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: July 30, 2008

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 Quarterly Report on Form 10-Q for the period ended March 31, 2008 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 July 30, 2008, Horace Mann Educators Corporation issued a press release reporting its financial results for the three and six month periods ended June 30, 2008. 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

(d) Exhibits.

99.1	Glossary of Selected Terms
99.2	Press release dated July 30, 2008 reporting financial results for the three and six month periods ended June 30, 2008.

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: July 30, 2008

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 or the balance sheet 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 or Consolidated Balance Sheets, 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 and financial condition.

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.

• Licensed producers - Staff of Career Agents who are licensed to write insurance business.

• 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.

Book value per share excluding the fair value adjustment for investments – The result of dividing total shareholders’ equity excluding after tax net unrealized gains and losses on fixed maturities and equity securities, including the related effect on certain deferred policy acquisition costs and value of acquired insurance in force, by ending shares outstanding. Book value per share is the most directly comparable GAAP measure.

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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 Property Claims Service, a subsidiary of Insurance Services Office, Inc., and additionally beginning in 2007, includes losses from all such events that meet the definition of covered loss in the Company’s primary catastrophe excess of loss reinsurance contract, 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.

Net income before realized investment gains and losses - Net income adjusted to exclude after tax realized investment gains and losses. Net income is the most directly comparable GAAP measure. A projection of net income, including after tax realized investment gains and losses, is not accessible on a forward-looking basis because management believes that it is not possible to provide a reliable forecast of realized investment gains and losses, which can vary substantially from one period to another and may have a significant impact on net income.

Net Reserves - Property and casualty unpaid claim and claim expense reserves net of anticipated reinsurance recoverables.

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.

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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.

• Combined Ratio Excluding Catastrophes and Prior Years’ Reserve Development - The sum of the Loss Ratio and the Expense Ratio adjusted to remove the effect of catastrophe costs and prior years’ reserve development. The Combined Ratio is the most directly comparable GAAP measure.

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., July 30, 2008 — Horace Mann Educators Corporation (NYSE:HMN) today reported net income of $4.5 million (11 cents per share) and $18.8 million (45 cents per share) for the three and six months ended June 30, 2008, respectively, compared to net income of $23.1 million (52 cents per share) and $46.4 million ($1.04 per share) for the same periods in 2007. Included in net income were net realized losses on securities of $8.1 million ($5.1 million after tax, or 12 cents per share) and $10.5 million ($6.7 million after tax, or 16 cents per share) for the three and six months ended June 30, 2008, respectively. In the prior year, the second quarter earnings reflected net realized investment losses of $0.9 million ($0.6 million after tax, or 1 cent per share) and the six months reflected net realized investment gains of $2.6 million ($1.7 million after tax, or 4 cents per share). All per-share amounts are stated on a diluted basis.

“As previously announced, industry-wide catastrophe losses had an adverse impact on our second quarter net income of approximately 28 cents per share as compared to the same period last year. In addition, Horace Mann’s second quarter results also reflected the continued impact of a challenging financial market environment and the adverse effect of a slowing economy on both home and auto sales,” said Louis G. Lower II, President and Chief Executive Officer. “That said, our underlying fundamentals of profitability remain solid. For the current accident year and excluding catastrophes, our voluntary auto combined ratio increased somewhat but was within our expectations, and the increase in our property combined ratio on the same basis was driven primarily by non-catastrophe weather-related losses. Meanwhile, for the quarter and year to date — excluding the impact of the valuation of deferred policy acquisition costs — both annuity and life segment earnings exceeded prior year.”

“Due to the significant level of catastrophe costs experienced this quarter, along with the adverse financial market performance in the first six months of the year, we are decreasing our full year 2008 estimate of net income before realized investment gains and losses to between $1.30 and $1.45 per share,” Lower stated. “This projection

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reflects an average level of property and casualty catastrophe losses and relatively flat financial market performance in the second half of the year. The revised estimate also anticipates 5 cents per share of expenses related to the recent decision to consolidate the company’s property and casualty field claims offices.”

In the second quarter of 2008, the company completed its $25 million share repurchase authorization announced in April 2008. During the three months ended June 30, 2008, the company repurchased a total of 1,561,849 shares of its common stock at an aggregate cost of $24.8 million, or an average cost of $15.93 per share. Total shares outstanding on June 30, 2008 and 2007 were 39,061,788 and 43,275,184, respectively.

Segment Earnings

Net income for the property and casualty segment of $1.9 million for the quarter decreased $16.0 million compared to the same period in 2007, including the $11.3 million increase in after tax catastrophe costs. Pretax catastrophe costs in the current quarter were $22.4 million compared to $4.9 million incurred in the second quarter of 2007. The second quarter 2008 property and casualty combined ratio was 106.7 percent, including 16.6 percentage points due to catastrophe costs, compared to 89.1 percent, including 3.7 percentage points due to catastrophe costs, in the prior year period. Favorable prior years’ reserve development totaling $2.4 million was recorded in the current quarter, which represented 1.8 percentage points on the combined ratio, compared to $5.6 million, or 4.2 percentage points on the combined ratio, recorded in the second quarter of 2007.

Annuity segment net income of $5.1 million for the quarter was equal to the second quarter of 2007. Compared to the prior year and similar to the first three months of 2008, current period improvements in the interest margin were offset by the adverse impact of the financial markets on both the valuation of deferred policy acquisition costs and the level of contract charges earned. Life segment net income of $5.2 million for the current quarter increased $1.6 million compared to the same period a year earlier, reflecting growth in investment income and lower mortality costs.

Segment Revenues

The company’s total premiums written and contract deposits declined 2 percent compared to both the second quarter and first half of 2007, largely due to expected decreases in single premium annuity deposit receipts in 2008.

Property and casualty premiums written increased 2 percent compared to prior year, reflecting lower catastrophe reinsurance premiums and an increase in average property and auto premiums per policy.

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Annuity new contract deposits decreased 9 percent compared to the three and six months ended June 30, 2007. Scheduled, flexible-premium annuity deposit receipts decreased slightly compared to the prior year, while rollover deposits declined approximately 20 percent. Life segment insurance premiums and contract deposits were comparable to the prior year.

Sales and Distribution

Total new auto sales units were 5 percent and 8 percent lower in the three and six months ended June 30, 2008, respectively, than in the prior year periods. “Second quarter true new auto sales volume, while not where we wanted it to be, improved sequentially reflecting productivity gains in the current period,” said Lower. Annuity new business decreased 12 percent and 14 percent for the three and six months ended June 30, 2008, compared to the same periods a year earlier, primarily due to the expected decline in single premium rollover deposits. “IRS transition regulations for the 403(b) annuity marketplace have reduced new rollover deposits industry-wide,” said Lower. The company’s career agents produced a 4 percent increase in new flexible-premium annuity business, offset by a decline in this business from independent agents.

The number of career agents declined 12 percent to 721 agents at June 30, 2008 compared to 12 months earlier. “As anticipated, our decline in agent count primarily reflects the loss of lower-producing agents and a reduction in new agent hires as we transition our hiring standards to target only those individuals we believe will be successful in the new Agency Business Model,” Lower noted. Including 322 licensed producers who work for the agents, Horace Mann’s total points of distribution increased to 1,043, a growth of 3 percent over prior year.

“We continue to be very pleased with the progress we are making in transitioning to our new Agency Business Model. While it’s still early in the migration process, the approximately 200 agents who have completed Horace Mann’s agency business school have continued to outperform our other agents in all key productivity measures, with double-digit increases in true new auto units, new flexible annuity premiums and total first year earned commissions in the second quarter, compared to prior year,” said Lower. “Agency business school graduate productivity, continued increases in policyholder retention and a consistent growth trend in educator policies in force have helped offset the decline in agent count and the adverse competitive and economic environments, resulting in positive property and casualty written premium growth and only a slight decline in property and casualty policies in force.”

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Realized Investment Gains and Losses

In 2008, pretax net realized investment losses were $8.1 million for the second quarter, including $11.2 million of impairment write-downs and $0.3 million of realized impairment losses on securities that were disposed of during the quarter. The impairment write-downs were primarily related to two collateralized debt obligation securities and five equity securities, including four financial industry preferred stock issues. “While we realized additional investment losses this quarter, our conservative investment portfolio continues to serve us well in the current financial market environment,” said Lower.

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 period ended March 31, 2008 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 (Unaudited)

(Dollars in Millions, Except Per Share Data)

	Quarter Ended June 30,						% Change		Six Months Ended June 30,						% Change
	2008			2007					2008			2007
DIGEST OF EARNINGS
Net income	$	4.5		$	23.1		-80.5	%	$	18.8		$	46.4		-59.5	%
Net income per share:
Basic	$	0.11		$	0.54		-79.6	%	$	0.46		$	1.08		-57.4	%
Diluted (A)	$	0.11		$	0.52		-78.8	%	$	0.45		$	1.04		-56.7	%
Weighted average number of shares and equivalent shares (in millions) (B):
Basic		40.1			43.2		-7.2	%		40.6			43.2		-6.0	%
Diluted (A)		41.2			44.9		-8.2	%		41.7			45.1		-7.5	%
HIGHLIGHTS
Operations
Insurance premiums written and contract deposits	$	245.0		$	250.8		-2.3	%	$	469.6		$	481.1		-2.4	%
Return on equity (C)										8.5	%		15.0	%	N.M.
Property & Casualty GAAP combined ratio		106.7	%		89.1	%	N.M.			100.2	%		89.3	%	N.M.
Effect of catastrophe costs on the Property & Casualty combined ratio		16.6	%		3.7	%	N.M.			10.4	%		2.7	%	N.M.
Experienced agents										549			577		-4.9	%
Financed agents										172			244		-29.5	%
Total agents										721			821		-12.2	%
Licensed producers										322			187		72.2	%
Total points of distribution (D)										1,043			1,008		3.5	%
Additional Per Share Information
Dividends paid	$	0.105		$	0.105		0.0	%	$	0.21		$	0.21		0.0	%
Book value (E)									$	15.13		$	15.08		0.3	%
Financial Position
Total assets									$	6,053.0		$	6,476.5		-6.5	%
Short-term debt										—			—		0.0	%
Long-term debt										199.5			199.5		0.0	%
Total shareholders’ equity										591.1			652.5		-9.4	%

N.M. - Not meaningful.

(A) Effective December 31, 2004, the Company adopted EITF Consensus 04-8, “The Effect of Contingently Convertible Instruments on Diluted Earnings per Share”. Diluted per share information for all periods is presented on a basis consistent with this consensus. On May 14, 2007, the Company redeemed all remaining Senior Convertible Notes. For the three and six months ended June 30, 2007, the Senior Convertible Notes represented 0.6 million and 0.9 million equivalent shares and had after tax interest expense of $0.1 million and $0.3 million, respectively.

(B) In November and December 2007, the Company repurchased 1,111,600 shares of its common stock at an aggregate cost of $20.7 million, or an average cost of $18.66 per share. During the three months ended March 31, 2008, the Company repurchased 1,636,376 shares of its common stock at an aggregate cost of $29.5 million, or an average cost of $18.01 per share. During the three months ended June 30, 2008, the Company repurchased 1,561,849 shares of its common stock at an aggregate cost of $24.8 million, or an average cost of $15.93 per share.

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

(D) Includes licensed producers working in exclusive agents’ offices and excludes independent agents.

(E) Book value per share excluding the fair value adjustment for investments was $16.71 at June 30, 2008 and $15.88 at June 30, 2007. Ending shares outstanding were 39,061,788 at June 30, 2008 and 43,275,184 at June 30, 2007.

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HORACE MANN EDUCATORS CORPORATION

Statements of Operations and Supplemental GAAP Consolidated Data (Unaudited)

(Dollars in Millions)

	Quarter Ended June 30,								Six Months Ended June 30,
	2008			2007			% Change		2008			2007			% Change
STATEMENTS OF OPERATIONS
Insurance premiums and contract charges earned	$	163.8		$	163.5		0.2	%	$	326.3		$	324.7		0.5	%
Net investment income		57.8			55.4		4.3	%		114.4			110.3		3.7	%
Net realized investment gains (losses)		(8.1	)		(0.9	)	N.M.			(10.5	)		2.6		N.M.
Other income		2.7			3.5		-22.9	%		5.3			6.1		-13.1	%
Total revenues		216.2			221.5		-2.4	%		435.5			443.7		-1.8	%
Benefits, claims and settlement expenses		122.1			100.0		22.1	%		229.0			198.4		15.4	%
Interest credited		32.6			31.6		3.2	%		64.7			62.8		3.0	%
Policy acquisition expenses amortized		18.8			18.2		3.3	%		39.8			37.3		6.7	%
Operating expenses		33.3			34.2		-2.6	%		68.1			69.3		-1.7	%
Amortization of intangible assets		1.6			1.3		23.1	%		2.8			2.8		0.0	%
Interest expense		3.4			3.5		-2.9	%		6.8			7.2		-5.6	%
Total benefits, losses and expenses		211.8			188.8		12.2	%		411.2			377.8		8.8	%
Income before income taxes		4.4			32.7		-86.5	%		24.3			65.9		-63.1	%
Income tax expense (benefit)		(0.1	)		9.6		N.M.			5.5			19.5		-71.8	%
Net income	$	4.5		$	23.1		-80.5	%	$	18.8		$	46.4		-59.5	%
ANALYSIS OF PREMIUMS WRITTEN
AND CONTRACT DEPOSITS
Property & Casualty
Automobile and property (voluntary)	$	137.7		$	134.9		2.1	%	$	264.3		$	259.4		1.9	%
Involuntary and other property & casualty		0.8			0.9		-11.1	%		1.0			1.7		-41.2	%
Total Property & Casualty		138.5			135.8		2.0	%		265.3			261.1		1.6	%
Annuity deposits		80.8			89.0		-9.2	%		154.7			170.5		-9.3	%
Life		25.7			26.0		-1.2	%		49.6			49.5		0.2	%
Total	$	245.0		$	250.8		-2.3	%	$	469.6		$	481.1		-2.4	%
ANALYSIS OF SEGMENT NET INCOME (LOSS)
Property & Casualty	$	1.9		$	17.9		-89.4	%	$	14.9		$	34.7		-57.1	%
Annuity		5.1			5.1		0.0	%		8.1			8.5		-4.7	%
Life		5.2			3.6		44.4	%		7.8			7.2		8.3	%
Corporate and other (A)		(7.7	)		(3.5	)	120.0	%		(12.0	)		(4.0	)	200.0	%
Net income		4.5			23.1		-80.5	%		18.8			46.4		-59.5	%
Catastrophe costs, after tax, included above (B)		(14.5	)		(3.2	)	353.1	%		(18.0	)		(4.8	)	275.0	%

N.M. - Not meaningful.

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

(B) Includes allocated loss adjustment expenses and catastrophe reinsurance reinstatement premiums. See also page 3.

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HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview (Unaudited)

(Dollars in Millions)

	Quarter Ended June 30,								Six Months Ended June 30,
	2008			2007			% Change		2008			2007			% Change
PROPERTY & CASUALTY
Premiums written	$	138.5		$	135.8		2.0	%	$	265.3		$	261.1		1.6	%
Premiums earned		134.5			133.6		0.7	%		267.5			265.8		0.6	%
Net investment income		9.1			9.3		-2.2	%		18.3			18.5		-1.1	%
Other income		0.5			1.2		-58.3	%		1.1			1.7		-35.3	%
Losses and loss adjustment expenses (LAE)		111.0			86.9		27.7	%		202.7			172.9		17.2	%
Operating expenses (includes policy acquisition expenses amortized)		32.5			32.2		0.9	%		65.2			64.6		0.9	%
Income before tax		0.6			25.0		-97.6	%		19.0			48.5		-60.8	%
Net income		1.9			17.9		-89.4	%		14.9			34.7		-57.1	%
Net investment income, after tax		7.6			7.6		0.0	%		15.3			15.2		0.7	%
Catastrophe costs, after tax (A)		14.5			3.2		353.1	%		18.0			4.8		275.0	%
Catastrophe losses and LAE, before tax		22.4			4.9		357.1	%		27.8			7.4		275.7	%
Reinsurance reinstatement premiums, before tax		—			—		0.0	%		—			—		0.0	%
Operating statistics:
Loss and loss adjustment expense ratio		82.5	%		65.0	%	N.M.			75.8	%		65.0	%	N.M.
Expense ratio		24.2	%		24.1	%	N.M.			24.4	%		24.3	%	N.M.
Combined ratio		106.7	%		89.1	%	N.M.			100.2	%		89.3	%	N.M.
Effect of catastrophe costs on the combined ratio		16.6	%		3.7	%	N.M.			10.4	%		2.7	%	N.M.
Automobile and property detail:
Premiums written (voluntary) (B)	$	137.7		$	134.9		2.1	%	$	264.3		$	259.4		1.9	%
Automobile		90.3			89.9		0.4	%		182.1			181.5		0.3	%
Property		47.4			45.0		5.3	%		82.2			77.9		5.5	%
Premiums earned (voluntary) (B)		134.1			131.0		2.4	%		267.4			260.7		2.6	%
Automobile		91.1			91.0		0.1	%		182.0			182.1		-0.1	%
Property		43.0			40.0		7.5	%		85.4			78.6		8.7	%
Policies in force (voluntary) (in thousands)										799			801		-0.2	%
Automobile										535			536		-0.2	%
Property										264			265		-0.4	%
Policy renewal rate (voluntary)
Automobile (6 months)										91.3	%		91.0	%	N.M.
Property (12 months)										88.8	%		87.8	%	N.M.
Voluntary automobile operating statistics:
Loss and loss adjustment expense ratio		71.7	%		69.9	%	N.M.			71.4	%		69.3	%	N.M.
Expense ratio		24.3	%		24.0	%	N.M.			24.3	%		24.4	%	N.M.
Combined ratio		96.0	%		93.9	%	N.M.			95.7	%		93.7	%	N.M.
Effect of catastrophe costs on the combined ratio		2.5	%		0.7	%	N.M.			1.4	%		0.4	%	N.M.
Total property operating statistics:
Loss and loss adjustment expense ratio		106.2	%		51.0	%	N.M.			86.2	%		52.2	%	N.M.
Expense ratio		23.9	%		25.1	%	N.M.			24.4	%		25.0	%	N.M.
Combined ratio		130.1	%		76.1	%	N.M.			110.6	%		77.2	%	N.M.
Effect of catastrophe costs on the combined ratio		47.5	%		11.0	%	N.M.			29.8	%		8.6	%	N.M.
Prior years’ reserves favorable (adverse) development, pretax
Voluntary automobile	$	2.2		$	1.4		57.1	%	$	3.5		$	4.4		-20.5	%
Total property		0.2			4.2		-95.2	%		0.6			6.7		-91.0	%
Other property and casualty		—			—		N.M.			1.0			—		N.M.
Total		2.4			5.6		-57.1	%		5.1			11.1		-54.1	%

N.M. - Not meaningful.

(A) Includes allocated loss adjustment expenses and catastrophe reinsurance reinstatement premiums.

(B) Amounts are net of additional ceded premiums to reinstate the Company's property and casualty catastrophe reinsurance coverage, if any, as quantified above.

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HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview (Unaudited)

(Dollars in Millions)

	Quarter Ended June 30,								Six Months Ended June 30,
	2008			2007			% Change		2008			2007			% Change
ANNUITY
Contract deposits	$	80.8		$	89.0		-9.2	%	$	154.7		$	170.5		-9.3	%
Variable		35.3			38.9		-9.3	%		70.9			75.4		-6.0	%
Fixed		45.5			50.1		-9.2	%		83.8			95.1		-11.9	%
Contract charges earned		4.9			5.5		-10.9	%		9.6			10.9		-11.9	%
Net investment income		34.0			32.0		6.2	%		67.1			63.5		5.7	%
Net interest margin (without realized investment gains and losses)		10.9			9.7		12.4	%		21.4			19.2		11.5	%
Other income		1.4			1.3		7.7	%		2.7			2.5		8.0	%
Mortality loss and other reserve changes		0.4			(0.3	)	N.M.			(0.1	)		(0.6	)	-83.3	%
Operating expenses (includes policy acquisition expenses amortized)		8.7			8.0		8.7	%		20.2			17.7		14.1	%
Amortization of intangible assets		1.3			0.9		44.4	%		2.2			2.1		4.8	%
Income before tax		7.6			7.3		4.1	%		11.2			12.2		-8.2	%
Net income		5.1			5.1		0.0	%		8.1			8.5		-4.7	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	0.2		$	0.5		-60.0	%	$	(2.1	)	$	—		N.M.
Value of acquired insurance in force		(0.3	)		0.1		N.M.			(0.2	)		(0.1	)	100.0	%
Guaranteed minimum death benefit reserve		—			(0.2	)	-100.0	%		(0.1	)		(0.1	)	0.0	%
Annuity contracts in force (in thousands)										168			165		1.8	%
Accumulated value on deposit									$	3,600.6		$	3,723.7		-3.3	%
Variable										1,382.7			1,602.8		-13.7	%
Fixed										2,217.9			2,120.9		4.6	%
Annuity accumulated value retention - 12 months
Variable accumulations										91.8	%		91.2	%	N.M.
Fixed accumulations										92.4	%		92.4	%	N.M.
LIFE
Premiums and contract deposits	$	25.7		$	26.0		-1.2	%	$	49.6		$	49.5		0.2	%
Premiums and contract charges earned		24.4			24.4		0.0	%		49.2			48.0		2.5	%
Net investment income		14.9			14.2		4.9	%		29.5			28.1		5.0	%
Income before tax		7.9			5.7		38.6	%		12.3			11.2		9.8	%
Net income		5.2			3.6		44.4	%		7.8			7.2		8.3	%
Pretax income increase (decrease) due to
valuation of:
Deferred policy acquisition costs	$	(0.1	)	$	0.1		N.M.		$	(0.1	)	$	0.1		N.M.
Life policies in force (in thousands)										225			230		-2.2	%
Life insurance in force									$	13,647		$	13,470		1.3	%
Lapse ratio - 12 months
(Ordinary life insurance)										5.6	%		5.9	%	N.M.
CORPORATE AND OTHER (A)
Components of loss before tax:
Net realized investment gains (losses)	$	(8.1	)	$	(0.9	)	N.M.		$	(10.5	)	$	2.6		N.M.
Interest expense		(3.4	)		(3.5	)	-2.9	%		(6.8	)		(7.2	)	-5.6	%
Other operating expenses, net investment income and other income		(0.2	)		(0.9	)	-77.8	%		(0.9	)		(1.4	)	-35.7	%
Loss before tax		(11.7	)		(5.3	)	120.8	%		(18.2	)		(6.0	)	203.3	%
Net loss		(7.7	)		(3.5	)	120.0	%		(12.0	)		(4.0	)	200.0	%

N.M. - Not meaningful.

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

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HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview (Unaudited)

(Dollars in Millions)

	Quarter Ended June 30,								Six Months Ended June 30,
	2008			2007			% Change		2008			2007			% Change
INVESTMENTS
Annuity and Life
Fixed maturities, at fair value (amortized cost 2008, $3,223.7; 2007, $3,125.9)									$	3,137.5		$	3,075.2		2.0	%
Equity securities, at fair value (cost 2008, $52.9; 2007, $13.5)										47.7			13.5		253.3	%
Short-term investments										52.4			47.1		11.3	%
Short-term investments, securities lending collateral										63.1			350.1		-82.0	%
Policy loans and other										104.3			98.7		5.7	%
Total Annuity and Life investments										3,405.0			3,584.6		-5.0	%
Property & Casualty
Fixed maturities, at fair value (amortized cost 2008, $682.9; 2007, $753.5)										671.3			745.4		-9.9	%
Equity securities, at fair value (cost 2008, $39.9; 2007, $8.5)										37.0			8.7		325.3	%
Short-term investments										26.1			20.8		25.5	%
Short-term investments, securities lending collateral										—			—		0.0	%
Total Property & Casualty investments										734.4			774.9		-5.2	%
Corporate investments										4.1			4.3		-4.7	%
Total investments										4,143.5			4,363.8		-5.0	%
Net investment income
Before tax	$	57.8		$	55.4		4.3	%	$	114.4		$	110.3		3.7	%
After tax		39.3			37.6		4.5	%		77.8			74.9		3.9	%
Net realized investment gains (losses) by investment portfolio included in Corporate and Other segment gain (loss)
Property & Casualty	$	(1.5	)	$	0.1		N.M.		$	(1.7	)	$	0.4		N.M.
Annuity		(7.7	)		0.2		N.M.			(11.1	)		3.4		N.M.
Life		1.1			(1.2	)	N.M.			2.3			(1.2	)	N.M.
Corporate and Other		—			—		0.0	%		—			—		0.0	%
Total, before tax		(8.1	)		(0.9	)	N.M.			(10.5	)		2.6		N.M.
Total, after tax		(5.1	)		(0.6	)	N.M.			(6.7	)		1.7		N.M.
Per share, diluted	$	(0.12	)	$	(0.01	)	N.M.		$	(0.16	)	$	0.04		N.M.

N.M. - Not meaningful.

- 5 -