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: February 8, 2010

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 September 30, 2009 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 February 8, 2010, Horace Mann Educators Corporation issued a press release reporting its financial results for the three and twelve month periods ended December 31, 2009. 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 February 8, 2010 reporting financial results for the three and twelve month periods ended December 31, 2009.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HORACE MANN EDUCATORS CORPORATION
By:	/S/    BRET A. CONKLIN
Name:	Bret A. Conklin
Title:	Senior Vice President & Controller (Principal Accounting Officer)

Date: February 8, 2010

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.

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

• Exclusive agents - Independent contractors.

• Career agents - Employee agents of the Company.

• Licensed producers - Staff of Dedicated 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 hurricane, 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. 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. In addition to the Company’s products, sales data includes authorized products sold by Dedicated Agents which are underwritten by third-party vendors. 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 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 FOURTH QUARTER

SPRINGFIELD, Ill., February 8, 2010 — Horace Mann Educators Corporation (NYSE:HMN) today reported net income of $22.2 million (54 cents per share) and $73.5 million ($1.81 per share) for the three and twelve months ended December 31, 2009, respectively, compared to net income of $22.9 million (58 cents per share) and $10.9 million (27 cents per share) for the same periods in 2008. Included in net income were net realized gains on securities of $4.6 million ($3.2 million after tax, or 7 cents per share) and $26.3 million ($17.2 million after tax, or 42 cents per share) for the three and twelve months ended December 31, 2009, respectively. In the same periods in 2008, net income included net realized investment losses of $8.2 million (which after reflecting the reduction of the deferred tax allowance established at September 30, 2008 resulted in a gain of $2.7 million after tax, or 7 cents per share) and $63.9 million ($41.5 million after tax, or $1.02 per share), respectively. All per-share amounts are stated on a diluted basis.

“With the further stabilization of the financial markets in the fourth quarter, our confidence in the quality of our investment portfolio continues to be validated. We finished the year in a net unrealized gain position, as we did at the end of the third quarter, with reported book value per share increasing 60 percent over the twelve months to $18.36. Meanwhile, key balance sheet ratios, as well as risk based capital, remain more than adequate to support our ratings,” said Louis G. Lower, President and Chief Executive Officer. “Horace Mann’s financial stability, combined with our established position in the educator market, contributed to another quarter of solid growth in annuity sales, which increased 10 percent compared to a year earlier, with the fourth quarter’s positive annuity net fund flows lifting the full year result to near-record levels. While the reduced number of new car sales in 2009 put pressure on applications for true new auto units, a 4 percent increase in true new units in the fourth quarter helped to close the gap to prior year, and we finished the full year only 2 percent below 2008. Looking to 2010, we expect additional improvement, as our growth in total points of distribution and recent growth in agent count build on the momentum we’ve established to transform our distribution system to a new, more powerful model.”

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“Net income before realized investment gains and losses was 47 cents per share for the fourth quarter compared to 51 cents a year ago. Within those results, the current period included a 6 cent per share charge related to the North Carolina Coastal Property Insurance Pool and the fourth quarter of 2008 benefited from a 10 cent per share non-recurring decrease in federal income tax,” continued Lower. “For property and casualty, catastrophe losses were minimal in the quarter. The current accident year combined ratio excluding catastrophes was approximately 97 percent in the current quarter, which was nearly 7 percentage points higher than 2008, primarily reflecting an increase in auto loss frequency, a higher level of property sinkhole losses and a lower level of favorable current accident year reserve development. Meanwhile, combined annuity and life segment pretax earnings increased significantly in the fourth quarter compared to prior year, primarily due to the positive impact of financial market performance as well as a notable improvement in the interest margin.”

“Looking forward to 2010, we estimate full-year net income before realized investment gains and losses of between $1.65 and $1.85 per share,” Lower said. “This projection anticipates: for property and casualty, a moderation in recent auto frequency trends and a continuing high level of property sinkhole losses in Florida; for annuity, continued strong increases in fixed annuity spreads and an 8 to 10 percent increase in the S&P 500 Index; and for life, continued growth in investment income and more normal mortality levels.”

Segment Earnings

The property and casualty segment recorded net income of $10.2 million for the quarter, a decrease of $4.3 million compared to the same period in 2008. Pretax catastrophe costs in the current quarter were $1.2 million compared to $9.9 million incurred in the fourth quarter of 2008, which included approximately $7 million of adverse development of reserves for hurricane losses occurring in the third quarter. The fourth quarter 2009 property and casualty combined ratio was 95.6 percent, including 0.9 percentage point due to catastrophe costs, compared to 92.9 percent, including 7.2 percentage points due to catastrophe costs, in the prior year period. Favorable prior years’ reserve development totaling $3.4 million was recorded in the fourth quarter, which represented 2.4 percentage points on the combined ratio, compared to $6.7 million, or 4.8 percentage points on the combined ratio, recorded in the fourth quarter of 2008. Additionally, the fourth quarter 2009 combined ratio excluding catastrophes was reduced by 1.4 percentage points due to favorable development of current accident year reserves, compared to a benefit of 3.2 percentage points recorded in the fourth quarter of 2008 due to similar favorable development. In the current quarter, property and casualty pretax income was reduced by $3.8 million as a result of writing off the company’s equity interest in the accumulated surplus of the North Carolina Coastal Property Insurance Pool (the “Pool”). This write-off, recorded in Other Income (Expense), is the result of recent legislation that changed the ownership status of the Pool and also capped future assessments that may be levied against insurers.

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Annuity segment net income was $6.4 million for the three months ended December 31, 2009, reflecting an increase of $3.5 million compared to the same period in 2008. Annuity segment net income for the fourth quarter and full year 2008 benefited from a non-recurring reduction of $2.6 million in federal income tax expense as a result of the IRS completing its examination of the 2002, 2004, 2005 and 2006 tax years. In the current quarter, the positive financial market performance had a favorable impact on both the valuation of annuity deferred policy acquisition costs and the level of guaranteed minimum death benefit reserves, and favorably affected the level of charges and fees earned on variable contract deposits in the quarter compared to prior year. In addition, the interest margin earned on fixed annuity assets increased significantly compared to a year earlier, with net interest spreads reaching 1.69 percent for the year, up 15 basis points over 2008. Total annuity net fund flows continued to be positive in the current period, as they were throughout 2008 and 2009, and total cash value persistency of 94 percent increased about 1 percentage point compared to a year earlier.

Life segment net income of $5.5 million for the fourth quarter increased $1.3 million compared to the same period in 2008, primarily due to growth in investment income. Life persistency remained in excess of 94 percent.

Segment Revenues

At $1.0 billion for the full year, the company’s total premiums written and contract deposits increased 3 percent and 5 percent compared to the three and twelve months ended December 31, 2008, respectively, primarily reflecting increases in annuity deposit receipts.

Total property and casualty premiums written were comparable to the fourth quarter of 2008 and increased 1 percent for the full year, primarily reflecting increases in average property and auto premiums per policy.

Annuity deposits received increased 11 percent and 12 percent compared to the three and twelve months ended December 31, 2008, respectively. Life segment insurance premiums and contract deposits decreased 2 percent compared to the prior year periods.

Sales and Distribution

For the three months ended December 31, 2009, total new auto sales units increased slightly compared to the prior year, while the full year reflected a 4 percent decrease compared to 2008. “In spite of a decline in total auto sales units, average agent true new auto productivity increased in 2009,” said Lower. Annuity sales were up 10 percent in the fourth quarter, following a 50 percent increase in the first half of 2009, and a 23 percent increase in the third quarter, for a combined full-year growth of 31 percent compared to 2008. While flexible premium sales increased 22 percent during the year, single premium and rollover deposits increased 34 percent and were the

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primary drivers of growth in 2009. For the quarter and full year, total new life production decreased 6 percent and less than 1 percent compared to the prior year, reflecting a decline in sales of third-party vendor products which more than offset the growth in sales of Horace Mann’s life products. Driven by the mid-year introduction of a new educator-focused portfolio of Horace Mann term and whole life products, sales of Horace Mann’s life products increased 27 percent and 4 percent compared to the three and 12 months ended December 31, 2008.

At December 31, 2009, Horace Mann’s 715 agents represented an increase of 7 percent compared to a year earlier, with the number of agents growing steadily throughout the year. Including 571 licensed producers who work for the agents, Horace Mann’s total points of distribution increased to 1,286, a growth of 21 percent over year-end 2008. “We are encouraged by the increase in the number of agents in 2009. This agent growth, coupled with the positive impact that our new Agency Business Model is having on productivity and the recent enhancements made to our field sales management structure, bodes well for Horace Mann’s future growth prospects,” said Lower. Of the 715 agents at year-end, 249, or 35 percent, were Exclusive Agents, comprised of 130 former employee agents and 119 new appointments. The company’s Exclusive Agent program was launched on January 1, 2009.

Investment Gains and Losses

In the fourth quarter of 2009, pretax net realized investment gains were $4.6 million, which included a $0.2 million credit-related impairment write-down and $2.3 million of realized impairment losses on securities that were disposed of during the quarter. The impairment amounts were more than offset by $5.7 million of realized gains on other security disposals and $1.4 million of litigation proceeds on debt securities.

Horace Mann’s net unrealized investment gains on fixed maturity and equity securities of $36.1 million at December 31, 2009 continued to reflect improvement compared to the net unrealized loss of $327.2 million recorded at December 31, 2008. “Credit spreads narrowed across virtually all asset classes in 2009, with our investment grade corporate bond portfolio experiencing the most significant improvement in fair value. Some of the more highly stressed asset classes also showed improvement, including our financial institution bond and preferred stock holdings, as well as our CMBS and high yield bond portfolios,” said Lower. “In light of the widespread improvement in the credit markets, coupled with our insignificant exposure to sub-prime, Alt-A, other lower-quality structured securities and commercial mortgage whole loans, we remain very comfortable with the underlying credit quality of our investment portfolio and have a high level of confidence that any future investment losses relating to the current economic environment will be very manageable.”

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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 September 30, 2009 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.

# # #

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HORACE MANN EDUCATORS CORPORATION

Digest of Earnings and Highlights (Unaudited)

(Dollars in Millions, Except Per Share Data)

	Quarter Ended December 31,								Year Ended December 31,
	2009			2008			% Change		2009			2008			% Change
DIGEST OF EARNINGS
Net income	$	22.2		$	22.9		-3.1	%	$	73.5		$	10.9		N.M.
Net income per share:
Basic	$	0.57		$	0.59		-3.4	%	$	1.88		$	0.27		N.M.
Diluted	$	0.54		$	0.58		-6.9	%	$	1.81		$	0.27		N.M.
Weighted average number of shares and equivalent shares (in millions) (A):
Basic		39.2			39.1		0.3	%		39.2			39.8		-1.5	%
Diluted		40.6			39.8		2.0	%		40.5			40.6		-0.2	%
HIGHLIGHTS
Operations
Insurance premiums written and contract deposits	$	246.0		$	239.1		2.9	%	$	1,003.7		$	960.1		4.5	%
Return on equity (B)										12.7	%		1.9	%	N.M.
Property & Casualty GAAP combined ratio		95.6	%		92.9	%	N.M.			99.5	%		100.7	%	N.M.
Effect of catastrophe costs on the Property & Casualty combined ratio		0.9	%		7.2	%	N.M.			6.1	%		13.7	%	N.M.
Dedicated agents (C)										715			670		6.7	%
Licensed producers (D)										571			394		44.9	%
Total points of distribution										1,286			1,064		20.9	%
Additional Per Share Information
Dividends paid	$	0.08		$	0.0525		52.4	%	$	0.2375		$	0.3675		-35.4	%
Book value (E)									$	18.36		$	11.49		59.8	%
Financial Position
Total assets									$	6,343.1		$	5,507.7		15.2	%
Short-term debt										38.0			38.0		—
Long-term debt										199.6			199.5		0.1	%
Total shareholders’ equity										719.5			448.8		60.3	%

N.M. - Not meaningful.

(A) 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.

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

(C) Agents under contract with the Company to market only the Company’s products and limited additional third-party vendor products authorized by the Company.

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

(E) Book value per share excluding the fair value adjustment for investments was $17.79 at December 31, 2009 and $16.15 at December 31, 2008. Ending shares outstanding were 39,184,721 at December 31, 2009 and 39,061,788 at December 31, 2008.

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HORACE MANN EDUCATORS CORPORATION

Statements of Operations and Supplemental GAAP Consolidated Data (Unaudited)

(Dollars in Millions)

	Quarter Ended December 31,								Year Ended December 31,
	2009			2008			% Change		2009			2008			% Change
STATEMENTS OF OPERATIONS
Insurance premiums and contract charges earned	$	167.8		$	168.8		-0.6	%	$	659.6		$	658.5		0.2	%
Net investment income		65.4			58.1		12.6	%		246.8			230.3		7.2	%
Net realized investment gains (losses)		4.6			(8.2	)	N.M.			26.3			(63.9	)	N.M.
Other income (expense) (A)		(1.9	)		2.4		N.M.			4.7			9.9		-52.5	%
Total revenues		235.9			221.1		6.7	%		937.4			834.8		12.3	%
Benefits, claims and settlement expenses		110.1			111.3		-1.1	%		458.7			471.5		-2.7	%
Interest credited		35.9			33.9		5.9	%		139.4			131.8		5.8	%
Policy acquisition expenses amortized		20.2			23.1		-12.6	%		80.4			79.1		1.6	%
Operating expenses		35.6			33.7		5.6	%		141.2			132.4		6.6	%
Amortization of intangible assets		—			1.2		-100.0	%		0.2			5.3		-96.2	%
Interest expense		3.5			4.3		-18.6	%		14.0			14.5		-3.4	%
Total benefits, losses and expenses		205.3			207.5		-1.1	%		833.9			834.6		-0.1	%
Income before income taxes		30.6			13.6		125.0	%		103.5			0.2		N.M.
Income tax expense (benefit)		8.4			(9.3	)	N.M.			30.0			(10.7	)	N.M.
Net income	$	22.2		$	22.9		-3.1	%	$	73.5		$	10.9		N.M.
ANALYSIS OF PREMIUMS WRITTEN AND CONTRACT DEPOSITS
Property & Casualty
Automobile and property (voluntary)	$	136.0		$	134.8		0.9	%	$	550.2		$	542.2		1.5	%
Involuntary and other property & casualty		0.8			2.3		-65.2	%		3.3			3.7		-10.8	%
Total Property & Casualty		136.8			137.1		-0.2	%		553.5			545.9		1.4	%
Annuity deposits		81.7			73.9		10.6	%		349.8			311.7		12.2	%
Life		27.5			28.1		-2.1	%		100.4			102.5		-2.0	%
Total	$	246.0		$	239.1		2.9	%	$	1,003.7		$	960.1		4.5	%
ANALYSIS OF SEGMENT NET INCOME (LOSS)
Property & Casualty	$	10.2		$	14.5		-29.7	%	$	30.0		$	28.1		6.8	%
Annuity		6.4			2.9		120.7	%		21.2			17.3		22.5	%
Life		5.5			4.2		31.0	%		18.4			16.4		12.2	%
Corporate and other (B)		0.1			1.3		-92.3	%		3.9			(50.9	)	N.M.
Net income		22.2			22.9		-3.1	%		73.5			10.9		N.M.
Catastrophe costs, after tax, included above (C)		(0.8	)		(6.5	)	-87.7	%		(21.5	)		(48.1	)	-55.3	%

N.M. - Not meaningful.

(A) The three and twelve months ended December 31, 2009 include a charge of $3.8 million to write off the company’s equity interest in the accumulated surplus of the North Carolina Coastal Property Insurance Pool as a result of recent legislation in that state.

(B) 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.

(C) 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 December 31,								Year Ended December 31,
	2009			2008			% Change		2009			2008			% Change
PROPERTY & CASUALTY
Premiums written	$	136.8		$	137.1		-0.2	%	$	553.5		$	545.9		1.4	%
Premiums earned		138.9			139.1		-0.1	%		547.3			541.1		1.1	%
Net investment income		8.8			8.7		1.1	%		34.4			35.7		-3.6	%
Other income (expense) (A)		(3.6	)		0.4		N.M.			(1.3	)		1.5		N.M.
Losses and loss adjustment expenses (LAE)		97.9			95.9		2.1	%		407.1			416.1		-2.2	%
Operating expenses (includes policy acquisition expenses amortized)		34.8			33.2		4.8	%		137.6			128.5		7.1	%
Income before tax		11.4			19.1		-40.3	%		35.7			33.7		5.9	%
Net income		10.2			14.5		-29.7	%		30.0			28.1		6.8	%
Net investment income, after tax		7.7			7.2		6.9	%		29.5			29.8		-1.0	%
Catastrophe costs, after tax (B)		0.8			6.5		-87.7	%		21.5			48.1		-55.3	%
Catastrophe losses and LAE, before tax		1.2			9.9		-87.9	%		33.1			73.9		-55.2	%
Reinsurance reinstatement premiums, before tax		—			—		—			—			—		—
Operating statistics:
Loss and loss adjustment expense ratio		70.5	%		69.0	%	N.M.			74.4	%		76.9	%	N.M.
Expense ratio		25.1	%		23.9	%	N.M.			25.1	%		23.8	%	N.M.
Combined ratio		95.6	%		92.9	%	N.M.			99.5	%		100.7	%	N.M.
Effect on the combined ratio of:
Catastrophe costs		0.9	%		7.2	%	N.M.			6.1	%		13.7	%	N.M.
Claims office consolidation costs (all in LAE)		0.1	%		3.0	%	N.M.			0.7	%		0.8	%	N.M.
Automobile and property detail:
Premiums written (voluntary) (C)	$	136.0		$	134.8		0.9	%	$	550.2		$	542.2		1.5	%
Automobile		93.2			92.6		0.6	%		372.5			367.8		1.3	%
Property		42.8			42.2		1.4	%		177.7			174.4		1.9	%
Premiums earned (voluntary) (C)		137.3			136.1		0.9	%		544.1			537.8		1.2	%
Automobile		93.0			91.9		1.2	%		369.8			365.5		1.2	%
Property		44.3			44.2		0.2	%		174.3			172.3		1.2	%
Policies in force (voluntary) (in thousands)										790			798		-1.0	%
Automobile										528			535		-1.3	%
Property										262			263		-0.4	%
Policy renewal rate (voluntary)
Automobile (6 months)										91.3	%		91.1	%	N.M.
Property (12 months)										88.8	%		88.6	%	N.M.
Voluntary automobile operating statistics:
Loss and loss adjustment expense ratio		76.6	%		67.0	%	N.M.			72.4	%		68.0	%	N.M.
Expense ratio		24.4	%		23.4	%	N.M.			25.1	%		23.5	%	N.M.
Combined ratio		101.0	%		90.4	%	N.M.			97.5	%		91.5	%	N.M.
Effect on the combined ratio of:
Catastrophe costs		0.2	%		0.0	%	N.M.			0.8	%		1.2	%	N.M.
Claims office consolidation costs (all in LAE)		0.1	%		3.5	%	N.M.			0.8	%		0.9	%	N.M.
Total property operating statistics		:
Loss and loss adjustment expense ratio		57.6	%		74.7	%	N.M.			78.6	%		97.2	%	N.M.
Expense ratio		25.8	%		24.8	%	N.M.			24.9	%		24.2	%	N.M.
Combined ratio		83.4	%		99.5	%	N.M.			103.5	%		121.4	%	N.M.
Effect on the combined ratio of:
Catastrophe costs		2.4	%		21.6	%	N.M.			17.6	%		40.4	%	N.M.
Claims office consolidation costs (all in LAE)		0.1	%		1.9	%	N.M.			0.4	%		0.6	%	N.M.
Prior years’ reserves favorable (adverse) development, pretax
Voluntary automobile	$	2.5		$	6.3		-60.3	%	$	9.2		$	16.0		-42.5	%
Total property		0.9			(0.6	)	N.M.			1.8			(0.5	)	N.M.
Other property and casualty		—			1.0		-100.0	%		0.7			2.6		-73.1	%
Total		3.4			6.7		-49.3	%		11.7			18.1		-35.4	%

N.M. - Not meaningful.

(A) The three and twelve months ended December 31, 2009 include a charge of $3.8 million to write off the company’s equity interest in the accumulated surplus of the North Carolina Coastal Property Insurance Pool as a result of recent legislation in that state.

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

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

-3-

HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview (Unaudited)

(Dollars in Millions)

	Quarter Ended December 31,								Year Ended December 31,
	2009			2008			% Change		2009			2008			% Change
ANNUITY
Contract deposits	$	81.7		$	73.9		10.6	%	$	349.8		$	311.7		12.2	%
Variable		29.7			31.8		-6.6	%		112.2			134.4		-16.5	%
Fixed		52.0			42.1		23.5	%		237.6			177.3		34.0	%
Contract charges earned		4.3			3.9		10.3	%		14.5			17.7		-18.1	%
Net investment income		40.1			34.7		15.6	%		149.7			136.2		9.9	%
Net interest margin (without realized investment gains and losses)		14.2			10.5		35.2	%		49.7			42.7		16.4	%
Other income		0.9			0.8		12.5	%		3.1			4.9		-36.7	%
Mortality loss and other reserve changes		(0.2	)		(1.3	)	-84.6	%		0.5			(1.7	)	N.M.
Operating expenses (includes policy acquisition expenses amortized)		8.8			12.8		-31.3	%		35.5			39.0		-9.0	%
Amortization of intangible assets		—			0.9		-100.0	%		—			4.0		-100.0	%
Income before tax		10.4			0.2		N.M.			32.3			20.6		56.8	%
Net income		6.4			2.9		120.7	%		21.2			17.3		22.5	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	0.5		$	(4.1	)	N.M.		$	1.3		$	(4.0	)	N.M.
Value of acquired insurance in force		—			—		—			—			—		—
Guaranteed minimum death benefit reserve		0.1			(1.0	)	N.M.			0.8			(1.3	)	N.M.
Annuity contracts in force (in thousands)										178			171		4.1	%
Accumulated value on deposit									$	3,713.6		$	3,262.3		13.8	%
Variable										1,226.4			965.2		27.1	%
Fixed										2,487.2			2,297.1		8.3	%
Annuity accumulated value retention - 12 months
Variable accumulations										93.4	%		93.2	%	N.M.
Fixed accumulations										94.4	%		93.5	%	N.M.
LIFE
Premiums and contract deposits	$	27.5		$	28.1		-2.1	%	$	100.4		$	102.5		-2.0	%
Premiums and contract charges earned		24.6			25.8		-4.7	%		97.8			99.7		-1.9	%
Net investment income		16.8			14.8		13.5	%		63.8			59.3		7.6	%
Income before tax		8.7			6.4		35.9	%		28.9			25.6		12.9	%
Net income		5.5			4.2		31.0	%		18.4			16.4		12.2	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	(0.7	)	$	(0.3	)	133.3	%	$	(0.9	)	$	(0.2	)	350.0	%
Life policies in force (in thousands)										213			221		-3.6	%
Life insurance in force									$	13,761		$	13,672		0.7	%
Lapse ratio - 12 months (Ordinary life insurance)										5.4	%		5.4	%	N.M.
CORPORATE AND OTHER (A)
Components of income (loss) before tax:
Net realized investment gains (losses)	$	4.6		$	(8.2	)	N.M.		$	26.3		$	(63.9	)	N.M.
Interest expense		(3.5	)		(4.3	)	-18.6	%		(14.0	)		(14.5	)	-3.4	%
Other operating expenses, net investment income and other income		(1.0	)		0.4		N.M.			(5.7	)		(1.3	)	N.M.
Income (loss) before tax		0.1			(12.1	)	N.M.			6.6			(79.7	)	N.M.
Net income (loss)		0.1			1.3		-92.3	%		3.9			(50.9	)	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.

-4-

HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview (Unaudited)

(Dollars in Millions)

	Quarter Ended December 31,								Year Ended December 31,
	2009			2008			% Change		2009			2008			% Change
INVESTMENTS
Annuity and Life
Fixed maturities, at fair value (amortized cost 2009, $3,341.1; 2008, $3,145.4)									$	3,358.9		$	2,876.7		16.8	%
Equity securities, at fair value (cost 2009, $43.2; 2008, $55.6)										40.6			38.3		6.0	%
Short-term investments										252.6			154.1		63.9	%
Short-term investments, securities lending collateral										—			—		—
Policy loans and other										116.0			109.2		6.2	%
Total Annuity and Life investments										3,768.1			3,178.3		18.6	%
Property & Casualty
Fixed maturities, at fair value (amortized cost 2009, $720.9; 2008, $642.5)										741.0			608.6		21.8	%
Equity securities, at fair value (cost 2009, $18.3; 2008, $30.6)										19.1			23.3		-18.0	%
Short-term investments										25.4			66.0		-61.5	%
Short-term investments, securities lending collateral										—			—		—
Total Property & Casualty investments										785.5			697.9		12.6	%
Corporate investments										21.0			25.6		-18.0	%
Total investments										4,574.6			3,901.8		17.2	%
Net investment income
Before tax	$	65.4		$	58.1		12.6	%	$	246.8		$	230.3		7.2	%
After tax		44.4			39.3		13.0	%		167.5			156.3		7.2	%
Net realized investment gains (losses) by investment portfolio included in Corporate and Other segment income (loss)
Property & Casualty	$	—		$	(2.8	)	-100.0	%	$	(2.5	)	$	(16.4	)	-84.8	%
Annuity		5.7			(5.3	)	N.M.			22.0			(47.1	)	N.M.
Life		(1.1	)		(0.1	)	N.M.			6.8			(0.4	)	N.M.
Corporate and Other		—			—		—			—			—		—
Total, before tax		4.6			(8.2	)	N.M.			26.3			(63.9	)	N.M.
Total, after tax		3.2			2.7		18.5	%		17.2			(41.5	)	N.M.
Per share, diluted	$	0.07		$	0.07		—		$	0.42		$	(1.02	)	N.M.

N.M. - Not meaningful.

-5-

HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview (Unaudited)

(Dollars in Millions)

	December 31, 2009					September 30, 2009			June 30, 2009			March 31, 2009			December 31, 2008
	Fair Value		Net Unrealized Gain (Loss)			Net Unrealized Gain (Loss)			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	$	347.2	$	(13.8	)	$	2.0		$	(2.5	)	$	3.4		$	4.9
Municipal bonds		913.9		22.8			56.1			6.3			(3.7	)		(14.1	)
Corporate bonds
Financial institutions		240.0		8.1			6.9			(11.0	)		(35.3	)		(19.9	)
Other		1,359.0		73.0			84.6			(14.3	)		(140.1	)		(122.6	)
High yield		183.1		(5.9	)		(11.8	)		(26.4	)		(28.0	)		(38.0	)
Foreign government bonds		41.9		2.0			3.0			0.7			(0.1	)		0.5
Mortgage-backed securities
Prime agency		455.1		18.3			23.9			18.5			21.2			20.5
Prime other		16.1		0.4			0.5			(0.8	)		(0.2	)		(0.6	)
Sub-prime, Alt-A		0.5		(0.1	)		(0.4	)		(0.8	)		(0.9	)		(0.7	)
Commercial mortgage-backed securities		267.4		(67.5	)		(71.7	)		(106.6	)		(115.8	)		(108.6	)
Asset-backed securities
Sub-prime, Alt-A		0.5		—			(0.5	)		(0.3	)		(0.1	)		0.1
Collateralized debt obligations, collateralized loan obligations		14.3		(4.1	)		(3.3	)		(4.0	)		(4.7	)		(0.4	)
Other		204.4		8.2			4.5			(4.8	)		(8.3	)		(8.5	)
Preferred stocks
Financial institutions		75.5		(6.4	)		(9.5	)		(19.7	)		(34.2	)		(29.8	)
Other		39.0		0.3			(0.7	)		(6.1	)		(12.5	)		(10.0	)
Total fixed income securities		4,157.9		35.3			83.6			(171.8	)		(359.3	)		(327.2	)
Common stocks		1.7		0.8			0.5			0.5			(0.3	)		—
Derivatives		—		—			—			—			—			—
Total fixed maturity and equity security investments	$	4,159.6	$	36.1		$	84.1		$	(171.3	)	$	(359.6	)	$	(327.2	)

-6-