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 28, 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 March 31, 2010 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 28, 2010, Horace Mann Educators Corporation issued a press release reporting its financial results for the three and six month periods ended June 30, 2010. 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 28, 2010 reporting financial results for the three and six month periods ended June 30, 2010.

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:		Bret A. Conklin
	Name:		Bret A. Conklin
	Title:		Senior Vice President & Controller
			(Principal Accounting Officer)

Date: July 28, 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.

— Exclusive Agency - A local Horace Mann agency created and owned by an independent contractor who has signed an Exclusive Agent agreement with the Company (an “Exclusive Agent”). That agreement states that only the Company’s products and limited additional third-party vendor products authorized by the Company will be marketed by the agency. An individual may sign multiple Exclusive Agent agreements with the Company resulting in creation of multiple Exclusive Agencies.

— Employee Agents - Agents who have employee status with the Company and by contract market only the Company’s products and limited additional third-party vendor products authorized by the Company.

— Independent Agents - Non-exclusive independent contractors 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.

-1-

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 of loss 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 Employee Agents, Exclusive Agents, and their licensed staff 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 its agency force. 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]

Contact information:

Dwayne Hallman, Senior Vice President - Finance

217-788-5708

Todd Nelson, Vice President - Finance

217-788-5738

HORACE MANN REPORTS RESULTS

FOR SECOND QUARTER

SPRINGFIELD, Ill., July 28, 2010 — Horace Mann Educators Corporation (NYSE:HMN) today reported net income of $23.0 million (56 cents per share) and $45.6 million ($1.12 per share) for the three and six months ended June 30, 2010, compared to $18.6 million (46 cents per share) and $32.0 million (79 cents per share) for the same periods in 2009. Included in net income were net realized gains on securities of $8.3 million ($5.5 million after tax, or 13 cents per share) and $13.2 million ($8.6 million after tax, or 21 cents per share) for the three and six months ended June 30, 2010, respectively. In the same periods in 2009, net income included net realized investment gains of $11.0 million ($7.2 million after tax, or 18 cents per share) and $10.2 million ($6.6 million after tax, or 16 cents per share), respectively. All per-share amounts are stated on a diluted basis.

“The continued improvement in Horace Mann’s net unrealized investment gain position, coupled with strong underlying operating results in the second quarter — particularly in our lead auto and annuity lines — resulted in a June 30, 2010 reported book value per share of $22.17, an increase of 55 percent over the last twelve months,” said Louis G. Lower, President and Chief Executive Officer. “Net income before realized investment gains and losses was 43 cents per share for the second quarter compared to 28 cents a year ago, led by improved results in our auto line,” continued Lower. “Even with a significant level of second quarter catastrophe losses and an increase in Florida sinkhole claims, our property and casualty earnings increased substantially compared to the second quarter of the prior year. The current accident year combined ratio excluding catastrophes was just below 90 percent in the current quarter, which was nearly 5 percentage points better than the same period last year. The improvement in the segment’s combined ratio was primarily driven by a decrease in the auto loss ratio. Combined annuity and life segment net income increased in the second quarter compared to prior year, including a notable improvement in the interest margin, partially offset by the impact of this quarter’s valuation of annuity deferred policy acquisition costs.”

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Segment Earnings

The property and casualty segment recorded net income of $8.5 million for the quarter, an increase of $4.9 million compared to the same period in 2009. Pretax catastrophe costs in the current quarter of $16.2 million were slightly higher than the $15.1 million incurred in the second quarter of 2009. The second quarter 2010 property and casualty combined ratio was 99.0 percent, including 11.6 percentage points due to catastrophe costs, compared to 103.8 percent, including 11.1 percentage points due to catastrophe costs, in the prior year period. Excluding claim settlement expenses, Florida sinkhole losses incurred in the current quarter and for the six months of $4.5 million and $8.0 million, respectively, were consistent with the company’s experience in the last two quarters of 2009; however, they were higher than the $1.5 million and $2.8 million incurred in the three and six months ended June 30, 2009. “While high catastrophe and sinkhole losses continue to be a headwind to property and casualty earnings, our Florida risk mitigation plan, primarily focused on non-renewals, is currently ahead of schedule,” said Lower. Favorable prior years’ reserve development totaling $2.8 million was recorded in the second quarter, which represented 2.0 percentage points on the combined ratio, compared to $2.1 million, or 1.5 percentage points on the combined ratio, recorded in the second quarter of 2009. In addition to the prior year development, favorable current accident year reserve development of $1.5 million was also recorded in the second quarter of 2010 in the auto line.

Annuity segment net income was $6.9 million for the three months ended June 30, 2010, increasing $0.6 million compared to the same period in 2009. The current quarter included increased amortization as a result of the valuation of deferred policy acquisition costs of $5.3 million compared to prior year, partially offset by a $1.4 million reduction in the Company’s liability for uncertain tax positions. The interest margin earned on fixed annuity assets increased 34 percent compared to the second quarter of 2009, with year-to-date net interest spreads reaching 2.02 percent for the current period, up 46 basis points compared to a year ago. Charges and fees earned in the quarter, primarily on variable annuity contracts, increased 32 percent compared to prior year. Total annuity net fund flows continued to be positive in the current period, as they were throughout 2008 and 2009, with total accumulated account values increasing 11 percent compared to 12 months earlier. Total cash value persistency of 94 percent increased slightly compared to prior year.

Life segment net income of $5.5 million for the second quarter increased $0.5 million compared to the same period in 2009, primarily due to growth in investment income. Higher mortality costs in the current period were partially offset by lower operating expenses. Life persistency increased to nearly 95 percent.

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Segment Revenues

Compared to 2009, the company’s total premiums written and contract deposits decreased 4 percent for the quarter, reducing year-to-date growth to 2 percent, as increases in the property and casualty segment were offset by the current quarter decrease in annuity deposit receipts.

Total property and casualty premiums written increased 3 percent and 2 percent for the current quarter and six months, respectively, each reflecting increases in average property and auto premiums per policy.

Annuity deposits received decreased 13 percent compared to the three months ended June 30, 2009, comprised of a 22 percent reduction in single deposit and rollover receipts and a 6 percent decrease in scheduled, flexible premium annuity deposit receipts. For the six months, receipts for both types of annuity deposits increased slightly compared to a year earlier. Life segment insurance premiums and contract deposits decreased 2 percent and 1 percent compared to the prior year three and six months, respectively.

Sales and Distribution

For the three and six months ended June 30, 2010, total new auto sales units decreased 5 percent and 4 percent, respectively, compared to the same periods in the prior year, primarily reflecting decreases in true new auto sales of 7 percent and 4 percent, respectively. Following the significant growth of 50 percent in the first half of 2009, total annuity sales decreased 23 percent in the current quarter — largely driven by a decrease in single premium and rollover deposits — and 16 percent for the six months, which included a decline in flexible premium annuity sales of approximately 50 percent. Total new life production increased 16 percent and 2 percent compared to the prior year quarter and six months, due primarily to an increase in sales of third-party vendor products.

At June 30, 2010, there were 343 Horace Mann Exclusive Agencies, an increase of 93 compared to December 31, 2009. The company’s Exclusive Agent opportunity was launched on January 1, 2009. Of the 343 Exclusive Agencies at quarter-end, 187 were formed by previous Employee Agents and 156 were formed by new appointments. In addition to the Exclusive Agencies, there were 339 Employee Agents at quarter-end. Combined, there were 682 Exclusive Agencies and Employee Agents at June 30, 2010, compared to 716 at December 31, 2009 and 684 at June 30, 2009. “While we did experience a decline in the total number of agencies and agents in the first six months — including a first quarter seasonal pattern that is not unusual for us — we are expecting a modest increase over the remainder of 2010,” said Lower.

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Investment Gains and Losses

In the second quarter of 2010, pretax net realized investment gains were $8.3 million. The company realized $14.1 million of gross gains on securities that were disposed of during the quarter, partially offset by a $0.7 million credit-related impairment write-down and $5.1 million of realized impairment losses on other security disposals.

Horace Mann’s net unrealized investment gains on fixed maturity and equity securities of $222.8 million at June 30, 2010 continued to reflect improvement compared to the net unrealized gains of $101.7 million and $36.1 million at March 31, 2010 and December 31, 2009, respectively, and the net unrealized loss of $171.3 million at June 30, 2009.

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, 2010 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
	2010			2009					2010			2009
DIGEST OF EARNINGS
Net income	$	23.0		$	18.6		23.7	%	$	45.6		$	32.0		42.5	%
Net income per share:
Basic	$	0.59		$	0.48		22.9	%	$	1.16		$	0.82		41.5	%
Diluted	$	0.56		$	0.46		21.7	%	$	1.12		$	0.79		41.8	%
Weighted average number of shares and equivalent shares (in millions)
Basic		39.3			39.2		0.3	%		39.2			39.2		-
Diluted		40.9			40.5		1.0	%		40.9			40.5		1.0	%
HIGHLIGHTS
Operations
Insurance premiums written and contract deposits	$	254.8		$	264.7		-3.7	%	$	493.5		$	486.0		1.5	%
Return on equity (A)										11.9	%		4.8	%	N.	M.
Property & Casualty GAAP combined ratio		99.0	%		103.8	%	N.	M.		97.7	%		99.2	%	N.	M.
Effect of catastrophe costs on the Property & Casualty combined ratio		11.6	%		11.1	%	N.	M.		8.3	%		7.2	%	N.	M.
Exclusive agencies (B)										343			133		157.9	%
Employee agents (C)										339			551		-38.5	%
Total										682			684		-0.3	%
Additional Per Share Information
Dividends paid	$	0.08		$	0.0525		52.4	%	$	0.16		$	0.105		52.4	%
Book value (D)									$	22.17		$	14.34		54.6	%
Financial Position
Total assets									$	6,669.4		$	5,828.2		14.4	%
Short-term debt										38.0			38.0		-
Long-term debt										199.6			199.6		-
Total shareholders’ equity										873.6			561.8		55.5	%

N.M.-Not meaningful.

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

(B) Local Horace Mann agencies created and owned by independent contractors who have signed Exclusive Agent agreements with the Company (“Exclusive Agents”). The agreement states that only the Company’s products and limited additional third-party vendor products authorized by the Company will be marketed by the agency. An individual may sign multiple Exclusive Agent agreements with the Company resulting in creation of multiple Exclusive Agencies.

(C) Agents who have employee status with the Company and by contract market only the Company’s products and limited additional third-party vendor products authorized by the Company.

(D) Book value per share excluding the fair value adjustment for investments was $18.79 at June 30, 2010 and $16.86 at June 30, 2009. Ending shares outstanding were 39,398,373 at June 30, 2010 and 39,176,856 at June 30, 2009.

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HORACE MANN EDUCATORS CORPORATION

Statements of Operations and Supplemental GAAP Consolidated Data (Unaudited)

(Dollars in Millions)

	Quarter Ended June 30,						% Change		Six Months Ended June  30,						% Change
	2010			2009					2010			2009
STATEMENTS OF OPERATIONS
Insurance premiums and contract charges earned	$	168.4		$	163.5		3.0	%	$	334.8		$	326.0		2.7	%
Net investment income		69.1			61.0		13.3	%		135.0			118.9		13.5	%
Net realized investment gains		8.3			11.0		-24.5	%		13.2			10.2		29.4	%
Other income		2.2			1.9		15.8	%		3.7			4.8		-22.9	%
Total revenues		248.0			237.4		4.5	%		486.7			459.9		5.8	%
Benefits, claims and settlement expenses		118.4			118.2		0.2	%		231.3			226.0		2.3	%
Interest credited		36.2			34.5		4.9	%		71.8			68.2		5.3	%
Policy acquisition expenses amortized		25.8			19.1		35.1	%		45.9			42.1		9.0	%
Operating expenses		33.4			35.0		-4.6	%		68.1			70.7		-3.7	%
Amortization of intangible assets		-			-		-			-			0.2		-100.0	%
Interest expense		3.5			3.5		-			7.0			7.0		-
Total benefits, losses and expenses		217.3			210.3		3.3	%		424.1			414.2		2.4	%
Income before income taxes		30.7			27.1		13.3	%		62.6			45.7		37.0	%
Income tax expense		7.7			8.5		-9.4	%		17.0			13.7		24.1	%
Net income	$	23.0		$	18.6		23.7	%	$	45.6		$	32.0		42.5	%
ANALYSIS OF PREMIUMS WRITTEN AND CONTRACT DEPOSITS
Property & Casualty
Automobile and property (voluntary)	$	143.1		$	139.7		2.4	%	$	273.0		$	267.9		1.9	%
Involuntary and other property & casualty		1.2			1.0		20.0	%		2.5			1.9		31.6	%
Total Property & Casualty		144.3			140.7		2.6	%		275.5			269.8		2.1	%
Annuity deposits		85.9			98.9		-13.1	%		170.1			167.6		1.5	%
Life		24.6			25.1		-2.0	%		47.9			48.6		-1.4	%
Total	$	254.8		$	264.7		-3.7	%	$	493.5		$	486.0		1.5	%
ANALYSIS OF SEGMENT NET INCOME (LOSS)
Property & Casualty	$	8.5		$	3.6		136.1	%	$	19.5		$	16.0		21.9	%
Annuity		6.9			6.3		9.5	%		14.2			7.5		89.3	%
Life		5.5			5.0		10.0	%		10.1			8.4		20.2	%
Corporate and other (A)		2.1			3.7		-43.2	%		1.8			0.1		N.M.
Net income		23.0			18.6		23.7	%		45.6			32.0		42.5	%
Catastrophe costs, after tax, included above (B)		(10.6	)		(9.8	)	8.2	%		(15.0	)		(12.7	)	18.1	%

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,						% Change		Six Months Ended June  30,						% Change
	2010			2009					2010			2009
PROPERTY & CASUALTY
Premiums written	$	144.3		$	140.7		2.6	%	$	275.5		$	269.8		2.1	%
Premiums earned		138.8			135.8		2.2	%		276.5			270.8		2.1	%
Net investment income		9.0			8.5		5.9	%		17.9			16.8		6.5	%
Other income		0.3			0.6		-50.0	%		0.3			2.0		-85.0	%
Losses and loss adjustment expenses (LAE)		103.5			106.7		-3.0	%		201.9			200.3		0.8	%
Operating expenses (includes policy acquisition expenses amortized)		34.0			34.2		-0.6	%		68.3			68.4		-0.1	%
Income before tax		10.6			4.0		165.0	%		24.5			20.9		17.2	%
Net income		8.5			3.6		136.1	%		19.5			16.0		21.9	%
Net investment income, after tax		7.8			7.2		8.3	%		15.4			14.2		8.5	%
Catastrophe costs, after tax (A)		10.6			9.8		8.2	%		15.0			12.7		18.1	%
Catastrophe losses and LAE, before tax		16.2			15.1		7.3	%		23.0			19.6		17.3	%
Reinsurance reinstatement premiums, before tax		-			-		-			-			-		-
Operating statistics:
Loss and loss adjustment expense ratio		74.5	%		78.5	%	N.	M.		73.0	%		73.9	%	N.	M.
Expense ratio		24.5	%		25.3	%	N.	M.		24.7	%		25.3	%	N.	M.
Combined ratio		99.0	%		103.8	%	N.	M.		97.7	%		99.2	%	N.	M.
Effect on the combined ratio of:
Catastrophe costs		11.6	%		11.1	%	N.	M.		8.3	%		7.2	%	N.	M.
Claims office consolidation costs (all in LAE)		-			0.2	%	N.	M.		-			1.2	%	N.	M.
Automobile and property detail:
Premiums written (voluntary) (B)	$	143.1		$	139.7		2.4	%	$	273.0		$	267.9		1.9	%
Automobile		92.7			91.7		1.1	%		186.0			184.6		0.8	%
Property		50.4			48.0		5.0	%		87.0			83.3		4.4	%
Premiums earned (voluntary) (B)		138.2			135.3		2.1	%		275.0			269.7		2.0	%
Automobile		93.5			92.3		1.3	%		186.1			184.0		1.1	%
Property		44.7			43.0		4.0	%		88.9			85.7		3.7	%
Policies in force (voluntary) (in thousands)										781			793		-1.5	%
Automobile										522			531		-1.7	%
Property										259			262		-1.1	%
Policy renewal rate (voluntary)
Automobile (6 months)										91.4	%		91.5	%	N.	M.
Property (12 months)										88.7	%		89.3	%	N.	M.
Voluntary automobile operating statistics:
Loss and loss adjustment expense ratio		63.7	%		69.3	%	N.	M.		67.0	%		69.9	%	N.	M.
Expense ratio		24.5	%		25.2	%	N.	M.		24.7	%		25.5	%	N.	M.
Combined ratio		88.2	%		94.5	%	N.	M.		91.7	%		95.4	%	N.	M.
Effect on the combined ratio of:
Catastrophe costs		1.5	%		0.9	%	N.	M.		0.8	%		0.7	%	N.	M.
Claims office consolidation costs (all in LAE)		-			0.2	%	N.	M.		-			1.5	%	N.	M.
Total property operating statistics:
Loss and loss adjustment expense ratio		96.6	%		98.5	%	N.	M.		85.2	%		82.7	%	N.	M.
Expense ratio		24.8	%		25.3	%	N.	M.		25.0	%		24.8	%	N.	M.
Combined ratio		121.4	%		123.8	%	N.	M.		110.2	%		107.5	%	N.	M.
Effect on the combined ratio of:
Catastrophe costs		33.4	%		33.6	%	N.	M.		24.5	%		21.6	%	N.	M.
Claims office consolidation costs (all in LAE)		-			0.2	%	N.	M.		-			0.8	%	N.	M.
Prior years’ reserves favorable (adverse) development, pretax
Voluntary automobile	$	2.8		$	2.5		12.0	%	$	5.5		$	5.0		10.0	%
Total property		-			(0.4	)	-100.0	%		1.8			-		N.	M.
Other property and casualty		-			-		-			-			0.5		-100.0	%
Total		2.8			2.1		33.3	%		7.3			5.5		32.7	%

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,						% Change		Six Months Ended June 30,						% Change
	2010			2009					2010			2009
ANNUITY
Contract deposits	$	85.9		$	98.9		-13.1	%	$	170.1		$	167.6		1.5	%
Variable		28.4			29.8		-4.7	%		55.8			56.0		-0.4	%
Fixed		57.5			69.1		-16.8	%		114.3			111.6		2.4	%
Contract charges earned		4.5			3.4		32.4	%		8.8			6.6		33.3	%
Net investment income		42.7			37.0		15.4	%		83.1			71.8		15.7	%
Net interest margin (without realized investment gains and losses)		16.6			12.4		33.9	%		31.4			23.2		35.3	%
Other income		1.1			0.6		83.3	%		2.0			1.4		42.9	%
Mortality loss and other reserve changes		(0.6	)		0.9		N.	M.		(0.9	)		0.3		N.	M.
Operating expenses (includes policy acquisition expenses amortized)		13.6			8.0		70.0	%		22.2			20.5		8.3	%
Income before tax		8.0			9.3		-14.0	%		19.1			11.0		73.6	%
Net income		6.9			6.3		9.5	%		14.2			7.5		89.3	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	(4.0	)	$	1.3		N.	M.	$	(2.8	)	$	(1.7	)	64.7	%
Guaranteed minimum death benefit reserve		(0.2	)		0.7		N.	M.		(0.1	)		0.2		N.	M.
Annuity contracts in force (in thousands)										178			177		0.6	%
Accumulated value on deposit									$	3,777.3		$	3,401.1		11.1	%
Variable										1,199.5			1,012.5		18.5	%
Fixed										2,577.8			2,388.6		7.9	%
Annuity accumulated value retention - 12 months
Variable accumulations										93.3	%		93.4	%	N.	M.
Fixed accumulations										94.5	%		94.1	%	N.	M.
LIFE
Premiums and contract deposits	$	24.6		$	25.1		-2.0	%	$	47.9		$	48.6		-1.4	%
Premiums and contract charges earned		25.1			24.3		3.3	%		49.5			48.6		1.9	%
Net investment income		17.6			15.8		11.4	%		34.5			30.8		12.0	%
Income before tax		8.6			7.9		8.9	%		15.7			13.3		18.0	%
Net income		5.5			5.0		10.0	%		10.1			8.4		20.2	%
Pretax income increase (decrease) due to valuation of:
Deferred policy acquisition costs	$	-		$	-		-		$	(0.1	)	$	(0.1	)	-
Life policies in force (in thousands)										210			219		-4.1	%
Life insurance in force									$	13,811		$	13,680		1.0	%
Lapse ratio-12 months
(Ordinary life insurance)										5.1	%		5.5	%	N.	M.
CORPORATE AND OTHER (A)
Components of income (loss) before tax:
Net realized investment gains	$	8.3		$	11.0		-24.5	%	$	13.2		$	10.2		29.4	%
Interest expense		(3.5	)		(3.5	)	-			(7.0	)		(7.0	)	-
Other operating expenses, net investment income and other income		(1.3	)		(1.6	)	-18.8	%		(2.9	)		(2.7	)	7.4	%
Income before tax		3.5			5.9		-40.7	%		3.3			0.5		N.	M.
Net income		2.1			3.7		-43.2	%		1.8			0.1		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 June 30,				% Change		Six Months Ended June 30,					% Change
	2010		2009				2010		2009
INVESTMENTS
Annuity and Life
Fixed maturities, at fair value (amortized cost 2010, $3,514.9; 2009, $3,105.7)							$	3,710.2	$	2,953.7		25.6	%
Equity securities, at fair value (cost 2010, $29.8; 2009, $46.3)								27.9		36.6		-23.8	%
Short-term investments								176.8		341.9		-48.3	%
Short-term investments, securities lending collateral								-		-		-
Policy loans and other								117.5		111.7		5.2	%
Total Annuity and Life investments								4,032.4		3,443.9		17.1	%
Property & Casualty
Fixed maturities, at fair value (amortized cost 2010, $756.7; 2009, $705.4)								783.7		698.7		12.2	%
Equity securities, at fair value (cost 2010, $18.0; 2009, $20.0)								20.4		17.1		19.3	%
Short-term investments								13.6		18.1		-24.9	%
Short-term investments, securities lending collateral								-		-		-
Total Property & Casualty investments								817.7		733.9		11.4	%
Corporate investments								23.9		29.1		-17.9	%
Total investments								4,874.0		4,206.9		15.9	%
Net investment income
Before tax	$	69.1	$	61.0	13.3	%	$	135.0	$	118.9		13.5	%
After tax		46.8		41.5	12.8	%		91.5		80.6		13.5	%
Net realized investment gains (losses) by investment portfolio included in Corporate and Other segment loss
Property & Casualty	$	1.3	$	2.3	-43.5	%	$	3.7	$	(5.9	)	N.	M.
Annuity		6.7		7.3	-8.2	%		8.5		11.4		-25.4	%
Life		0.1		1.4	-92.9	%		0.8		4.7		-83.0	%
Corporate and Other		0.2		-	N.	M.		0.2		-		N.	M.
Total, before tax		8.3		11.0	-24.5	%		13.2		10.2		29.4	%
Total, after tax		5.5		7.2	-23.6	%		8.6		6.6		30.3	%
Per share, diluted	$	0.13	$	0.18	-27.8	%	$	0.21	$	0.16		31.3	%

N.M. - Not meaningful.

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HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview (Unaudited)

(Dollars in Millions)

	June 30, 2010					March 31, 2010			December 31, 2009			September 30, 2009			June 30, 2009
	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	$	452.0	$	11.4		$	(10.0	)	$	(13.8	)	$	2.0		$	(2.5	)
Municipal bonds		957.7		46.5			28.9			22.8			56.1			6.3
Corporate bonds
Financial institutions		270.1		14.0			14.1			8.1			6.9			(11.0	)
Other		1,398.7		127.6			88.7			73.0			84.6			(14.3	)
High yield		191.2		(2.4	)		(1.8	)		(5.9	)		(11.8	)		(26.4	)
Foreign government bonds		33.3		1.4			2.8			2.0			3.0			0.7
Mortgage-backed securities
Prime agency		493.4		35.1			17.6			18.3			23.9			18.5
Prime other		16.0		0.6			0.3			0.4			0.5			(0.8	)
Sub-prime, Alt-A		0.5		(0.1	)		(0.1	)		(0.1	)		(0.4	)		(0.8	)
Commercial mortgage-backed securities		262.1		(23.9	)		(51.5	)		(67.5	)		(71.7	)		(106.6	)
Asset-backed securities
Sub-prime, Alt-A		0.3		-			-			-			(0.5	)		(0.3	)
Collateralized debt obligations, collateralized loan obligations		32.7		(1.6	)		(1.9	)		(4.1	)		(3.3	)		(4.0	)
Other		311.3		15.0			12.0			8.2			4.5			(4.8	)
Preferred stocks
Financial institutions		78.3		(3.4	)		(1.3	)		(6.4	)		(9.5	)		(19.7	)
Other		42.9		1.6			2.8			0.3			(0.7	)		(6.1	)
Total fixed income securities		4,540.5		221.8			100.6			35.3			83.6			(171.8	)
Common stocks		1.7		1.0			1.1			0.8			0.5			0.5
Derivatives		-		-			-			-			-			-
Total fixed maturity and equity security investments	$	4,542.2	$	222.8		$	101.7		$	36.1		$	84.1		$	(171.3	)

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