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 7, 2011

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, 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 February 7, 2011, Horace Mann Educators Corporation issued a press release reporting its financial results for the three and twelve month periods ended December 31, 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 February 7, 2011 reporting financial results for the three and twelve month periods ended December 31, 2010.

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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 7, 2011

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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 independent contractor may sign multiple Exclusive Agent agreements with the Company and manage more than one Exclusive Agency.

— 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.

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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 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. Management believes that a projection of net income including after tax realized investment gains and losses is not appropriate on a forward-looking basis because it is not possible to provide a valid 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:

Todd Nelson, Vice President – Finance

217-788-5738

HORACE MANN REPORTS RESULTS

FOR FOURTH QUARTER

SPRINGFIELD, Ill., February 7, 2011 — Horace Mann Educators Corporation (NYSE:HMN) today reported net income of $15.2 million (36 cents per share) and $80.9 million ($1.97 per share) for the three and twelve months ended December 31, 2010, compared to $22.2 million (54 cents per share) and $73.5 million ($1.81 per share) for the same periods in 2009. Included in net income were net realized losses on securities of $1.5 million ($0.9 million after tax, or 3 cents per share) for the fourth quarter of 2010 and realized gains of $23.8 million ($15.4 million after tax, or 37 cents per share) for the full year. In the same periods in 2009, net income included net realized investment gains 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), respectively. All per-share amounts are stated on a diluted basis.

“Horace Mann’s increased net unrealized investment gain position compared to a year ago, coupled with strong underlying operating results in our auto, annuity and life lines of business in 2010, resulted in a year-end reported book value per share of $22.19, an increase of 21 percent over the last twelve months,” said Peter H. Heckman, President and Chief Executive Officer. “Net income before realized investment gains and losses was 39 cents per share for the fourth quarter, an 8 cent decrease compared to a year ago, as unfavorable results in the property line more than offset improved earnings in auto and annuity,” continued Heckman. “Primarily due to a significant level of catastrophe losses, as well as an increase in Florida sinkhole claims, our property and casualty earnings decreased compared to the fourth quarter of the prior year. The accident year combined ratio excluding catastrophes was 99.7 percent in the current quarter, which was 2.6 percentage points higher than the same period last year and reflected increases in both the property and auto lines. Our overall results reflected the benefits of Horace Mann’s multiline business model, as net income from our combined annuity and life segments increased notably in the fourth quarter compared to prior year.” As previously disclosed, the company’s fourth quarter 2010 expenses included approximately $1.8 million pretax, or 3 cents per share, related to the accelerated accrual of certain pension benefits, incentive compensation and other stock-based awards earned by the previous CEO who retired in the quarter.

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“As mentioned earlier, Horace Mann delivered strong underlying operating results for the full year. Net income before realized investment gains and losses of $1.60 per share increased 15 percent compared to 2009,” said Heckman. “As we expected, earnings from our annuity and life segments reflected significant improvement as they benefitted from increases in interest margins. The property and casualty segment combined ratio of 100.9 percent increased only 1.4 percentage points compared to the prior year, as favorable auto results partially offset the impact of notably higher property catastrophe and sinkhole losses. For the full year, the 95.8 percent accident year combined ratio excluding catastrophes was comparable to 2009.”

“Looking forward to 2011, we estimate full-year net income before realized investment gains and losses of between $1.75 and $1.95 per share,” Heckman said. “This projection builds on our solid results in 2010 and anticipates an improvement of approximately 3 points in our property and casualty combined ratio driven by the property line, with catastrophe losses returning to historical levels and a significant reduction in Florida sinkhole losses, partially offset by a reduced amount of favorable development of prior years’ auto reserves. We expect that our combined annuity and life earnings will be comparable to the strong levels delivered in 2010, including the assumption of an 8 to 10 percent increase in the S&P 500 Index.”

Segment Earnings

The property and casualty segment recorded net income of $6.0 million for the quarter, a decrease of $4.2 million compared to the same period in 2009. Pretax catastrophe costs in the current quarter of $8.7 million increased $7.5 million compared to the minimal $1.2 million incurred in the fourth quarter of 2009. The fourth quarter 2010 property and casualty combined ratio was 101.7 percent, including 6.3 percentage points due to catastrophe costs, compared to 95.6 percent, including 0.9 percentage points due to catastrophe costs, in the prior year period. Favorable prior years’ reserve development totaling $5.9 million was recorded in the fourth quarter, which represented 4.2 percentage points on the combined ratio, compared to $3.4 million, or 2.4 percentage points on the combined ratio, recorded in the fourth quarter of 2009. Excluding claim settlement expenses, Florida sinkhole losses incurred in the current quarter and for the full year of $5.2 million and $20.1 million, respectively, exceeded the $4.2 million and $12.0 million incurred in the three and twelve months ended December 31, 2009. The higher level of sinkhole losses increased the 2010 property loss ratio approximately 2 percentage points for the quarter and 4 percentage points for the full year, compared to 2009. For the total property and casualty segment, the higher sinkhole losses increased the combined ratio approximately 1 percentage point for both the quarter and full year. “Throughout 2010, the elevated level of catastrophe and sinkhole losses was a challenge to our property and casualty earnings. One of the key initiatives to address this — our Florida risk mitigation plan, which

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is primarily focused on non-renewals — remains ahead of schedule,” said Heckman. For the full year, the property and casualty combined ratio was 100.9 percent for 2010, compared to 99.5 percent for the prior year, and net income was $27.0 million, compared to $30.0 million for full year 2009.

Annuity segment net income was $8.9 million and $31.6 million for the three and twelve months ended December 31, 2010, increasing $2.5 million and $10.4 million, respectively, compared to the same periods in 2009. The current quarter included a reduction in amortization as a result of the evaluation of deferred policy acquisition costs of $3.3 million compared to a reduction of $0.5 million due to the evaluation in the prior year. The interest margin earned on fixed annuity assets increased 6 percent and 24 percent compared to the three and twelve months ended December 31, 2009, with full year net interest spreads of 1.96 percent for the current year improving 27 basis points compared to 2009. Charges and fees earned in the quarter, primarily on variable annuity contracts, increased slightly 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 year-end 2009. Total cash value persistency of 94 percent was comparable to a year earlier.

Life segment net income of $4.5 million for the fourth quarter decreased $1.0 million compared to the same period in 2009, primarily due to higher mortality costs in the current period. For the full year, net income of $20.2 million increased $1.8 million compared to 2009, as growth in investment income more than offset higher mortality costs. Life persistency remained strong at 95 percent.

Segment Revenues

Compared to 2009, the company’s total premiums written and contract deposits increased 9 percent and 5 percent for the quarter and full year, respectively, driven by the increase in annuity deposit receipts.

Total property and casualty premiums written decreased 1 percent compared to the fourth quarter of 2009 and increased 1 percent for the full year. Each of these changes included increases in average property and auto premiums per policy, as well as reductions in policies in force.

Building on the growth from the last quarter, annuity deposits received increased 31 percent compared to the fourth quarter of 2009, reflecting single deposit and rollover receipts that more than doubled compared to the prior year and scheduled, flexible premium annuity deposit receipts that decreased 8 percent compared to a year ago. For the full year, total annuity deposit receipts increased 13 percent compared to 2009, also driven by growth in single deposit and rollover receipts which more than offset the 1 percent decrease in flexible

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annuity deposit receipts. Life segment insurance premiums and contract deposits decreased approximately 1 percent compared to both the three and twelve months of the prior year.

Sales and Distribution

For the three and twelve months ended December 31, 2010, total new auto sales units decreased 14 percent and 8 percent, respectively, compared to the same periods in 2009, primarily reflecting decreases in true new auto sales of 21 percent and 10 percent, respectively. Driven by increases in single premium and rollover deposits, total annuity sales increased 65 percent in the fourth quarter and 15 percent for the full year, which was on top of the 31 percent growth in the twelve months ended December 31, 2009. Total new life production decreased 4 percent and 8 percent compared to the prior year quarter and full year, primarily due to decreases in sales of third-party vendor products.

At December 31, 2010, there was a combined total of 741 Exclusive Agencies and Employee Agents, compared to 716 at December 31, 2009 and 670 at December 31, 2008. “The size of our distribution force increased again during the quarter, resulting in a second consecutive year of growth in the total number of agencies and agents,” said Heckman. “The transformation of our agency force is also continuing, with approximately 80 percent of the agencies operating in our Agency Business Model — with an outside office and one or more licensed producers — and over 60 percent operating under our Exclusive Agent agreement at December 31, 2010.”

Investment Gains and Losses

In the fourth quarter of 2010, pretax net realized investment losses were $1.5 million. The company realized $14.7 million of gross gains on sales of securities during the quarter, more than offset by $15.2 million of realized losses on security disposals, primarily related to commercial mortgage-backed securities risk reduction actions, and $1.0 million of credit-related impairment write-downs on securities.

Horace Mann’s net unrealized investment gains on fixed maturity and equity securities of $185.6 million at December 31, 2010 improved significantly compared to the net unrealized gains of $36.1 million at December 31, 2009 but moderated compared to the September 30, 2010 level, primarily reflecting the increase in interest rates during the fourth quarter.

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.

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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, 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 December 31,									Year Ended December 31,
	2010			2009			% Change			2010			2009			% Change
DIGEST OF EARNINGS
Net income	$	15.2		$	22.2			-31.5	%	$	80.9		$	73.5			10.1	%
Net income per share:
Basic	$	0.38		$	0.57			-33.3	%	$	2.05		$	1.88			9.0	%
Diluted	$	0.36		$	0.54			-33.3	%	$	1.97		$	1.81			8.8	%
Weighted average number of shares and equivalent shares (in millions)
Basic		39.5			39.2			0.8	%		39.3			39.2			0.3	%
Diluted		41.3			40.6			1.7	%		41.0			40.5			1.2	%
HIGHLIGHTS
Operations
Insurance premiums written and contract deposits	$	269.2		$	246.0			9.4	%	$	1,052.0		$	1,003.7			4.8	%
Return on equity (A)											9.6	%		12.7	%		N.M.
Property & Casualty GAAP combined ratio		101.7	%		95.6	%		N.M.			100.9	%		99.5	%		N.M.
Effect of catastrophe costs on the Property & Casualty combined ratio		6.3	%		0.9	%		N.M.			8.8	%		6.1	%		N.M.
Exclusive agencies (B)											457			250			82.8	%
Employee agents (C)											284			466			-39.1	%
Total											741			716			3.5	%
Additional Per Share Information
Dividends paid	$	0.11		$	0.08			37.5	%	$	0.35		$	0.2375			47.4	%
Book value (D)										$	22.19		$	18.36			20.9	%
Financial Position
Total assets										$	7,005.5		$	6,343.1			10.4	%
Short-term debt											38.0			38.0			-
Long-term debt											199.7			199.6			0.1	%
Total shareholders’ equity											880.0			719.5			22.3	%

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”). Those agreements state that only the Company’s products and limited additional third-party vendor products authorized by the Company will be marketed by the agencies. An independent contractor may sign multiple Exclusive Agent agreements with the Company and manage more than one Exclusive Agency.

(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 $19.42 at December 31, 2010 and $17.79 at December 31, 2009. Ending shares outstanding were 39,655,952 at December 31, 2010 and 39,184,721 at December 31, 2009.

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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,
	2010			2009			% Change			2010			2009			% Change
STATEMENTS OF OPERATIONS
Insurance premiums and contract charges earned	$	169.9		$	167.8			1.3	%	$	672.7		$	659.6			2.0	%
Net investment income		68.8			65.4			5.2	%		272.1			246.8			10.3	%
Net realized investment gains (losses)		(1.5	)		4.6			N.M.			23.8			26.3			-9.5	%
Other income (expense) (A)		0.9			(1.9	)		N.M.			6.2			4.7			31.9	%
Total revenues		238.1			235.9			0.9	%		974.8			937.4			4.0	%
Benefits, claims and settlement expenses		118.6			110.1			7.7	%		474.8			458.7			3.5	%
Interest credited		37.8			35.9			5.3	%		146.7			139.4			5.2	%
Policy acquisition expenses amortized		19.0			20.2			-5.9	%		85.1			80.4			5.8	%
Operating expenses		38.7			35.6			8.7	%		142.9			141.2			1.2	%
Amortization of intangible assets		-			-			-			-			0.2			-100.0	%
Interest expense		3.6			3.5			2.9	%		14.0			14.0			-
Total benefits, losses and expenses		217.7			205.3			6.0	%		863.5			833.9			3.5	%
Income before income taxes		20.4			30.6			-33.3	%		111.3			103.5			7.5	%
Income tax expense		5.2			8.4			-38.1	%		30.4			30.0			1.3	%
Net income	$	15.2		$	22.2			-31.5	%	$	80.9		$	73.5			10.1	%
ANALYSIS OF PREMIUMS WRITTEN AND CONTRACT DEPOSITS
Property & Casualty
Automobile and property (voluntary)	$	134.2		$	136.0			-1.3	%	$	553.2		$	550.2			0.5	%
Involuntary and other property & casualty		0.8			0.8			-			3.9			3.3			18.2	%
Total Property & Casualty		135.0			136.8			-1.3	%		557.1			553.5			0.7	%
Annuity deposits		106.8			81.7			30.7	%		395.5			349.8			13.1	%
Life		27.4			27.5			-0.4	%		99.4			100.4			-1.0	%
Total	$	269.2		$	246.0			9.4	%	$	1,052.0		$	1,003.7			4.8	%
ANALYSIS OF SEGMENT NET INCOME (LOSS)
Property & Casualty	$	6.0		$	10.2			-41.2	%	$	27.0		$	30.0			-10.0	%
Annuity		8.9			6.4			39.1	%		31.6			21.2			49.1	%
Life		4.5			5.5			-18.2	%		20.2			18.4			9.8	%
Corporate and other (B)		(4.2	)		0.1			N.M.			2.1			3.9			-46.2	%
Net income		15.2			22.2			-31.5	%		80.9			73.5			10.1	%
Catastrophe costs, after tax, included above (C)		(5.7	)		(0.8	)		N.M.			(32.0	)		(21.5	)		48.8	%

N.M. - Not meaningful.

(A) The three and twelve months ended December 31, 2009 included 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 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,
	2010			2009			% Change			2010			2009			% Change
PROPERTY & CASUALTY
Premiums written	$	135.0		$	136.8			-1.3	%	$	557.1		$	553.5			0.7	%
Premiums earned		140.0			138.9			0.8	%		555.8			547.3			1.6	%
Net investment income		9.4			8.8			6.8	%		36.5			34.4			6.1	%
Other income (expense) (A)		(0.1	)		(3.6	)		-97.2	%		0.3			(1.3	)		N.M.
Losses and loss adjustment expenses (LAE)		104.3			97.9			6.5	%		418.2			407.1			2.7	%
Operating expenses (includes policy acquisition expenses amortized)		37.9			34.8			8.9	%		143.1			137.6			4.0	%
Income before tax		7.1			11.4			-37.7	%		31.3			35.7			-12.3	%
Net income		6.0			10.2			-41.2	%		27.0			30.0			-10.0	%
Net investment income, after tax		7.9			7.7			2.6	%		31.2			29.5			5.8	%
Catastrophe costs, after tax (B)		5.7			0.8			N.M.			32.0			21.5			48.8	%
Catastrophe losses and LAE, before tax		8.7			1.2			N.M.			49.2			33.1			48.6	%
Reinsurance reinstatement premiums, before tax		-			-			-			-			-			-
Operating statistics:
Loss and loss adjustment expense ratio		74.6	%		70.5	%		N.M.			75.2	%		74.4	%		N.M.
Expense ratio		27.1	%		25.1	%		N.M.			25.7	%		25.1	%		N.M.
Combined ratio		101.7	%		95.6	%		N.M.			100.9	%		99.5	%		N.M.
Effect on the combined ratio of:
Catastrophe costs		6.3	%		0.9	%		N.M.			8.8	%		6.1	%		N.M.
Write-off software development costs (operating expense)		-			-			N.M.			0.4	%		-			N.M.
Claims office consolidation costs (all in LAE)		-			0.1	%		N.M.			-			0.7	%		N.M.
Automobile and property detail:
Premiums written (voluntary) (C)	$	134.2		$	136.0			-1.3	%	$	553.2		$	550.2			0.5	%
Automobile		92.9			93.2			-0.3	%		372.8			372.5			0.1	%
Property		41.3			42.8			-3.5	%		180.4			177.7			1.5	%
Premiums earned (voluntary) (C)		138.1			137.3			0.6	%		551.8			544.1			1.4	%
Automobile		93.1			93.0			0.1	%		372.2			369.8			0.6	%
Property		45.0			44.3			1.6	%		179.6			174.3			3.0	%
Policies in force (voluntary) (in thousands)											760			790			-3.8	%
Automobile											508			528			-3.8	%
Property											252			262			-3.8	%
Policy renewal rate (voluntary)
Automobile (6 months)											90.5	%		91.3	%		N.M.
Property (12 months)											86.7	%		88.8	%		N.M.
Voluntary automobile operating statistics:
Loss and loss adjustment expense ratio		73.4	%		76.6	%		N.M.			68.5	%		72.4	%		N.M.
Expense ratio		26.4	%		24.4	%		N.M.			25.2	%		25.1	%		N.M.
Combined ratio		99.8	%		101.0	%		N.M.			93.7	%		97.5	%		N.M.
Effect on the combined ratio of:
Catastrophe costs		0.7	%		0.2	%		N.M.			1.0	%		0.8	%		N.M.
Claims office consolidation costs (all in LAE)		-			0.1	%		N.M.			-			0.8	%		N.M.
Total property operating statistics:
Loss and loss adjustment expense ratio		76.8	%		57.6	%		N.M.			89.0	%		78.6	%		N.M.
Expense ratio		29.0	%		25.8	%		N.M.			27.1	%		24.9	%		N.M.
Combined ratio		105.8	%		83.4	%		N.M.			116.1	%		103.5	%		N.M.
Effect on the combined ratio of:
Catastrophe costs		17.6	%		2.4	%		N.M.			25.4	%		17.6	%		N.M.
Write-off software development costs (operating expense)		-			-			N.M.			1.3	%		-			N.M.
Claims office consolidation costs (all in LAE)		-			0.1	%		N.M.			-			0.4	%		N.M.
Prior years’ reserves favorable (adverse) development, pretax
Voluntary automobile	$	5.7		$	2.5			128.0	%	$	16.4		$	9.2			78.3	%
Total property		0.2			0.9			-77.8	%		4.1			1.8			127.8	%
Other property and casualty		-			-			-			-			0.7			-100.0	%
Total		5.9			3.4			73.5	%		20.5			11.7			75.2	%

N.M. - Not meaningful.

(A) The three and twelve months ended December 31, 2009 included 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 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,
	2010			2009			% Change			2010			2009			% Change
ANNUITY
Contract deposits	$	106.8		$	81.7			30.7	%	$	395.5		$	349.8			13.1	%
Variable		28.4			29.7			-4.4	%		110.2			112.2			-1.8	%
Fixed		78.4			52.0			50.8	%		285.3			237.6			20.1	%
Contract charges earned		4.4			4.3			2.3	%		17.4			14.5			20.0	%
Net investment income		42.7			40.1			6.5	%		167.9			149.7			12.2	%
Net interest margin (without realized investment gains and losses)		15.1			14.2			6.3	%		61.6			49.7			23.9	%
Other income		0.3			0.9			-66.7	%		3.2			3.1			3.2	%
Mortality loss and other reserve changes		(0.1	)		(0.2	)		-50.0	%		(1.3	)		0.5			N.M.
Operating expenses (includes policy acquisition expenses amortized)		6.8			8.8			-22.7	%		36.3			35.5			2.3	%
Income before tax		12.9			10.4			24.0	%		44.6			32.3			38.1	%
Net income		8.9			6.4			39.1	%		31.6			21.2			49.1	%
Pretax income increase (decrease) due to evaluation of:
Deferred policy acquisition costs	$	3.3		$	0.5			N.M.		$	2.4		$	1.3			84.6	%
Guaranteed minimum death benefit reserve		0.2			0.1			100.0	%		0.2			0.8			-75.0	%
Annuity contracts in force (in thousands)											180			178			1.1	%
Accumulated value on deposit										$	4,106.1		$	3,713.6			10.6	%
Variable											1,375.7			1,226.4			12.2	%
Fixed											2,730.4			2,487.2			9.8	%
Annuity accumulated value retention - 12 months
Variable accumulations											92.6	%		93.4	%		N.M.
Fixed accumulations											94.4	%		94.4	%		N.M.
LIFE
Premiums and contract deposits	$	27.4		$	27.5			-0.4	%	$	99.4		$	100.4			-1.0	%
Premiums and contract charges earned		25.5			24.6			3.7	%		99.5			97.8			1.7	%
Net investment income		16.9			16.8			0.6	%		68.7			63.8			7.7	%
Income before tax		6.5			8.7			-25.3	%		31.1			28.9			7.6	%
Net income		4.5			5.5			-18.2	%		20.2			18.4			9.8	%
Pretax income increase (decrease) due to evaluation of:
Deferred policy acquisition costs	$	(0.1	)	$	(0.7	)		-85.7	%	$	(0.5	)	$	(0.9	)		-44.4	%
Life policies in force (in thousands)											208			213			-2.3	%
Life insurance in force										$	13,940		$	13,761			1.3	%
Lapse ratio - 12 months
(Ordinary life insurance)											4.8	%		5.4	%		N.M.
CORPORATE AND OTHER (A)
Components of income (loss) before tax:
Net realized investment gains (losses)	$	(1.5	)	$	4.6			N.M.		$	23.8		$	26.3			-9.5	%
Interest expense		(3.6	)		(3.5	)		2.9	%		(14.0	)		(14.0	)		-
Other operating expenses, net investment income and other income		(1.0	)		(1.0	)		-			(5.5	)		(5.7	)		-3.5	%
Income (loss) before tax		(6.1	)		0.1			N.M.			4.3			6.6			-34.8	%
Net income (loss)		(4.2	)		0.1			N.M.			2.1			3.9			-46.2	%

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,
	2010			2009			% Change			2010		2009			% Change
INVESTMENTS
Annuity and Life
Fixed maturities, at fair value (amortized cost 2010, $3,756.8; 2009, $3,341.1)										$	3,929.4	$	3,358.9			17.0	%
Equity securities, at fair value (cost 2010, $6.5; 2009, $43.2)											7.3		40.6			-82.0	%
Short-term investments											166.5		252.6			-34.1	%
Short-term investments, securities lending collateral											-		-			-
Policy loans and other											122.1		116.0			5.3	%
Total Annuity and Life investments											4,225.3		3,768.1			12.1	%
Property & Casualty
Fixed maturities, at fair value (amortized cost 2010, $776.4; 2009, $720.9)											786.1		741.0			6.1	%
Equity securities, at fair value (cost 2010, $14.3; 2009, $18.3)											16.8		19.1			-12.0	%
Short-term investments											22.6		25.4			-11.0	%
Short-term investments, securities lending collateral											-		-			-
Total Property & Casualty investments											825.5		785.5			5.1	%
Corporate investments											22.8		21.0			8.6	%
Total investments											5,073.6		4,574.6			10.9	%
Net investment income
Before tax	$	68.8		$	65.4			5.2	%	$	272.1	$	246.8			10.3	%
After tax		46.5			44.4			4.7	%		184.3		167.5			10.0	%
Net realized investment gains (losses) by investment portfolio included in the Corporate and Other segment income (loss)
Property & Casualty	$	1.6		$	-			N.M.		$	6.5	$	(2.5	)		N.M.
Annuity		(4.7	)		5.7			N.M.			11.1		22.0			-49.5	%
Life		1.6			(1.1	)		N.M.			6.0		6.8			-11.8	%
Corporate and Other		-			-			-			0.2		-			N.M.
Total, before tax		(1.5	)		4.6			N.M.			23.8		26.3			-9.5	%
Total, after tax		(0.9	)		3.2			N.M.			15.4		17.2			-10.5	%
Per share, diluted	$	(0.03	)	$	0.07			N.M.		$	0.37	$	0.42			-11.9	%

N.M. - Not meaningful.

-5-

HORACE MANN EDUCATORS CORPORATION

Supplemental Business Segment Overview (Unaudited)

(Dollars in Millions)

	December 31, 2010					September 30, 2010			June 30, 2010			March 31, 2010			December 31, 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	$	497.5	$	(15.2	)	$	27.0		$	11.4		$	(10.0	)	$	(13.8	)
Municipal bonds		1,088.7		8.4			72.7			46.5			28.9			22.8
Corporate bonds
Financial institutions		339.0		18.3			26.9			14.0			14.1			8.1
Other		1,382.5		116.5			168.6			127.6			88.7			73.0
High yield		194.6		5.7			6.1			(2.4	)		(1.8	)		(5.9	)
Foreign government bonds		45.5		2.6			4.1			1.4			2.8			2.0
Mortgage-backed securities
Prime agency		468.0		25.1			37.2			35.1			17.6			18.3
Prime other		15.8		1.0			1.1			0.6			0.3			0.4
Sub-prime, Alt-A		0.2		-			-			(0.1	)		(0.1	)		(0.1	)
Commercial mortgage-backed securities		282.0		(0.6	)		(11.2	)		(23.9	)		(51.5	)		(67.5	)
Asset-backed securities
Sub-prime, Alt-A		0.1		-			-			-			-			-
Collateralized debt obligations, collateralized loan obligations		33.6		1.1			1.0			(1.6	)		(1.9	)		(4.1	)
Other		351.4		17.6			20.8			15.0			12.0			8.2
Preferred stocks
Financial institutions		9.2		1.9			0.5			(3.4	)		(1.3	)		(6.4	)
Other		31.1		2.8			4.7			1.6			2.8			0.3
Total fixed income securities		4,739.2		185.2			359.5			221.8			100.6			35.3
Common stocks		0.4		0.4			1.0			1.0			1.1			0.8
Derivatives		-		-			-			-			-			-
Total fixed maturity and equity security investments	$	4,739.6	$	185.6		$	360.5		$	222.8		$	101.7		$	36.1

-6-