposits were somewhat lower than in the first half of 2004, primarily reflecting the shift in sales mix toward partner products.

Sales and Distribution

Compared to record levels of annuity sales in the prior year, total new annuity sales decreased 11 percent in the first half of 2005. 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, second quarter results reduced the rate of decline for annuity, homeowners and auto. On a year-to-date basis, total average productivity per agent in 2005 was comparable to the prior year.

Horace Mann’s career agency force totaled 837 agents at June 30, 2005. “In addition to the number of experienced agents increasing in each of the last five quarters, the agency force is now larger than it was a year ago,” Lower said. “The total number of agents increased during both the first and second quarters compared to the end of last year. And we anticipate continued although more moderate, growth throughout the remainder of this year.”

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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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 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)

	Quarter Ended June 30,								Six Months Ended June 30,
	2005			2004			% Change		2005			2004			% Change
DIGEST OF EARNINGS
Net income	$	33.6		$	18.9		77.8	%	$	60.2		$	40.6		48.3	%
Net income per share:
Basic	$	0.78		$	0.44		77.3	%	$	1.40		$	0.95		47.4	%
Diluted (A)	$	0.72		$	0.41		75.6	%	$	1.29		$	0.89		44.9	%
Weighted average number of shares and equivalent shares:
Basic		42.9			42.7					42.9			42.7
Diluted (A)		47.8			47.3					47.8			47.3
HIGHLIGHTS
Operations
Insurance premiums written and contract deposits	$	247.4		$	256.1		-3.4	%	$	481.1		$	500.9		-4.0	%
Return on equity (B)										13.5	%		9.0	%
Property & Casualty GAAP combined ratio		84.3	%		90.8	%				85.4	%		92.2	%
Property & Casualty combined ratio before catastrophes		82.2	%		89.0	%				83.7	%		90.8	%
Experienced agents										573			503		13.9	%
Financed agents										264			302		-12.6	%
Total agents										837			805		4.0	%
Additional Per Share Information
Dividends paid	$	0.105		$	0.105		—		$	0.21		$	0.21		—
Book value (C)									$	14.79		$	11.77		25.7	%
Financial Position
Total assets									$	5,824.2		$	5,398.6		7.9	%
Short-term debt										—			25.0
Long-term debt										190.9			144.7
Total shareholders’ equity										634.4			503.4		26.0	%

(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 $12.64 at June 30, 2005 and $11.22 at June 30, 2004.

Ending shares outstanding were 42,894,078 at June 30, 2005, 42,846,643 at December 31, 2004 and 42,759,953 at June 30, 2004.

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HORACE MANN EDUCATORS CORPORATION

Statements of Operations and Supplemental GAAP Consolidated Data

(Dollars in Millions)

	Quarter Ended June 30,								Six Months Ended June 30,
	2005			2004			% Change		2005			2004			% Change
STATEMENTS OF OPERATIONS
Insurance premiums written and contract deposits	$	247.4		$	256.1		-3.4	%	$	481.1		$	500.9		-4.0	%
Insurance premiums and contract charges earned	$	168.2		$	169.1		-0.5	%	$	336.5		$	336.7		-0.1	%
Net investment income		48.4			46.9		3.2	%		96.0			95.5		0.5	%
Realized investment gains (losses)		4.3			(0.8	)				9.0			4.5
Total revenues		220.9			215.2		2.6	%		441.5			436.7		1.1	%
Benefits, claims and settlement expenses		95.0			106.9					198.0			218.4
Interest credited		28.6			26.9					56.7			53.3
Policy acquisition expenses amortized		18.9			17.4					37.2			33.8
Operating expenses		30.6			34.6		-11.6	%		60.8			68.2		-10.9	%
Amortization of intangible assets		1.3			1.2					3.1			2.5
Interest expense (A)		2.5			1.7					4.3			3.4
Total benefits, losses and expenses		176.9			188.7		-6.3	%		360.1			379.6		-5.1	%
Income before income taxes		44.0			26.5		66.0	%		81.4			57.1		42.6	%
Income tax expense (B)		10.4			7.6					21.2			16.5
Net income	$	33.6		$	18.9		77.8	%	$	60.2		$	40.6		48.3	%
ANALYSIS OF PREMIUMS WRITTEN     AND CONTRACT DEPOSITS
Property & Casualty
Automobile and property (voluntary)	$	137.4		$	142.8		-3.8	%	$	268.8		$	276.8		-2.9	%
Involuntary and other property & casualty		1.1			0.6					1.3			1.3
Total Property & Casualty		138.5			143.4		-3.4	%		270.1			278.1		-2.9	%
Annuity deposits		82.0			85.8		-4.4	%		159.5			170.0		-6.2	%
Life		26.9			26.9		—			51.5			52.8		-2.5	%
Total	$	247.4		$	256.1		-3.4	%	$	481.1		$	500.9		-4.0	%
ANALYSIS OF SEGMENT NET INCOME
Property & Casualty
Before catastrophes	$	24.1		$	16.8		43.5	%	$	44.8		$	30.7		45.9	%
Catastrophe costs, after tax		(1.9	)		(1.6	)				(2.9	)		(2.4	)
Total Property & Casualty		22.2			15.2		46.1	%		41.9			28.3		48.1	%
Annuity		3.1			2.7		14.8	%		5.5			6.6		-16.7	%
Life		4.9			3.2		53.1	%		8.1			6.3		28.6	%
Corporate and other (C)		3.4			(2.2	)				4.7			(0.6	)
Net income		33.6			18.9		77.8	%		60.2			40.6		48.3	%

(A) The three and six months ended June 30, 2005 include costs of $0.5 million as a result of retiring the 6 5/8% Senior Notes due 2006.

(B) The three and six months ended June 30, 2005 reflect a reduction of $2.7 million as a result of closing tax years 1996 and 1997 with favorable resolution of the contingent tax liabilities. The Company also received interest on income tax refunds of $1.4 million pretax reflected as a reduction to Operating Expenses above.

(C) 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)

	Quarter Ended June 30,								Six Months Ended June 30,
	2005			2004			% Change		2005			2004			% Change
PROPERTY & CASUALTY
Premiums written	$	138.5		$	143.4		-3.4	%	$	270.1		$	278.1		-2.9	%
Premiums earned		139.3			141.4		-1.5	%		279.6			281.0		-0.5	%
Net investment income		8.4			8.2		2.4	%		16.4			17.0		-3.5	%
Losses and loss adjustment expenses (LAE)		85.4			96.7					176.8			196.3
Operating expenses (includes policy acquisition expenses amortized)		31.2			31.9		-2.2	%		61.1			63.2		-3.3	%
Income before tax		31.1			21.0		48.1	%		58.1			38.5		50.9	%
Net income		22.2			15.2		46.1	%		41.9			28.3		48.1	%
Net investment income, after tax		7.1			7.0		1.4	%		13.9			14.3		-2.8	%
Catastrophe costs, after tax		1.9			1.6					2.9			2.4
Catastrophe losses and LAE, before tax		2.4			2.5					4.0			3.7
Reinsurance reinstatement premiums, before tax		0.5			—					0.5			—
Operating statistics:
Loss and loss adjustment expense ratio		61.3	%		68.5	%				63.3	%		69.9	%
Expense ratio		23.0	%		22.3	%				22.1	%		22.3	%
Combined ratio		84.3	%		90.8	%				85.4	%		92.2	%
Combined ratio before catastrophes		82.2	%		89.0	%				83.7	%		90.8	%
Automobile and property detail:
Premiums written (voluntary)		137.4			142.8		-3.8	%		268.8			276.8		-2.9	%
Automobile		94.0			99.8		-5.8	%		192.4			202.1		-4.8	%
Property		43.4			43.0		0.9	%		76.4			74.7		2.3	%
Premiums earned (voluntary)		136.8			139.4		-1.9	%		275.2			276.9		-0.6	%
Automobile		96.7			101.4		-4.6	%		194.9			201.6		-3.3	%
Property		40.1			38.0		5.5	%		80.3			75.3		6.6	%
Policies in force (voluntary) (in thousands)										801			837		-4.3	%
Automobile										533			561		-5.0	%
Property										268			276		-2.9	%
Voluntary automobile operating statistics:
Loss and loss adjustment expense ratio		67.9	%		71.1	%				68.8	%		72.2	%
Expense ratio		23.4	%		22.4	%				22.4	%		22.2	%
Combined ratio		91.3	%		93.5	%				91.2	%		94.4	%
Combined ratio before catastrophes		91.0	%		93.0	%				90.9	%		94.2	%
Total property operating statistics:
Loss and loss adjustment expense ratio		43.1	%		59.8	%				47.5	%		59.9	%
Expense ratio		22.4	%		22.0	%				21.6	%		22.2	%
Combined ratio		65.5	%		81.8	%				69.1	%		82.1	%
Combined ratio before catastrophes		59.5	%		76.3	%				64.2	%		77.9	%
Prior years’ reserves favorable (adverse) development, pretax
Voluntary automobile	$	0.6		$	—				$	0.6		$	—
Total property		1.0			—					1.0			—
Other property and casualty		—			—					—			—
Total		1.6			—					1.6			—

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HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview

(Dollars in Millions)

	Quarter Ended June 30,								Six Months Ended June 30,
	2005			2004			% Change		2005			2004			% Change
ANNUITY
Contract deposits	$	82.0		$	85.8		-4.4	%	$	159.5		$	170.0		-6.2	%
Variable		35.8			34.6		3.5	%		67.9			65.8		3.2	%
Fixed		46.2			51.2		-9.8	%		91.6			104.2		-12.1	%
Contract charges earned		4.4			4.1		7.3	%		8.7			8.3		4.8	%
Net investment income		27.9			26.8		4.1	%		55.6			54.2		2.6	%
Net interest margin (without realized gains)		7.8			8.1		-3.7	%		15.9			17.2		-7.6	%
Mortality gain (loss) and other reserve changes		—			(0.6	)				0.1			(0.7	)
Operating expenses (includes policy acquisition expenses amortized)		6.9			6.9		—			14.6			13.4		9.0	%
Income before tax and amortization of intangible assets		5.3			4.7		12.8	%		10.1			11.4		-11.4	%
Amortization of intangible assets		0.9			0.8					2.3			1.7
Income before tax		4.4			3.9		12.8	%		7.8			9.7		-19.6	%
Net income		3.1			2.7		14.8	%		5.5			6.6		-16.7	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	(1.0	)	$	—				$	(2.4	)	$	0.4
Value of acquired insurance in force		—			0.1					(0.4	)		0.1
Guaranteed minimum death benefit reserve		—			—					(0.1	)		0.1
Annuity contracts in force (in thousands)										160			156		2.6	%
Accumulated value on deposit									$	3,157.4		$	2,908.2		8.6	%
Variable										1,262.0			1,165.5		8.3	%
Fixed										1,895.4			1,742.7		8.8	%
Annuity accumulated value retention - 12 months
Variable accumulations										92.4	%		93.4	%
Fixed accumulations										95.1	%		95.5	%
LIFE
Premiums and contract deposits	$	26.9		$	26.9		—		$	51.5		$	52.8		-2.5	%
Premiums and contract charges earned		24.5			23.6		3.8	%		48.2			47.4		1.7	%
Net investment income		12.2			12.2		—			24.4			24.9		-2.0	%
Income before tax		7.6			5.0		52.0	%		12.6			9.8		28.6	%
Net income		4.9			3.2		53.1	%		8.1			6.3		28.6	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	(0.1	)	$	(0.6	)			$	0.5		$	(0.7	)
Life policies in force (in thousands)										245			254		-3.5	%
Life insurance in force (in millions)									$	13,228		$	13,253		-0.2	%
Lapse ratio - 12 months (Ordinary life insurance)										6.9	%		7.3	%
CORPORATE AND OTHER (A)
Components of gain (loss) before tax:
Realized investment gains (losses)	$	4.3		$	(0.8	)			$	9.0		$	4.5
Interest expense		(2.5	)		(1.7	)				(4.3	)		(3.4	)
Other operating expenses		(0.9	)		(0.9	)				(1.8	)		(2.0	)
Income (loss) before tax		0.9			(3.4	)				2.9			(0.9	)
Net income (loss)		3.4			(2.2	)				4.7			(0.6	)

(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)

	Quarter Ended June 30,								Six Months Ended June 30,
	2005			2004			% Change		2005			2004		% Change
INVESTMENTS
Annuity and Life
Fixed maturities, at market (amortized cost 2005, $2,803.2; 2004, $2,593.7)									$	2,939.0		$	2,633.9
Short-term investments										17.3			8.4
Short-term investments, securities lending collateral										289.6			343.4
Policy loans and other										85.1			81.2
Total Annuity and Life investments										3,331.0			3,066.9	8.6	%
Property & Casualty
Fixed maturities, at market (amortized cost 2005, $730.0; 2004, $684.8)										746.7			683.7
Short-term investments										9.1			5.5
Short-term investments, securities lending collateral										11.4			—
Other										0.6			0.6
Total Property & Casualty investments										767.8			689.8	11.3	%
Corporate investments										18.1			0.6
Total investments										4,116.9			3,757.3	9.6	%
Net investment income
Before tax	$	48.4		$	46.9		3.2	%	$	96.0		$	95.5	0.5	%
After tax		33.1			32.2		2.8	%		65.6			65.4	0.3	%
Realized investment gains (losses) by investment portfolio included in Corporate and Other segment income
Property & Casualty	$	2.1		$	(0.2	)			$	2.1		$	2.1
Annuity		3.2			0.1					7.9			2.2
Life		(1.0	)		(0.7	)				(1.0	)		0.2
Corporate and Other		—			—					—			—
Total, before tax		4.3			(0.8	)				9.0			4.5
Total, after tax		2.8			(0.5	)				5.9			2.9
Per share, diluted	$	0.07		$	(0.02	)			$	0.13		$	0.06
OTHER INFORMATION
End of period goodwill asset									$	47.4		$	47.4
End of period property and casualty net reserves (A):
June 30, 2005									$	314.8
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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