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: October 29, 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 June 30, 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 October 29, 2008, Horace Mann Educators Corporation issued a press release reporting its financial results for the three and nine month periods ended September 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 October 29, 2008 reporting financial results for the three and nine month periods ended September 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: October 29, 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 THIRD QUARTER

SPRINGFIELD, Ill., October 29, 2008 — Horace Mann Educators Corporation (NYSE:HMN) today reported net losses of $30.8 million (79 cents per share) and $12.0 million (30 cents per share) for the three and nine months ended September 30, 2008, respectively, compared to net income of $18.4 million (41 cents per share) and $64.8 million ($1.45 per share) for the same periods in 2007. Included in these amounts were net realized losses on securities of $45.2 million ($37.5 million after tax, or 96 cents per share) and $55.7 million ($44.2 million after tax, or $1.10 per share) for the three and nine months ended September 30, 2008, respectively. In 2007, the third quarter earnings reflected net realized investment losses of $0.5 million ($0.3 million after tax, or 1 cent per share) and the nine months reflected net realized investment gains of $2.1 million ($1.4 million after tax, or 3 cents per share). All per-share amounts are stated on a diluted basis.

“As previously announced, the continuing challenges of the financial markets had an adverse impact on Horace Mann’s third quarter results, as the company recorded losses and impairment write-downs of $45 million pretax, primarily related to our holdings of Lehman Brothers, Fannie Mae, Freddie Mac and AIG. In addition, and also consistent with previous disclosures, industry-wide catastrophe losses reduced current quarter earnings by approximately 60 cents per share, due in large part to the effect of Hurricanes Gustav and Ike, as compared to an adverse impact of approximately 15 cents per share for the third quarter of 2007,” said Louis G. Lower II, President and Chief Executive Officer. “In spite of the significant level of catastrophe losses, net income before realized investment gains and losses was 17 cents per share in the quarter and our underlying profit fundamentals remain solid. For the current accident year and excluding catastrophes, our property and casualty combined ratio improved sequentially in the third quarter and was below prior year for both the quarter and year to date. In addition, excluding the impact of the valuation of deferred policy acquisition costs and change in the guaranteed minimum death benefit reserve, year-to-date combined annuity and life segment earnings were comparable to a very strong prior year result. Meanwhile, compared to last year’s third quarter,

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average productivity of the approximately 200 agents who have completed our Agency Business School training increased over 10 percent in our lead auto and annuity lines in spite of the difficult competitive and economic environment.”

“As previously indicated, our estimate of full-year 2008 net income before realized investment gains and losses is between $1.10 and $1.25 per share,” Lower said. “This projection assumes an average amount of property and casualty catastrophe losses in the fourth quarter and a relatively flat performance in the financial markets from September 30 levels.”

Segment Earnings

The property and casualty segment recorded a net loss of $1.3 million for the quarter, resulting in a decrease of $11.7 million compared to the segment’s net income for the same period in 2007, including a $16.9 million increase in after tax catastrophe costs. Pretax catastrophe costs in the current quarter were $36.2 million compared to $10.3 million incurred in the third quarter of 2007. Hurricane Gustav, at approximately $13 million pretax, and Hurricane Ike, at approximately $12 million pretax, represented the most significant third quarter catastrophe events for the company, with approximately $5 million pretax of adverse reserve development for catastrophe activity in the second quarter of 2008 also recorded in the current period. The third quarter 2008 property and casualty combined ratio was 109.7 percent, including 26.9 percentage points due to catastrophe costs, compared to 96.7 percent, including 7.7 percentage points due to catastrophe costs, in the prior year period. Favorable prior years’ reserve development totaling $6.3 million was recorded in the current quarter, which represented 4.7 percentage points on the combined ratio, compared to $3.7 million, or 2.8 percentage points on the combined ratio, recorded in the third quarter of 2007.

Annuity segment net income of $6.3 million for the quarter increased $1.1 million compared to the third quarter of 2007. Compared to the prior year and similar to the first six months of 2008, current period improvements in the interest margin were offset by the adverse impact of the financial markets on the level of contract charges earned. For the third quarter of 2008, the valuation of annuity deferred policy acquisition costs had a net positive impact on earnings, with the favorable impact related to the investment losses recognized in the quarter more than offsetting the adverse impact of the financial markets on variable deposit fund performance. “Third quarter annuity net fund flows were positive and have increased sequentially over the last two quarters, while cash value persistency of 93 percent has increased steadily throughout the year,” noted Lower.

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Life segment net income of $4.4 million for the current quarter decreased $1.1 million compared to the same period a year earlier, as growth in earned premium and investment income was more than offset by higher mortality costs. Life persistency remained in excess of 94 percent.

Segment Revenues

The company’s total premiums written and contract deposits declined 1 percent and 2 percent compared to the third quarter and first nine months of 2007, respectively, largely due to expected decreases in single premium annuity deposit receipts in 2008.

Property and casualty premiums written increased 1 percent compared to prior year, reflecting lower catastrophe reinsurance premiums and an increase in average property and auto premiums per policy.

Annuity new contract deposits decreased 5 percent and 8 percent compared to the three and nine months ended September 30, 2007, respectively. Scheduled, flexible-premium annuity deposit receipts decreased moderately compared to the prior year, while rollover deposits declined 4 percent and 16 percent compared to the third quarter and first nine months of 2007, respectively. Life segment insurance premiums and contract deposits were comparable to the prior year.

Sales and Distribution

For the three and nine months ended September 30, 2008, total new auto sales units were 2 percent and 6 percent lower in the current periods than in the prior year, respectively. “Third quarter true new auto sales volume improved sequentially, reflecting continued productivity gains in the current period,” said Lower. Similarly, Horace Mann agent flexible premium annuity sales were up 9 percent in the quarter and 6 percent year to date versus prior year, offset by lower independent agent sales and an expected decline in single premium rollover deposits. “IRS transition regulations for the 403(b) annuity marketplace continue to reduce new rollover deposits industry-wide,” said Lower.

The number of career agents declined 13 percent to 690 agents at September 30, 2008 compared to 12 months earlier. “As expected, our decline in agent count primarily reflects the loss of lower-producing agents and a reduction in new agent hires as we continue to transition our hiring standards to target only those individuals we believe will be successful in the new Agency Business Model,” Lower said. Including 360 licensed producers who work for the agents, Horace Mann’s total points of distribution increased to 1,050, a growth of 2 percent over prior year. “In spite of the decline in agent count, a difficult competitive and economic environment, and our continuing actions to reduce risk exposure in hurricane-prone areas, we have recorded positive property and casualty written premium growth and

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only a slight decline in property and casualty policies in force this year. Growth in Agency Business School graduate productivity, policyholder retention, and educator policies in force — the primary focal points of our strategic initiatives — have contributed significantly to these results.”

Investment Gains and Losses

In 2008, pretax net realized investment losses were $45.2 million for the third quarter, including $33.4 million of impairment write-downs and $14.2 million of realized impairment losses on securities that were disposed of during the quarter. Of the investment losses, $29 million ($24 million of write-downs and $5 million on disposals) were on fixed maturity and preferred stock securities of Lehman Brothers Holdings, Inc., the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), and American International Group, Inc. The remaining $9 million of impairment write-downs included $2 million related to securities that the Company no longer intends to hold until the value fully recovers. An $11.5 million deferred tax allowance was established at September 30, 2008, based on an assessment that gross realized and unrealized investment gains were insufficient to offset gross unrealized investment losses. Approximately $8.2 million of the allowance related to losses realized during the quarter on Lehman Brothers, Fannie Mae and Freddie Mac, which are considered to be permanently impaired, and was recorded as a reduction to the company’s tax benefit on realized investment losses.

“While the investment losses we realized in the quarter were not insignificant, they are very manageable in terms of our ability to maintain acceptable insurance subsidiary capital and operating ratios, particularly in light of the flexibility afforded us by our existing bank credit facility,” said Lower. As previously disclosed, on October 2, 2008 the company drew down $75 million of its $125 million bank credit facility, which currently remains at the holding company level.

Net unrealized investment losses on fixed maturity and equity securities increased from $4.8 million at December 31, 2007, to $105.9 million at June 30, 2008, and totaled $271.1 million at September 30, 2008. This dramatic and relatively recent increase in the unrealized position reflects the extreme and unprecedented widening of corporate bond spreads. “Our considered judgment is that our unrealized balance almost exclusively reflects a remarkably disruptive credit market in a crisis mode where liquidity has been severely impaired, with spreads and prices disconnected from rational valuation across all asset classes,” said Lower. “Given our insignificant exposure to sub-prime, Alt-A and other lower-quality securities, coupled with the credit enhancement of the government’s TARP program being available to many of our financial institution holdings, we remain comfortable with the underlying credit quality of our portfolio.”

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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 period ended June 30, 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 September 30,								Nine Months Ended September 30,
	2008			2007			% Change		2008			2007			% Change
DIGEST OF EARNINGS
Net income (loss)	$	(30.8	)	$	18.4		N.M.		$	(12.0	)	$	64.8		N.M.
Net income (loss) per share:
Basic	$	(0.79	)	$	0.42		N.M.		$	(0.30	)	$	1.50		N.M.
Diluted (A)	$	(0.79	)	$	0.41		N.M.		$	(0.30	)	$	1.45		N.M.
Weighted average number of shares and equivalent shares (in millions) (B):
Basic		39.1			43.3		-9.7	%		40.1			43.2		-7.2	%
Diluted (A)		39.1			44.3		-11.7	%		40.1			44.8		-10.5	%
HIGHLIGHTS
Operations
Insurance premiums written and contract deposits	$	251.4		$	254.4		-1.2	%	$	721.0		$	735.5		-2.0	%
Return on equity (C)										1.0	%		14.2	%	N.M.
Property & Casualty GAAP combined ratio		109.7	%		96.7	%	N.M.			103.3	%		91.8	%	N.M.
Effect of catastrophe costs on the Property & Casualty combined ratio		26.9	%		7.7	%	N.M.			15.9	%		4.4	%	N.M.
Experienced agents										529			576		-8.2	%
Financed agents										161			221		-27.1	%
Total agents										690			797		-13.4	%
Licensed producers										360			228		57.9	%
Total points of distribution (D)										1,050			1,025		2.4	%
Additional Per Share Information
Dividends paid	$	0.105		$	0.105		—		$	0.315		$	0.315		—
Book value (E)									$	11.82		$	15.73		-24.9	%
Financial Position
Total assets									$	5,798.4		$	6,295.3		-7.9	%
Short-term debt										—			—		—
Long-term debt										199.5			199.5		—
Total shareholders’ equity										461.8			680.9		-32.2	%

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 nine months ended September 30, 2007, the Senior Convertible Notes represented 0.6 million equivalent shares and had after tax interest expense of $0.3 million.

(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 (loss) 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 $15.82 at September 30, 2008 and $16.21 at September 30, 2007. Ending shares outstanding were 39,061,788 at September 30, 2008 and 43,294,959 at September 30, 2007.

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HORACE MANN EDUCATORS CORPORATION

Statements of Operations and Supplemental GAAP Consolidated Data (Unaudited)

(Dollars in Millions)

	Quarter Ended September 30,								Nine Months Ended September 30,
	2008			2007			% Change		2008			2007			% Change
STATEMENTS OF OPERATIONS
Insurance premiums and contract charges earned	$	163.4		$	163.3		0.1	%	$	489.7		$	488.0		0.3	%
Net investment income		57.8			56.0		3.2	%		172.2			166.3		3.5	%
Net realized investment gains (losses)		(45.2	)		(0.5	)	N.M.			(55.7	)		2.1		N.M.
Other income		2.2			2.9		-24.1	%		7.5			9.0		-16.7	%
Total revenues		178.2			221.7		-19.6	%		613.7			665.4		-7.8	%
Benefits, claims and settlement expenses		131.2			108.6		20.8	%		360.2			307.0		17.3	%
Interest credited		33.2			32.2		3.1	%		97.9			95.0		3.1	%
Policy acquisition expenses amortized		16.2			18.4		-12.0	%		56.0			55.7		0.5	%
Operating expenses		30.6			31.9		-4.1	%		98.7			101.2		-2.5	%
Amortization of intangible assets		1.3			1.2		8.3	%		4.1			4.0		2.5	%
Interest expense		3.4			3.4		—			10.2			10.6		-3.8	%
Total benefits, losses and expenses		215.9			195.7		10.3	%		627.1			573.5		9.3	%
Income (loss) before income taxes		(37.7	)		26.0		N.M.			(13.4	)		91.9		N.M.
Income tax expense (benefit)		(6.9	)		7.6		N.M.			(1.4	)		27.1		N.M.
Net income (loss)	$	(30.8	)	$	18.4		N.M.		$	(12.0	)	$	64.8		N.M.
ANALYSIS OF PREMIUMS WRITTEN     AND CONTRACT DEPOSITS
Property & Casualty
Automobile and property (voluntary)	$	143.1		$	141.7		1.0	%	$	407.4		$	401.1		1.6	%
Involuntary and other property & casualty		0.4			0.3		33.3	%		1.4			2.0		-30.0	%
Total Property & Casualty		143.5			142.0		1.1	%		408.8			403.1		1.4	%
Annuity deposits		83.1			87.8		-5.4	%		237.8			258.3		-7.9	%
Life		24.8			24.6		0.8	%		74.4			74.1		0.4	%
Total	$	251.4		$	254.4		-1.2	%	$	721.0		$	735.5		-2.0	%
ANALYSIS OF SEGMENT NET INCOME (LOSS)
Property & Casualty	$	(1.3	)	$	10.4		N.M.		$	13.6		$	45.1		-69.8	%
Annuity		6.3			5.2		21.2	%		14.4			13.7		5.1	%
Life		4.4			5.5		-20.0	%		12.2			12.7		-3.9	%
Corporate and other (A)		(40.2	)		(2.7	)	N.M.			(52.2	)		(6.7	)	N.M.
Net income (loss)		(30.8	)		18.4		N.M.			(12.0	)		64.8		N.M.
Catastrophe costs, after tax, included above (B)		(23.6	)		(6.7	)	252.2	%		(41.6	)		(11.5	)	261.7	%

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 September 30,								Nine Months Ended September 30,
	2008			2007			% Change		2008			2007			% Change
PROPERTY & CASUALTY
Premiums written	$	143.5		$	142.0		1.1	%	$	408.8		$	403.1		1.4	%
Premiums earned		134.5			133.4		0.8	%		402.0			399.2		0.7	%
Net investment income		8.7			9.3		-6.5	%		27.0			27.8		-2.9	%
Other income		—			0.3		-100.0	%		1.1			2.0		-45.0	%
Losses and loss adjustment expenses (LAE)		117.5			97.4		20.6	%		320.2			270.3		18.5	%
Operating expenses (includes policy acquisition expenses amortized)		30.1			31.5		-4.4	%		95.3			96.1		-0.8	%
Income (loss) before tax		(4.4	)		14.1		N.M.			14.6			62.6		-76.7	%
Net income (loss)		(1.3	)		10.4		N.M.			13.6			45.1		-69.8	%
Net investment income, after tax		7.3			7.8		-6.4	%		22.6			23.0		-1.7	%
Catastrophe costs, after tax (A)		23.6			6.7		252.2	%		41.6			11.5		261.7	%
Catastrophe losses and LAE, before tax		36.2			10.3		251.5	%		64.0			17.7		261.6	%
Reinsurance reinstatement premiums, before tax		—			—		—			—			—		—
Operating statistics:
Loss and loss adjustment expense ratio		87.3	%		73.0	%	N.M.			79.6	%		67.7	%	N.M.
Expense ratio		22.4	%		23.7	%	N.M.			23.7	%		24.1	%	N.M.
Combined ratio		109.7	%		96.7	%	N.M.			103.3	%		91.8	%	N.M.
Effect of catastrophe costs on the combined ratio		26.9	%		7.7	%	N.M.			15.9	%		4.4	%	N.M.
Automobile and property detail:
Premiums written (voluntary) (B)	$	143.1		$	141.7		1.0	%	$	407.4		$	401.1		1.6	%
Automobile		93.1			93.1		—			275.2			274.6		0.2	%
Property		50.0			48.6		2.9	%		132.2			126.5		4.5	%
Premiums earned (voluntary) (B)		134.3			131.9		1.8	%		401.7			392.6		2.3	%
Automobile		91.6			91.2		0.4	%		273.6			273.3		0.1	%
Property		42.7			40.7		4.9	%		128.1			119.3		7.4	%
Policies in force (voluntary) (in thousands)										798			801		-0.4	%
Automobile										535			535		—
Property										263			266		-1.1	%
Policy renewal rate (voluntary)
Automobile (6 months)										91.5	%		91.4	%	N.M.
Property (12 months)										88.7	%		88.2	%	N.M.
Voluntary automobile operating statistics:
Loss and loss adjustment expense ratio		62.1	%		69.9	%	N.M.			68.3	%		69.5	%	N.M.
Expense ratio		22.1	%		23.8	%	N.M.			23.5	%		24.2	%	N.M.
Combined ratio		84.2	%		93.7	%	N.M.			91.8	%		93.7	%	N.M.
Effect of catastrophe costs on the combined ratio		2.0	%		0.7	%	N.M.			1.6	%		0.5	%	N.M.
Total property operating statistics:
Loss and loss adjustment expense ratio		143.8	%		78.9	%	N.M.			105.4	%		61.2	%	N.M.
Expense ratio		23.2	%		23.9	%	N.M.			24.0	%		24.6	%	N.M.
Combined ratio		167.0	%		102.8	%	N.M.			129.4	%		85.8	%	N.M.
Effect of catastrophe costs on the combined ratio		82.1	%		24.2	%	N.M.			47.3	%		13.8	%	N.M.
Prior years’ reserves favorable (adverse) development, pretax
Voluntary automobile	$	6.2		$	2.8		121.4	%	$	9.7		$	7.2		34.7	%
Total property		(0.5	)		0.9		N.M.			0.1			7.6		-98.7	%
Other property and casualty		0.6			—		N.M.			1.6			—		N.M.
Total		6.3			3.7		70.3	%		11.4			14.8		-23.0	%

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 September 30,								Nine Months Ended September 30,
	2008			2007			% Change		2008			2007			% Change
ANNUITY
Contract deposits	$	83.1		$	87.8		-5.4	%	$	237.8		$	258.3		-7.9	%
Variable		31.7			35.8		-11.5	%		102.6			111.2		-7.7	%
Fixed		51.4			52.0		-1.2	%		135.2			147.1		-8.1	%
Contract charges earned		4.2			5.5		-23.6	%		13.8			16.4		-15.9	%
Net investment income		34.4			32.6		5.5	%		101.5			96.1		5.6	%
Net interest margin (without realized investment gains and losses)		10.8			9.7		11.3	%		32.2			28.9		11.4	%
Other income		1.4			1.7		-17.6	%		4.1			4.2		-2.4	%
Mortality loss and other reserve changes		(0.3	)		(0.3	)	—			(0.4	)		(0.9	)	-55.6	%
Operating expenses (includes policy acquisition expenses amortized)		6.0			7.9		-24.1	%		26.2			25.6		2.3	%
Amortization of intangible assets		0.9			0.9		—			3.1			3.0		3.3	%
Income before tax		9.2			7.8		17.9	%		20.4			20.0		2.0	%
Net income		6.3			5.2		21.2	%		14.4			13.7		5.1	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	2.2		$	0.2		N.M.		$	0.1		$	0.2		N.M.
Value of acquired insurance in force		0.2			—		N.M.			—			(0.1	)	-100.0	%
Guaranteed minimum death benefit reserve		(0.2	)		—		N.M.			(0.3	)		(0.1	)	200.0	%
Annuity contracts in force (in thousands)										168			164		2.4	%
Accumulated value on deposit									$	3,539.0		$	3,750.7		-5.6	%
Variable										1,266.1			1,610.3		-21.4	%
Fixed										2,272.9			2,140.4		6.2	%
Annuity accumulated value retention - 12 months
Variable accumulations										92.7	%		90.8	%	N.M.
Fixed accumulations										93.3	%		91.9	%	N.M.
LIFE
Premiums and contract deposits	$	24.8		$	24.6		0.8	%	$	74.4		$	74.1		0.4	%
Premiums and contract charges earned		24.7			24.4		1.2	%		73.9			72.4		2.1	%
Net investment income		15.0			14.3		4.9	%		44.5			42.4		5.0	%
Income before tax		6.9			8.4		-17.9	%		19.2			19.6		-2.0	%
Net income		4.4			5.5		-20.0	%		12.2			12.7		-3.9	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	0.2		$	(0.1	)	N.M.		$	0.1		$	—		N.M.
Life policies in force (in thousands)										222			227		-2.2	%
Life insurance in force									$	13,619		$	13,499		0.9	%
Lapse ratio - 12 months
(Ordinary life insurance)										5.5	%		5.6	%	N.M.
CORPORATE AND OTHER (A)
Components of loss before tax:
Net realized investment gains (losses)	$	(45.2	)	$	(0.5	)	N.M.		$	(55.7	)	$	2.1		N.M.
Interest expense		(3.4	)		(3.4	)	—			(10.2	)		(10.6	)	-3.8	%
Other operating expenses, net investment income and other income		(0.8	)		(0.4	)	100.0	%		(1.7	)		(1.8	)	-5.6	%
Loss before tax		(49.4	)		(4.3	)	N.M.			(67.6	)		(10.3	)	N.M.
Net loss		(40.2	)		(2.7	)	N.M.			(52.2	)		(6.7	)	N.M.

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 September 30,								Nine Months Ended September 30,
	2008			2007			% Change		2008			2007			% Change
INVESTMENTS
Annuity and Life
Fixed maturities, at fair value (amortized cost 2008, $3,170.2; 2007, $3,111.3)									$	2,956.3		$	3,077.4		-3.9	%
Equity securities, at fair value (cost 2008, $50.9; 2007, $49.1)										36.6			47.2		-22.5	%
Short-term investments										113.6			60.8		86.8	%
Short-term investments, securities lending collateral										—			77.6		-100.0	%
Policy loans and other										106.9			101.0		5.8	%
Total Annuity and Life investments										3,213.4			3,364.0		-4.5	%
Property & Casualty
Fixed maturities, at fair value (amortized cost 2008, $659.3; 2007, $758.7)										622.1			758.8		-18.0	%
Equity securities, at fair value (cost 2008, $30.7; 2007, $32.4)										25.0			32.5		-23.1	%
Short-term investments										54.2			6.3		N.M.
Short-term investments, securities lending collateral										—			—		—
Total Property & Casualty investments										701.3			797.6		-12.1	%
Corporate investments										0.9			6.7		-86.6	%
Total investments										3,915.6			4,168.3		-6.1	%
Net investment income
Before tax	$	57.8		$	56.0		3.2	%	$	172.2		$	166.3		3.5	%
After tax		39.2			38.1		2.9	%		117.0			113.0		3.5	%
Net realized investment gains (losses) by investment portfolio included in Corporate and Other segment gain (loss)
Property & Casualty	$	(11.9	)	$	(0.6	)	N.M.		$	(13.6	)	$	(0.2	)	N.M.
Annuity		(30.7	)		0.1		N.M.			(41.8	)		3.5		N.M.
Life		(2.6	)		—		N.M.			(0.3	)		(1.2	)	N.M.
Corporate and Other		—			—		N.M.			—			—		N.M.
Total, before tax		(45.2	)		(0.5	)	N.M.			(55.7	)		2.1		N.M.
Total, after tax		(37.5	)		(0.3	)	N.M.			(44.2	)		1.4		N.M.
Per share, diluted	$	(0.96	)	$	(0.01	)	N.M.		$	(1.10	)	$	0.03		N.M.

N.M. - Not meaningful.

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HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview (Unaudited)

(Dollars in Millions)

	September 30, 2008					June 30, 2008			December 31, 2007
	Fair Value		Net Unrealized Gain (Loss)			Net Unrealized Gain (Loss)			Net Unrealized Gain (Loss)
FIXED MATURITY & EQUITY SECURITY INVESTMENTS
Fixed income securities
U.S. government and federally sponsored agency bonds	$	165.7	$	0.2		$	0.8		$	2.3
Municipal bonds		477.9		(22.8	)		(5.1	)		6.0
Corporate bonds
Financial institutions		183.6		(31.6	)		(13.5	)		(3.0	)
Other		1,259.5		(113.5	)		(34.1	)		11.0
High yield		162.9		(17.2	)		(9.5	)		(4.6	)
Foreign government bonds		14.9		0.5			0.9			1.5
Mortgage-backed securities
Prime agency		874.3		(0.6	)		(2.3	)		1.9
Prime other		16.3		(0.1	)		(1.6	)		0.5
Sub-prime, Alt-A		7.5		(0.7	)		(0.6	)		(0.1	)
Commerical mortgage-backed securities		258.5		(47.1	)		(23.9	)		(5.4	)
Asset-backed securities
Sub-prime, Alt-A		4.4		(0.3	)		(0.1	)		—
Collateralized debt obligations, collateralized loan obligations		14.9		(1.2	)		(2.5	)		(3.8	)
Other		96.1		(3.8	)		(1.1	)		0.4
Preferred stocks
Financial institutions		67.1		(25.1	)		(9.4	)		(7.6	)
Other		33.8		(8.1	)		(4.2	)		(3.4	)
Total fixed income securities		3,637.4		(271.4	)		(106.2	)		(4.3	)
Common stocks		2.6		0.3			0.3			(0.5	)
Derivatives		—		—			—			—
Total fixed maturity and equity security investments	$	3,640.0	$	(271.1	)	$	(105.9	)	$	(4.8	)
	September 30, 2008
	Fair Value		Net Unrealized Gain (Loss)
BANKING AND FINANCE EXPOSURE
Wells Fargo & Company / Wachovia Corporation	$	20.4	$	(1.8	)
Bank of America Corporation / Merrill Lynch & Co., Inc.		19.5		(4.9	)
JPMorgan Chase & Co.		18.8		(6.2	)
The Goldman Sachs Group, Inc.		18.3		(4.4	)
General Electric Company / GE Capital		18.0		(3.3	)
Citigroup Inc.		12.1		(2.5	)
American Express Company		12.0		(1.5	)
Morgan Stanley		11.0		(5.4	)
Barclays PLC		10.7		(3.3	)
National Australia Bank Limited		9.6		(0.8	)
UBS AG		9.5		(2.8	)
HSBC North America Holdings Inc.		8.8		(2.4	)
The Royal Bank of Scotland plc		6.9		(2.4	)
All other, 45 issuers		75.1		(15.0	)
Total	$	250.7	$	(56.7	)

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