10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q 

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

or

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 1-10890

HORACE MANN EDUCATORS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	37-0911756
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1 Horace Mann Plaza, Springfield, Illinois      62715-0001

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: 217-789-2500

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	HMN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.). Yes ☐ No ☑

As of July 31, 2021, the registrant had 41,487,113 common shares, $0.001 par value, outstanding.

HORACE MANN EDUCATORS CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		Page
Item 1.	Consolidated Financial Statements
	Report of Independent Registered Public Accounting Firm	1
	Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and December, 31 2020	2
	Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2021 and 2020 (Unaudited)	3
	Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020 (Unaudited)	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (Unaudited)	5
	Notes to Consolidated Financial Statements (Unaudited)
	Note 1 - Basis of Presentation and Significant Accounting Policies	6
	Note 2 - Investments	8
	Note 3 - Fair Value of Financial Instruments	13
	Note 4 - Deposit Asset on Reinsurance	19
	Note 5 - Goodwill and Intangible Assets	19
	Note 6 - Unpaid Claims and Claim Expenses	21
	Note 7 - Reinsurance	22
	Note 8 - Commitments	22
	Note 9 - Segment Information	23
	Note 10 - Accumulated Other Comprehensive Income (Loss)	24
	Note 11 - Supplemental Consolidated Cash and Cash Flow Information	25
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	49
PART II - OTHER INFORMATION
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 5.	Other Information	50
Item 6.	Exhibits	50
SIGNATURES		55

PART I: FINANCIAL INFORMATION

ITEM 1. I Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Horace Mann Educators Corporation:

Results of Review of Interim Financial Information

We have reviewed the consolidated balance sheet of Horace Mann Educators Corporation and subsidiaries (the Company) as of June 30, 2021, the related consolidated statements of operations, comprehensive income (loss) and changes in shareholders' equity for the three and six-month periods ended June 30, 2021 and 2020, and cash flows for the six-month period ended June 30, 2021 and 2020, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2020, and the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 26, 2021, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2020, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ KPMG LLP

KPMG LLP

Chicago, Illinois

August 6, 2021

Horace Mann Educators Corporation 1 Quarterly Report on Form 10-Q

HORACE MANN EDUCATORS CORPORATION

CONSOLIDATED BALANCE SHEETS

($ in millions, except share data)

	June 30, 2021		December 31, 2020
	(Unaudited)
Assets
Investments
Fixed maturity securities, available for sale, at fair value (amortized cost, net 2021, $6,049.4; 2020, $5,788.6)	$	6,555.0	$	6,345.3
Equity securities at fair value	145.7		121.6
Limited partnership interests	585.7		449.0
Short-term and other investments	301.1		346.3
Total investments	7,587.5		7,262.2
Cash	29.4		22.3
Deferred policy acquisition costs	236.0		229.8
Deposit asset on reinsurance	2,456.8		2,420.9
Intangible assets	151.9		158.5
Goodwill	43.5		43.5
Other assets	428.3		443.2
Separate Account (variable annuity) assets	3,256.7		2,891.4
Total assets	$	14,190.1	$	13,471.8
Liabilities and Shareholders' Equity
Policy liabilities
Investment contract and policy reserves	$	6,526.9	$	6,445.3
Unpaid claims and claim expenses	433.6		438.8
Unearned premiums	251.2		264.5
Total policy liabilities	7,211.7		7,148.6
Other policyholder funds	1,023.1		751.3
Other liabilities	468.5		453.1
Short-term debt	135.0		135.0
Long-term debt	278.5		302.3
Separate Account (variable annuity) liabilities	3,256.7		2,891.4
Total liabilities	12,373.5		11,681.7
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued	—		—
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2021, 66,432,547; 2020, 66,316,797	0.1		0.1
Additional paid-in capital	490.7		488.4
Retained earnings	1,494.4		1,434.6
Accumulated other comprehensive income (loss), net of tax:
Net unrealized investment gains on fixed maturity securities	332.2		366.3
Net funded status of benefit plans	(11.2)		(11.2)
Treasury stock, at cost, 2021, 24,942,264 shares; 2020, 24,902,579 shares	(489.6)		(488.1)
Total shareholders’ equity	1,816.6		1,790.1
Total liabilities and shareholders’ equity	$	14,190.1	$	13,471.8

See Notes to Consolidated Financial Statements.

Horace Mann Educators Corporation 2 Quarterly Report on Form 10-Q

HORACE MANN EDUCATORS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

($ in millions, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Statements of Operations
Revenues
Premiums and contract charges earned	$	225.8	$	225.4	$	453.4	$	461.7
Net investment income	109.2		80.4		204.7		162.7
Net investment gains (losses)	4.9		3.2		(4.1)		(15.3)
Other income	7.2		5.9		15.1		13.1
Total revenues	347.1		314.9		669.1		622.2
Benefits, losses and expenses
Benefits, claims and settlement expenses	147.1		143.0		281.4		281.7
Interest credited	51.2		50.7		101.8		102.2
Operating expenses	60.5		55.7		118.5		116.4
DAC unlocking and amortization expense	23.5		20.4		47.6		50.4
Intangible asset amortization expense	3.2		3.7		6.5		7.4
Interest expense	3.5		4.0		7.0		8.2
Total benefits, losses and expenses	289.0		277.5		562.8		566.3
Income before income taxes	58.1		37.4		106.3		55.9
Income tax expense	11.4		6.9		20.3		6.9
Net income	$	46.7	$	30.5	$	86.0	$	49.0
Net income per share
Basic	$	1.11	$	0.73	$	2.05	$	1.17
Diluted	$	1.11	$	0.73	$	2.04	$	1.17
Weighted average number of shares and equivalent shares
Basic	42.0		41.9		42.0		41.9
Diluted	42.1		42.0		42.1		42.0
Statements of Comprehensive Income (Loss)
Net income	$	46.7	$	30.5	$	86.0	$	49.0
Other comprehensive income (loss), net of tax:
Change in net unrealized investment gains (losses) on fixed maturity securities	88.6		142.5		(34.1)		48.7
Change in net funded status of benefit plans	—		—		—		—
Other comprehensive income (loss)	88.6		142.5		(34.1)		48.7
Comprehensive income (loss)	$	135.3	$	173.0	$	51.9	$	97.7

See Notes to Consolidated Financial Statements.

Horace Mann Educators Corporation 3 Quarterly Report on Form 10-Q

HORACE MANN EDUCATORS CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

($ in millions, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Common stock, $0.001 par value
Beginning balance	$	0.1	$	0.1	$	0.1	$	0.1
Options exercised	—		—		—		—
Conversion of common stock units	—		—		—		—
Conversion of restricted stock units	—		—		—		—
Ending balance	0.1		0.1		0.1		0.1
Additional paid-in capital
Beginning balance	489.2		481.9		488.4		481.0
Options exercised and conversion of common stock units and restricted stock units	—		0.4		(1.2)		0.2
Share-based compensation expense	1.5		1.4		3.5		2.5
Ending balance	490.7		483.7		490.7		483.7
Retained earnings
Beginning balance	1,460.8		1,357.8		1,434.6		1,352.5
Net income	46.7		30.5		86.0		49.0
Dividends, 2021, $0.31, $0.62 per share; 2020, $0.30, $0.60 per share	(13.1)		(12.6)		(26.2)		(25.3)
Cumulative effect of change in accounting principle	—		—		—		(0.5)
Ending balance	1,494.4		1,375.7		1,494.4		1,375.7
Accumulated other comprehensive income (loss), net of tax:
Beginning balance	232.4		125.9		355.1		219.7
Change in net unrealized investment gains (losses) on fixed maturity securities	88.6		142.5		(34.1)		48.7
Change in net funded status of benefit plans	—		—		—		—
Ending balance	321.0		268.4		321.0		268.4
Treasury stock, at cost
Beginning balance	(489.6)		(488.1)		(488.1)		(485.9)
Acquisition of shares	—		—		(1.5)		(2.2)
Ending balance	(489.6)		(488.1)		(489.6)		(488.1)
Shareholders' equity at end of period	$	1,816.6	$	1,639.8	$	1,816.6	$	1,639.8

See Notes to Consolidated Financial Statements.

Horace Mann Educators Corporation 4 Quarterly Report on Form 10-Q

HORACE MANN EDUCATORS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

($ in millions)

	Six Months Ended June 30,
	2021		2020
Cash flows - operating activities
Net income	$	86.0	$	49.0
Adjustments to reconcile net income to net cash provided    by operating activities:
Net investment losses	4.1		15.3
Amortization of premiums and accretion of discounts on         fixed maturity securities, net	1.7		2.8
Depreciation and intangible asset amortization	11.1		11.7
Share-based compensation expense	3.8		2.8
Changes in:
Accrued investment income	(3.3)		(0.5)
Insurance liabilities	35.6		38.4
Premium receivables	4.5		2.1
Deferred policy acquisition costs	1.6		1.5
Reinsurance recoverables	(1.3)		(2.9)
Income tax liabilities	6.5		7.2
Other operating assets and liabilities	(12.0)		16.7
Other	(21.7)		21.5
Net cash provided by operating activities	116.6		165.6
Cash flows - investing activities
Fixed maturity securities
Purchases	(872.3)		(818.2)
Sales	163.8		294.2
Maturities, paydowns, calls and redemptions	443.7		372.4
Equity securities
Purchases	(36.1)		(11.8)
Sales and repayments	0.7		12.1
Limited partnership interests
Purchases	(141.4)		(30.3)
Sales	41.2		5.7
Change in short-term and other investments, net	57.3		(19.1)
Net cash used in investing activities	(343.1)		(195.0)
Cash flows - financing activities
Dividends paid to shareholders	(25.7)		(24.8)
FHLB borrowings	1.0		4.0
Principal repayment on FHLB borrowings	(25.0)		—
Acquisition of treasury stock	(1.5)		(2.2)
Proceeds from exercise of stock options	0.3		0.9
Withholding tax payments on RSUs tendered	(2.0)		(1.5)
Annuity contracts: variable, fixed and FHLB funding agreements:
Deposits	515.9		325.0
Benefits, withdrawals and net transfers to    Separate Account (variable annuity) assets	(216.2)		(196.9)
Life policy accounts:
Deposits	4.4		4.6
Withdrawals and surrenders	(2.1)		(2.1)
Change in deposit asset on reinsurance	(13.0)		(19.9)
Change in book overdrafts	(2.5)		(0.8)
Net cash provided by financing activities	233.6		86.3
Net increase in cash	7.1		56.9
Cash at beginning of period	22.3		25.5
Cash at end of period	$	29.4	$	82.4

See Notes to Consolidated Financial Statements.

Horace Mann Educators Corporation 5 Quarterly Report on Form 10-Q

HORACE MANN EDUCATORS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - Basis of Presentation and Significant Accounting Policies

Business

Horace Mann Educators Corporation is a holding company for insurance subsidiaries that market and underwrite personal lines of property and casualty insurance products (primarily personal lines of automobile and property insurance), supplemental insurance products (primarily cancer, heart, hospital, supplemental disability and accident coverages), retirement products (primarily tax-qualified fixed and variable annuities) and life insurance products, primarily to K-12 teachers, administrators and other employees of public schools and their families (collectively, HMEC, the Company or Horace Mann).

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in conformity with GAAP, but are not required for interim reporting purposes, have been omitted. These Consolidated Financial Statements and Notes thereto should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Part II - Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

The accompanying Consolidated Financial Statements and Notes thereto are unaudited. These financial statements reflect all adjustments (generally consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position, results of operations and cash flows for the interim periods. The Company's significant accounting policies are summarized in Part II - Item 8, Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Consolidation

All intercompany transactions and balances between HMEC and its subsidiaries and affiliates have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the reporting date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities (including evaluation of impairments), evaluation of goodwill and intangible assets for impairment, valuation of annuity and life deferred policy acquisition costs, valuation of liabilities for property and casualty unpaid claims and claim expenses and valuation of certain investment contracts and policy reserves.

Future Adoption of New Accounting Standards

Accounting for Long-Duration Insurance Contracts

In August 2018, the FASB issued accounting and disclosure guidance that contains targeted improvements to the accounting for long-duration insurance contracts. Under the new guidance, the cash flow assumptions used to measure the liability for future policy benefits for traditional insurance contracts will be required to be updated at least annually with changes recognized as a benefit expense (i.e., assumptions will no longer be locked-in).

Horace Mann Educators Corporation 6 Quarterly Report on Form 10-Q

NOTE 1 - Basis of Presentation and Significant Accounting Policies (continued)

Insurance entities will be required to use a standard discount rate to measure the liabilities that will be equivalent to the yield from a high-quality bond. The new guidance also changes the amortization of deferred policy acquisition costs (DAC) to be on a constant-level basis over the expected term of the related contracts with no interest accruing on the DAC balance. The new guidance also introduces a new category of contract features associated with deposit type contracts referred to as market risk benefits (MRBs). Contract features meeting the definition of a MRB will be measured at fair value. New disclosures will be required for long-duration insurance contracts in order to provide better transparency into the exposure of insurance entities and the drivers of their results. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2022, including interim periods within those years. With regards to the liability for future policy benefits and DAC, the guidance applies to contracts in force as of the beginning of the earliest period presented and may be applied retrospectively. With regards to MRBs, the guidance is to be applied retrospectively at the beginning of the earliest period presented. Early adoption is permitted. Management is currently evaluating the impact this guidance will have on the results of operations and financial position of the Company.

Subsequent Events

On July 14, 2021, the Company announced that it entered into a Stock Purchase Agreement (Agreement), by and among the Company and Independence Capital Corp. and Independence Holding Company (Seller) to acquire all the equity interests in Madison National Life Insurance Company, Inc., an insurance company organized under the laws of the State of Wisconsin (Madison National). The Agreement provides, among other things, that, upon the terms and subject to the conditions set forth in the Agreement, the Company will acquire all the equity interests in Madison National (Acquisition) for $172.5 million. The Seller will have a potential earn-out of up to $12.5 million payable in cash, if specified financial targets are achieved by the end of 2023. The Agreement and the consummation of the transactions contemplated by the Agreement have been approved by the Company’s Board of Directors. The closing of the Acquisition is expected to occur early during the first quarter of 2022, subject to the satisfaction or waiver of applicable closing conditions as well as approval by certain regulators.

Further, effective July 12, 2021, the Company, as borrower, amended its Credit Agreement with PNC Bank, National Association as administrative agent and certain lenders party thereto to increase the line of credit available under the Credit Agreement’s senior revolving credit facility from $225.0 million to $325.0 million. PNC Bank, National Association and JPMorgan Chase Bank, N.A. serve as joint lead arrangers under the Credit Agreement, with The Northern Trust Company, KeyBank National Association, U.S. Bank National Association, Illinois National Bank, and Comerica Bank as lenders participating in the syndicate.

The Company expects to utilize the Credit Agreement’s senior revolving credit facility to fund a portion of the acquisition of Madison National, as well as to be available for ongoing working capital, capital expenditures and general corporate expenditures.

Horace Mann Educators Corporation 7 Quarterly Report on Form 10-Q

NOTE 2 - Investments

Net Investment Income

The components of net investment income for the following periods were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fixed maturity securities	$	59.4	$	58.9	$	117.4	$	118.3
Equity securities	1.3		1.2		2.4		2.4
Limited partnership interests	23.0		(3.5)		34.3		(6.2)
Short-term and other investments	2.9		2.8		5.7		5.7
Investment expenses	(2.5)		(2.9)		(4.6)		(5.1)
Net investment income - investment portfolio	84.1		56.5		155.2		115.1
Investment income - deposit asset on reinsurance	25.1		23.9		49.5		47.6
Total net investment income	$	109.2	$	80.4	$	204.7	$	162.7

Net Investment Gains (Losses)

Net investment gains (losses) for the following periods were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fixed maturity securities	$	1.5	$	(0.7)	$	(3.9)	$	0.4
Equity securities	4.4		7.1		1.7		(7.6)
Short-term investments and other	(1.0)		(3.2)		(1.9)		(8.1)
Net investment gains (losses)	$	4.9	$	3.2	$	(4.1)	$	(15.3)

The Company, from time to time, sells fixed maturity securities subsequent to the reporting date that were considered temporarily impaired at such reporting date. Such sales are due to issuer specific events occurring subsequent to the reporting date that result in a change in the Company's intent to sell a fixed maturity security. The types of events that may result in a sale include significant changes in the economic facts and circumstances related to the invested asset, significant unforeseen changes in liquidity needs, or changes in the Company's investment strategy.

Net Investment Gains (Losses) by Transaction Type

The following table reconciles net investment gains (losses) by transaction type:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Credit loss impairments(1)	$	—	$	—	$	(1.1)	$	—
Intent-to-sell impairments	—		(0.5)		(2.1)		(4.2)
Total impairments on investments recognized in net income	—		(0.5)		(3.2)		(4.2)
Sales and other, net	1.6		0.4		(0.5)		4.9
Change in fair value - equity securities	4.3		6.6		1.5		(7.9)
Change in fair value and losses realized on settlements - derivatives	(1.0)		(3.3)		(1.9)		(8.1)
Net investment gains (losses)	$	4.9	$	3.2	$	(4.1)	$	(15.3)

(1)    For the six months ended June 30, 2021, the Company recognized a valuation allowance of $1.1 million for credit loss impairments with respect to fixed maturity securities available for sale.

Horace Mann Educators Corporation 8 Quarterly Report on Form 10-Q

NOTE 2 - Investments (continued)

Fixed Maturity Securities

The Company's investment portfolio is comprised primarily of fixed maturity securities. Amortized cost, net, gross unrealized investment gains (losses) and fair values of all fixed maturity securities in the portfolio were as follows:

($ in millions)	Amortized Cost, net		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2021
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:(1)
Mortgage-backed securities	$	610.8	$	68.0	$	0.5	$	678.3
Other, including U.S. Treasury securities	430.5		31.0		5.3		456.2
Municipal bonds	1,598.6		200.9		0.4		1,799.1
Foreign government bonds	40.2		4.2		—		44.4
Corporate bonds	2,211.3		202.5		5.0		2,408.8
Other asset-backed securities	1,158.0		22.7		12.5		1,168.2
Totals	$	6,049.4	$	529.3	$	23.7	$	6,555.0
December 31, 2020
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:(1)
Mortgage-backed securities	$	605.5	$	79.6	$	0.3	$	684.8
Other, including U.S. Treasury securities	395.0		39.2		1.0		433.2
Municipal bonds	1,612.3		215.7		0.5		1,827.5
Foreign government bonds	40.2		4.9		—		45.1
Corporate bonds	1,905.2		221.6		3.9		2,122.9
Other asset-backed securities	1,230.4		24.1		22.7		1,231.8
Totals	$	5,788.6	$	585.1	$	28.4	$	6,345.3

(1)    Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $380.3 million and $387.1 million; Federal Home Loan Mortgage Corporation (FHLMC) of $331.9 million and $344.3 million; and Government National Mortgage Association (GNMA) of $123.8 million and $132.3 million as of June 30, 2021 and December 31, 2020, respectively.

Horace Mann Educators Corporation 9 Quarterly Report on Form 10-Q

NOTE 2 - Investments (continued)

The following table presents the fair value and gross unrealized losses for fixed maturity securities in an unrealized loss position at June 30, 2021 and December 31, 2020, respectively. The Company views the decrease in fair value of all of the fixed maturity securities with unrealized losses at June 30, 2021 — which was driven largely by increasing interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. As of June 30, 2021, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell the fixed maturity securities with unrealized losses before an anticipated recovery in value. Therefore, it was determined that the unrealized losses on the fixed maturity securities presented in the table below were not indicative of any impairments as of June 30, 2021.

($ in millions)	12 Months or Less					More than 12 Months					Total
	Fair Value			Gross Unrealized Losses		Fair Value			Gross Unrealized Losses		Fair Value			Gross Unrealized Losses
June 30, 2021
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	13.9		$	0.3	$	3.0		$	0.2	$	16.9		$	0.5
Other	113.2			5.3		—			—		113.2			5.3
Municipal bonds	24.0			0.3		0.7			0.1		24.7			0.4
Foreign government bonds	—			—		—			—		—			—
Corporate bonds	142.3			3.8		38.8			1.2		181.1			5.0
Other asset-backed securities	136.0			1.0		262.8			11.5		398.8			12.5
Total	$	429.4		$	10.7	$	305.3		$	13.0	$	734.7		$	23.7
Number of positions with a    gross unrealized loss	267					154					421
Fair value as a percentage of total fixed    maturity securities at fair value	6.5		%			4.7		%			11.2		%
December 31, 2020
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	4.9		$	0.1	$	2.6		$	0.2	$	7.5		$	0.3
Other	95.9			1.0		—			—		95.9			1.0
Municipal bonds	18.1			0.5		—			—		18.1			0.5
Foreign government bonds	—			—		—			—		—			—
Corporate bonds	126.6			3.7		10.9			0.2		137.5			3.9
Other asset-backed securities	316.9			17.2		409.3			5.5		726.2			22.7
Total	$	562.4		$	22.5	$	422.8		$	5.9	$	985.2		$	28.4
Number of positions with a    gross unrealized loss	308					123					431
Fair value as a percentage of total fixed    maturity securities at fair value	8.9		%			6.7		%			15.6		%

Fixed maturity securities with an investment grade rating represented 85.6% of the gross unrealized losses as of June 30, 2021. With respect to fixed maturity securities involving securitized financial assets, the underlying collateral cash flows were stress tested to determine there was no adverse change in the present value of cash flows below the amortized cost basis.

Horace Mann Educators Corporation 10 Quarterly Report on Form 10-Q

NOTE 2 - Investments (continued)

Maturities of Fixed Maturity Securities

The following table presents the distribution of the Company’s fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments.

($ in millions)	Percent of Total Fair Value				June 30, 2021
	June 30, 2021		December 31, 2020		Fair Value		Amortized Cost, net
Estimated expected maturity:
Due in 1 year or less	3.9	%	4.0	%	$	254.9	$	247.8
Due after 1 year through 5 years	26.6	%	28.3	%	1,745.1		1,655.2
Due after 5 years through 10 years	28.4	%	28.0	%	1,861.9		1,702.2
Due after 10 years through 20 years	24.3	%	24.6	%	1,595.1		1,433.7
Due after 20 years	16.8	%	15.1	%	1,098.0		1,010.5
Total	100.0	%	100.0	%	$	6,555.0	$	6,049.4
Average option-adjusted duration, in years	6.8		6.4

Sales of Fixed Maturity and Equity Securities

Proceeds received from sales of fixed maturity and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each period were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fixed maturity securities
Proceeds received	$	68.3	$	196.0	$	163.8	$	294.2
Gross gains realized	1.7		5.5		3.0		10.3
Gross losses realized	(0.2)		(5.6)		(3.6)		(5.9)
Equity securities
Proceeds received	$	0.3	$	10.6	$	0.7	$	12.1
Gross gains realized	0.1		1.7		0.2		2.0
Gross losses realized	—		(1.2)		—		(1.8)

Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities

The following table reconciles net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in accumulated other comprehensive income (AOCI), before the impact of DAC:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net unrealized investment gains (losses)    on fixed maturity securities, net of tax
Beginning of period	$	287.2	$	149.9	$	439.8	$	264.4
Change in net unrealized investment gains    (losses) on fixed maturity securities	116.9		174.9		(42.1)		71.2
Reclassification of net investment (gains) losses    on securities to net income	(4.7)		5.1		1.7		(5.7)
End of period	$	399.4	$	329.9	$	399.4	$	329.9

Horace Mann Educators Corporation 11 Quarterly Report on Form 10-Q

NOTE 2 - Investments (continued)

Limited Partnership Interests

Investments in limited partnership interests are accounted for using the equity method of accounting and include interests in senior commercial mortgage loan funds, hedge funds, infrastructure debt funds, infrastructure equity funds and other funds. Principal factors influencing carrying amount appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. The Company recognizes an impairment loss for equity method limited partnership interests when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. The carrying amounts of equity method limited partnership interests were as follows:

($ in millions)
	June 30, 2021		December 31, 2020
Senior commercial mortgage loan funds	$	254.8	$	149.6
Hedge funds	50.7		63.2
Infrastructure debt funds	58.1		58.3
Infrastructure equity funds	57.3		52.1
Other funds(1)	164.8		125.8
Total	$	585.7	$	449.0

(1)Other funds consist primarily of limited partnership interests in real estate equity funds, private equity funds and corporate mezzanine funds.

Offsetting of Assets and Liabilities

The Company's derivatives are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event minimum thresholds have been reached. The following table presents instruments that were subject to a master netting arrangement for the Company.

($ in millions)			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts						Financial Instruments		Cash Collateral Received		Net Amount
June 30, 2021
Asset derivatives:
Free-standing derivatives	$	15.4	$	—	$	15.4	$	13.6	$	3.3	$	(1.5)
December 31, 2020
Asset derivatives:
Free-standing derivatives	$	16.8	$	—	$	16.8	$	13.7	$	2.6	$	0.5

Deposits

At June 30, 2021 and December 31, 2020, fixed maturity securities with a fair value of $26.6 million and $26.9 million, respectively, were on deposit with governmental agencies as required by law in various states for which the insurance subsidiaries of HMEC conduct business. In addition, at June 30, 2021 and December 31, 2020, fixed maturity securities with a fair value of $974.8 million and $707.3 million, respectively, were on deposit with the Federal Home Loan Bank of Chicago (FHLB) as collateral for amounts subject to funding agreements, advances and borrowings which were equal to $887.5 million at June 30, 2021 and $644.5 million at December 31, 2020. The deposited securities are reported as Fixed maturity securities on the Company’s Consolidated Balance Sheets.

Horace Mann Educators Corporation 12 Quarterly Report on Form 10-Q

NOTE 3 - Fair Value of Financial Instruments

The Company is required to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values of the Company’s insurance contracts other than annuity contracts (which are investment contracts) are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts.

Information regarding the three-level hierarchy presented below and the valuation methodologies utilized by the Company to estimate fair values at each reporting date is included in Part II - Item 8, Note 3 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Horace Mann Educators Corporation 13 Quarterly Report on Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

Financial Instruments Measured and Carried at Fair Value on a Recurring Basis

The following table presents the Company's fair value hierarchy for those financial assets and financial liabilities measured and carried at fair value on a recurring basis. During the six months ended June 30, 2021 and 2020, there were no transfers between Level 1 and Level 2. At June 30, 2021, Level 3 invested assets comprised 4.7% of the Company’s total investment portfolio at fair value.

($ in millions)	Carrying Amount		Fair Value		Fair Value Measurements at Reporting Date Using
					Level 1		Level 2		Level 3
June 30, 2021
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally    sponsored agency obligations:
Mortgage-backed securities	$	678.3	$	678.3	$	—	$	678.3	$	—
Other, including U.S. Treasury securities	456.2		456.2		28.0		428.2		—
Municipal bonds	1,799.1		1,799.1		—		1,740.5		58.6
Foreign government bonds	44.4		44.4		—		44.4		—
Corporate bonds	2,408.8		2,408.8		14.6		2,243.7		150.5
Other asset-backed securities	1,168.2		1,168.2		—		1,052.7		115.5
Total fixed maturity securities	6,555.0		6,555.0		42.6		6,187.8		324.6
Equity securities	145.7		145.7		40.0		105.4		0.3
Short-term investments	93.5		93.5		90.4		3.1		—
Other investments	46.8		46.8		—		46.8		—
Totals	$	6,841.0	$	6,841.0	$	173.0	$	6,343.1	$	324.9
Separate Account (variable annuity) assets(1)	$	3,256.7	$	3,256.7	$	3,256.7	$	—	$	—
Financial Liabilities
Investment contract and policy reserves,  embedded derivatives	$	2.8	$	2.8	$	—	$	2.8	$	—
Other policyholder funds, embedded derivatives	$	108.9	$	108.9	$	—	$	—	$	108.9
December 31, 2020
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally    sponsored agency obligations:
Mortgage-backed securities	$	684.8	$	684.8	$	—	$	673.7	$	11.1
Other, including U.S. Treasury securities	433.2		433.2		18.4		414.8		—
Municipal bonds	1,827.5		1,827.5		—		1,767.9		59.6
Foreign government bonds	45.1		45.1		—		45.1		—
Corporate bonds	2,122.9		2,122.9		14.9		1,952.2		155.8
Other asset-backed securities	1,231.8		1,231.8		—		1,103.5		128.3
Total fixed maturity securities	6,345.3		6,345.3		33.3		5,957.2		354.8
Equity securities	121.6		121.6		39.2		82.1		0.3
Short-term investments	141.8		141.8		137.7		4.1		—
Other investments	36.3		36.3		—		36.3		—
Totals	$	6,645.0	$	6,645.0	$	210.2	$	6,079.7	$	355.1
Separate Account (variable annuity) assets(1)	$	2,891.4	$	2,891.4	$	2,891.4	$	—	$	—
Financial Liabilities
Investment contract and policy reserves,  embedded derivatives	$	2.5	$	2.5	$	—	$	2.5	$	—
Other policyholder funds, embedded derivatives	$	104.5	$	104.5	$	—	$	—	$	104.5

(1)    Separate Account (variable annuity) liabilities are equal to the estimated fair value of the Separate Account (variable annuity) assets.

Horace Mann Educators Corporation 14 Quarterly Report on Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

Changes in Level 3 Fair Value Measurements

The reconciliation for all financial assets and financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows:

($ in millions)	Financial Assets												Financial Liabilities(1)
	Municipal Bonds		Corporate Bonds		Mortgage-Backed and Other Asset- Backed Securities(2)		Total Fixed Maturity Securities		Equity Securities		Total
Beginning balance, April 1, 2021	$	58.6	$	149.1	$	132.2	$	339.9	$	0.3	$	340.2	$	107.6
Transfers into Level 3(3)	—		28.5		3.1		31.6		—		31.6		—
Transfers out of Level 3(3)	—		(29.4)		(13.3)		(42.7)		—		(42.7)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		3.2
Net unrealized investment gains  (losses) included in OCI	0.3		3.2		1.3		4.8		—		4.8		—
Purchases	—		—		—		—		—		—		—
Issuances	—		—		—		—		—		—		1.2
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.3)		(0.9)		(7.8)		(9.0)		—		(9.0)		(3.1)
Ending balance, June 30, 2021	$	58.6	$	150.5	$	115.5	$	324.6	$	0.3	$	324.9	$	108.9
Beginning balance, January 1, 2021	$	59.6	$	155.8	$	139.4	$	354.8	$	0.3	$	355.1	$	104.5
Transfers into Level 3(3)	—		52.6		6.2		58.8		—		58.8		—
Transfers out of Level 3(3)	—		(56.7)		(19.2)		(75.9)		—		(75.9)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		7.5
Net unrealized investment gains  (losses) included in OCI	(0.6)		1.2		1.0		1.6		—		1.6		—
Purchases	—		—		—		—		—		—		—
Issuances	—		—		—		—		—		—		1.9
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.4)		(2.4)		(11.9)		(14.7)		—		(14.7)		(5.0)
Ending balance, June 30, 2021	$	58.6	$	150.5	$	115.5	$	324.6	$	0.3	$	324.9	$	108.9

(1)Represents embedded derivatives, all related to the Company's fixed indexed annuity products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets.

(2)Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities.

(3)Transfers into and out of Level 3 during the three and six months ended June 30, 2021 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

Horace Mann Educators Corporation 15 Quarterly Report on Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

($ in millions)	Financial Assets												Financial Liabilities(1)
	Municipal Bonds		Corporate Bonds		Mortgage-Backed and Other Asset- Backed Securities(2)		Total Fixed Maturity Securities		Equity Securities		Total
Beginning balance, April 1, 2020	$	104.9	$	111.7	$	140.5	$	357.1	$	0.1	$	357.2	$	87.5
Transfers into Level 3(3)	10.7		14.0		64.2		88.9		—		88.9		—
Transfers out of Level 3(3)	(45.9)		(4.2)		(3.4)		(53.5)		—		(53.5)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		6.0
Net unrealized investment gains  (losses) included in OCI	3.8		5.3		3.3		12.4		—		12.4		—
Purchases	—		—		—		—		—		—		—
Issuances	—		—		—		—		—		—		2.5
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.3)		(0.5)		(4.5)		(5.3)		—		(5.3)		(2.4)
Ending balance, June 30, 2020	$	73.2	$	126.3	$	200.1	$	399.6	$	0.1	$	399.7	$	93.6
Beginning balance, January 1, 2020	$	44.3	$	104.0	$	146.8	$	295.1	$	0.1	$	295.2	$	93.7
Transfers into Level 3(3)	74.5		32.8		86.7		194.0		—		194.0		—
Transfers out of Level 3(3)	(45.9)		(14.2)		(6.4)		(66.5)		—		(66.5)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		0.9
Net unrealized investment gains  (losses) included in OCI	0.8		(0.2)		(21.1)		(20.5)		—		(20.5)		—
Purchases	—		6.9		1.9		8.8		—		8.8		—
Issuances	—		—		—		—		—		—		3.9
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.5)		(3.0)		(7.8)		(11.3)		—		(11.3)		(4.9)
Ending balance, June 30, 2020	$	73.2	$	126.3	$	200.1	$	399.6	$	0.1	$	399.7	$	93.6

(1)    Represents embedded derivatives, all related to the Company's fixed indexed annuity products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets.

(2)    Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities.

(3)    Transfers into and out of Level 3 during the three and six months ended June 30, 2020 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

For the six months ended June 30, 2021 and June 30, 2020, the Company had no net investment gains or losses on Level 3 financial assets. For the three and six months ended June 30, 2021, the Company had $3.2 million and $7.5 million of net investment losses that were included in net income and were attributable to changes in the fair value of Level 3 financial liabilities; for the three and six months ended June 30, 2020, the respective net investment losses were $6.0 million and $0.9 million.

Horace Mann Educators Corporation 16 Quarterly Report on Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

Quantitative Information about Level 3 Fair Value Measurements

The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized within Level 3.

($ in millions)
Financial Assets	Fair Value at June 30, 2021		Valuation Technique(s)	Unobservable Inputs	Range (Weighted Average) and Single Point Best Estimate(1)
Municipal bonds	$	58.6	discounted cash flow	I spread(2)	307 - 391 bps
Corporate bonds	150.5		discounted cash flow	N spread(3)	272 - 553 bps
			market comparable	option adjusted spread	12.54%
Other asset-backed securities	115.5		vendor price	haircut	3.00% - 5.00%
			discounted cash flow	constant prepayment rate	20.00%
			discounted cash flow	T spread(4)	235 - 800 bps
			discounted cash flow	PDI interest margin(5)	7.13%
			discounted cash flow	SBL interest margin(6)	4.50%
Government mortgage-backed securities	—		vendor price	haircut	3.00% - 5.00%
Equity securities	0.3		Black Scholes	equity value	low - 31.00%; high - 41.00%

($ in millions)
Financial Liabilities	Fair Value at June 30, 2021		Valuation Technique(s)	Unobservable Inputs	Range (Weighted Average) and Single Point Best Estimate(1)
Derivatives embedded in fixed indexed annuity products	$	108.9	discounted cash flow	lapse rate	5.30%
				mortality multiplier(7)	63.00%
				option budget	0.90% - 2.50%
				non-performance adjustment(8)	5.00%

(1)    When a range of unobservable inputs is not readily available, the Company uses a single point best estimate.

(2)    "I spread" is the interpolated weighted average life point on the "on the run" (OTR) point of the curve.

(3)    "N spread" is the interpolated weighted average life point on the swap curve.

(4)    "T spread" is a specific point on the OTR curve.

(5)    "PDI" stands for private debt investment.

(6)    "SBL" stands for broadly syndicated loans.

(7)    Mortality multiplier is applied to the Annuity 2000 table.

(8)    Determined as a percentage of a risk-free rate.

The valuation techniques and significant unobservable inputs used in the fair value measurement for financial assets and financial liabilities classified as Level 3 are subject to the control processes as described in Part II - Item 8, Note 3 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Generally, valuation techniques for fixed maturity securities include spread pricing, matrix pricing and discounted cash flow methodologies; include inputs such as quoted prices for identical or similar securities that are less liquid; and are based on lower levels of trading activity than securities classified as Level 2. The valuation techniques and significant unobservable inputs used in the fair value measurement for equity securities classified as Level 3 use similar valuation techniques and significant unobservable inputs as those used for fixed maturity securities.

Horace Mann Educators Corporation 17 Quarterly Report on Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

The sensitivity of the estimated fair values to changes in the significant unobservable inputs for fixed maturity and equity securities included in Level 3 include: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. Significant spread widening in isolation will adversely impact the overall valuation, while significant tightening will lead to substantial valuation increases. Significant increases (decreases) in illiquidity premiums in isolation will result in substantially lower (higher) valuations. Significant increases (decreases) in expected default rates in isolation will result in substantially lower (higher) valuations.

Financial Instruments Not Carried at Fair Value; Disclosure Required

The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. These financial assets and financial liabilities are further described in Part II - Item 8, Note 3 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The following table presents the carrying amount, fair value and fair value hierarchy of these financial assets and financial liabilities.

($ in millions)	Carrying Amount		Fair Value		Fair Value Measurements at Reporting Date Using
					Level 1		Level 2		Level 3
June 30, 2021
Financial Assets
Other investments	$	160.7	$	164.3	$	—	$	—	$	164.3
Deposit asset on reinsurance	2,456.8		2,948.5		—		—		2,948.5
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	4,911.3		5,031.5		—		—		5,031.5
Investment contract and policy reserves, account values on life contracts	101.4		110.9		—		—		110.9
Other policyholder funds	914.2		914.2		—		857.7		56.5
Short-term debt	135.0		135.0		—		—		135.0
Long-term debt	278.5		313.6		—		313.6		—
December 31, 2020
Financial Assets
Other investments	$	168.3	$	172.1	$	—	$	—	$	172.1
Deposit asset on reinsurance	2,420.9		3,030.6		—		—		3,030.6
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	4,847.6		4,963.3		—		—		4,963.3
Investment contract and policy reserves, account values on life contracts	98.7		108.4		—		—		108.4
Other policyholder funds	646.8		646.8		—		590.7		56.1
Short-term debt	135.0		135.0		—		—		135.0
Long-term debt	302.3		331.1		—		331.1		—

Horace Mann Educators Corporation 18 Quarterly Report on Form 10-Q

NOTE 4 - Deposit Asset on Reinsurance

In the second quarter of 2019, the Company reinsured a $2.9 billion block of in force fixed and variable annuity business with a minimum crediting rate of 4.5%. This represented approximately 50% of the Company’s in force fixed annuity account balances. The arrangement contains investment guidelines and a trust to help meet the Company’s risk management objectives.

Under the agreement, approximately $2.2 billion of fixed annuity reserves were reinsured on a coinsurance basis. The separate account assets and liabilities of approximately $0.7 billion were reinsured on a modified coinsurance basis and thus, remain on the Company's consolidated financial statements, but the related results of operations are fully reinsured.

The Company determined that the reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk. Therefore, the Company recognizes the reinsurance agreement using the deposit method of accounting. The assets transferred to the reinsurer as consideration paid is reported as a Deposit asset on reinsurance on the Company's Consolidated Balance Sheets. As amounts are received or paid, consistent with the underlying reinsured contracts, the Deposit asset on reinsurance is adjusted. The Deposit asset on reinsurance is accreted to the estimated ultimate cash flows using the interest method and the adjustment is reported as Net investment income. Interest accreted on the Deposit asset on reinsurance was $25.1 million and $49.5 million for the three and six months ended June 30, 2021, respectively. Interest accreted on the Deposit asset on reinsurance was $23.9 million and $47.6 million for the three and six months ended June 30, 2020, respectively.

NOTE 5 - Goodwill and Intangible Assets

The Company conducts impairment testing for goodwill and intangible assets at least annually, or more often if events, changes or circumstances indicate that the carrying amount may not be recoverable. See Part II - Item 8, Note 1 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 for further description of impairment testing.

There were no changes in the carrying amount of goodwill by reporting unit for the three months ended June 30, 2021. The carrying amount of goodwill by reporting unit as of June 30, 2021 was as follows:

($ in millions)	June 30, 2021
Property and Casualty	$	9.5
Supplemental	19.6
Retirement	4.5
Life	9.9
Total	$	43.5

As of June 30, 2021, the outstanding amounts of definite-lived intangible assets subject to amortization are attributable to the acquisitions of Benefit Consultants Group, Inc. (BCG) and NTA Life Enterprises, LLC (NTA) during 2019. The acquisition of BCG resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $14.1 million and the acquisition of NTA resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $160.4 million. As of June 30, 2021 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows:

Horace Mann Educators Corporation 19 Quarterly Report on Form 10-Q

NOTE 5 - Goodwill and Intangible Assets (continued)

($ in millions)	Weighted Average
	Useful Life (in Years)
At inception:
Value of business acquired	30	$	94.4
Value of distribution acquired	17	54.0
Value of agency relationships	14	17.0
Value of customer relationships	10	9.1
Total	23	174.5
Accumulated amortization and impairments:
Value of business acquired		(14.3)
Value of distribution acquired		(10.2)
Value of agency relationships		(5.2)
Value of customer relationships		(3.7)
Total		(33.4)
Net intangible assets subject to amortization:		$	141.1

With regards to the definite-lived intangible assets in the table above, the value of business acquired intangible asset represents the present value of the expected underwriting profit within policies that were in force on the date of acquisition. The value of distribution acquired intangible asset represents the present value of future business to be written by the existing agency force. The value of agency relationships intangible asset represents the present value of the commission overrides retained by NTA. The value of customer relationships intangible asset represents the present value of the expected profits from existing BCG customers in force at the date of acquisition. All of the aforementioned definite-lived intangible assets were valued using the income approach.

Estimated future amortization of the Company's definite-lived intangible assets were as follows:

($ in millions)
Year Ending December 31,
2021 (excluding the six months ended June 30, 2021)	$	6.4
2022	12.1
2023	11.2
2024	10.5
2025	9.8
Thereafter	91.1
Total	$	141.1

The value of business acquired intangible asset is being amortized by product based on the present value of future premiums to be received. The value of distribution acquired intangible asset is being amortized on a straight-line basis. The value of agency relationships intangible asset is being amortized based on the present value of future premiums to be received. The value of customer relationships intangible asset is being amortized based on the present value of future profits to be received.

Indefinite-lived intangible assets (not subject to amortization) as of June 30, 2021 were as follows:

($ in millions)
Trade names	$	7.9
State licenses	2.9
Total	$	10.8

The trade names intangible asset represents the present value of future savings accruing to NTA and BCG by virtue of not having to pay royalties for the use of the trade names, valued using the relief from royalty method. The state licenses intangible asset represents the regulatory licenses held by NTA that were valued using the cost approach.

Horace Mann Educators Corporation 20 Quarterly Report on Form 10-Q

NOTE 6 - Unpaid Claims and Claim Expenses

The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both a gross and net (after reinsurance) basis. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the period gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets.

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Property and Casualty
Beginning gross reserves(1)	$	374.1	$	382.2	$	372.2	$	387.0
Less: reinsurance recoverables	112.5		119.0		112.9		120.5
Net reserves, beginning of period(2)	261.6		263.2		259.3		266.5
Incurred claims and claim expenses:
Claims occurring in the current period	118.1		109.1		212.9		214.6
Decrease in estimated reserves for claims occurring in prior periods(3)	(4.2)		(1.0)		(4.2)		(2.0)
Total claims and claim expenses incurred(4)	113.9		108.1		208.7		212.6
Claims and claim expense payments for claims occurring during:
Current period	79.1		61.4		113.5		104.9
Prior periods	36.9		37.5		95.0		101.8
Total claims and claim expense payments	116.0		98.9		208.5		206.7
Net reserves, end of period(2)	259.5		272.4		259.5		272.4
Plus: reinsurance recoverables	108.9		116.1		108.9		116.1
Ending gross reserves(1)	$	368.4	$	388.5	$	368.4	$	388.5

(1)Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $65.2 million and $56.1 million as of June 30, 2021 and 2020, respectively, in addition to Property and Casualty reserves.

(2)Reserves net of anticipated reinsurance recoverables.

(3)Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs.

(4)Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $33.2 million and $72.7 million for the three and six months ended June 30, 2021, respectively, in addition to Property and Casualty amounts. Benefits, claims and settlement expenses for Supplemental, Retirement and Life of $34.9 million and $69.1 million for the three and six months ended June 30, 2020, respectively.

Net favorable development of total reserves for Property and Casualty claims occurring in prior years was $4.2 million and $2.0 million for the six months ended June 30, 2021 and 2020, respectively. The favorable development for the six months ended June 30, 2021 was the result of favorable loss trends in automobile and homeowners loss emergence for accident years 2020 and prior. The favorable development for the six months ended June 30, 2020 was the result of favorable loss trends in automobile and homeowners loss emergence for accident years 2019 and prior.

Horace Mann Educators Corporation 21 Quarterly Report on Form 10-Q

NOTE 7 - Reinsurance

The Company recognizes the cost of reinsurance premiums over the contract periods for such premiums in proportion to the insurance protection provided. Amounts recoverable from reinsurers for unpaid claims and claim settlement expenses, including estimated amounts for unsettled claims, claims incurred but not yet reported and policy benefits, are estimated in a manner consistent with the insurance liability associated with the policy. The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows:

($ in millions)	Gross Amount		Ceded to Other Companies(1)		Assumed from Other Companies		Net Amount
Three months ended June 30, 2021
Premiums written and contract deposits(2)	$	351.2	$	5.6	$	2.5	$	348.1
Premiums and contract charges earned	231.5		8.1		2.4		225.8
Benefits, claims and settlement expenses	144.6		(1.0)		1.5		147.1
Three months ended June 30, 2020
Premiums written and contract deposits(2)	$	332.4	$	6.4	$	3.1	$	329.1
Premiums and contract charges earned	230.6		8.3		3.1		225.4
Benefits, claims and settlement expenses	143.3		2.4		2.1		143.0
Six months ended June 30, 2021
Premiums written and contract deposits(2)	$	671.8	$	11.5	$	4.0	$	664.3
Premiums and contract charges earned	465.7		16.5		4.2		453.4
Benefits, claims and settlement expenses	280.2		1.5		2.7		281.4
Six months ended June 30, 2020
Premiums written and contract deposits(2)	$	666.1	$	12.7	$	4.5	$	657.9
Premiums and contract charges earned	473.8		16.7		4.6		461.7
Benefits, claims and settlement expenses	282.8		4.3		3.2		281.7

(1)    Excludes the annuity reinsurance transaction accounted for using the deposit method that is discussed in Note 4.

(2)    This measure is not based on accounting principles generally accepted in the United States of America (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as Exhibit 99.1 in the Company's reports filed with the SEC.

NOTE 8 - Commitments

Investment Commitments

The Company has outstanding commitments to fund investments primarily in limited partnership interests. Such unfunded commitments were $786.3 million and $571.9 million as of June 30, 2021 and December 31, 2020, respectively.

Horace Mann Educators Corporation 22 Quarterly Report on Form 10-Q

NOTE 9 - Segment Information

The Company conducts and manages its business through five segments. The four operating segments, representing the major lines of business, are: Property and Casualty (primarily personal lines automobile and property insurance products), Supplemental (primarily cancer, heart, hospital, supplemental disability and accident coverages), Retirement (primarily tax-qualified fixed and variable annuities) and Life (life insurance products). The Company does not allocate the impact of corporate-level transactions to these operating segments, consistent with the basis for management's evaluation of the results of those segments, but classifies those items in the fifth segment, Corporate and Other. In addition to ongoing transactions such as corporate debt service, net investment gains (losses) and certain public company expenses, such items also have included corporate debt retirement costs, when applicable. Summarized financial information for these segments is as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Premiums and contract charges earned
Property and Casualty	$	155.0	$	156.2	$	310.8	$	322.7
Supplemental	31.6		33.3		63.3		66.3
Retirement	9.2		6.7		17.8		14.1
Life	30.0		29.2		61.5		58.6
Total	$	225.8	$	225.4	$	453.4	$	461.7
Net investment income
Property and Casualty	$	21.7	$	6.3	$	32.5	$	16.6
Supplemental	6.3		4.0		11.6		7.5
Retirement	62.0		55.1		122.4		108.6
Life	19.8		15.6		39.4		31.2
Corporate and Other	(0.1)		—		(0.1)		(0.1)
Intersegment eliminations	(0.5)		(0.6)		(1.1)		(1.1)
Total	$	109.2	$	80.4	$	204.7	$	162.7
Net income (loss)
Property and Casualty	$	19.3	$	11.3	$	47.2	$	37.9
Supplemental	12.0		9.5		23.4		20.0
Retirement	11.5		9.7		22.1		8.8
Life	5.0		1.9		5.7		2.5
Corporate and Other	(1.1)		(1.9)		(12.4)		(20.2)
Total	$	46.7	$	30.5	$	86.0	$	49.0

($ in millions)	June 30, 2021		December 31, 2020
Assets
Property and Casualty	$	1,313.2	$	1,324.9
Supplemental	855.0		811.5
Retirement	9,800.6		9,198.7
Life	2,142.9		2,044.5
Corporate and Other	158.9		182.3
Intersegment eliminations	(80.5)		(90.1)
Total	$	14,190.1	$	13,471.8

Horace Mann Educators Corporation 23 Quarterly Report on Form 10-Q

NOTE 10 - Accumulated Other Comprehensive Income (Loss)

AOCI represents the accumulated change in shareholders’ equity from transactions and other events and circumstances from non-shareholder sources. For the Company, AOCI includes the after tax change in net unrealized investment gains (losses) on fixed maturity securities and the after tax change in net funded status of benefit plans for the periods as shown in the Consolidated Statements of Changes in Shareholders’ Equity. The following table reconciles these components.

($ in millions)	Net Unrealized Investment  Gains (Losses)  on Securities(1)		Net Funded Status of Benefit Plans(1)		Total(1)
Beginning balance, April 1, 2021	$	243.6	$	(11.2)	$	232.4
Other comprehensive income (loss) before reclassifications	93.3		—		93.3
Amounts reclassified from AOCI(2)	(4.7)		—		(4.7)
Net current period other comprehensive income (loss)	88.6		—		88.6
Ending balance, June 30, 2021	$	332.2	$	(11.2)	$	321.0
Beginning balance, April 1, 2020	$	136.6	$	(10.7)	$	125.9
Other comprehensive income (loss) before reclassifications	147.5		—		147.5
Amounts reclassified from AOCI(3)	(5.0)		—		(5.0)
Net current period other comprehensive income (loss)	142.5		—		142.5
Ending balance, June 30, 2020	$	279.1	$	(10.7)	$	268.4
Beginning balance, January 1, 2021	$	366.3	$	(11.2)	$	355.1
Other comprehensive income (loss) before reclassifications	(35.8)		—		(35.8)
Amounts reclassified from AOCI(2)	1.7		—		1.7
Net current period other comprehensive income (loss)	(34.1)		—		(34.1)
Ending balance, June 30, 2021	$	332.2	$	(11.2)	$	321.0
Beginning balance, January 1, 2020	$	230.4	$	(10.7)	$	219.7
Other comprehensive income (loss) before reclassifications	43.0		—		43.0
Amounts reclassified from AOCI(3)	5.7		—		5.7
Net current period other comprehensive income (loss)	48.7		—		48.7
Ending balance, June 30, 2020	$	279.1	$	(10.7)	$	268.4

(1)All amounts are net of tax.

(2)The pretax amounts reclassified from AOCI, $5.9 million and $(2.2) million, are included in Net investment gains (losses) and the related income tax expenses, $1.2 million and $(0.5) million, are included in income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2021, respectively.

(3)    The pretax amounts reclassified from AOCI, $6.4 million and $(7.2) million, are included in Net investment gains (losses) and the related income tax expenses, $1.4 million and $(1.5) million, are included in Income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2020, respectively.

Comparative information for elements that are not required to be reclassified in their entirety to net income in the same reporting period is disclosed in Note 2.

Horace Mann Educators Corporation 24 Quarterly Report on Form 10-Q

NOTE 11 - Supplemental Consolidated Cash and Cash Flow Information

($ in millions)
	June 30, 2021		December 31, 2020
Cash	$	28.3	$	21.8
Restricted cash	1.1		0.5
Total cash and restricted cash reported in the Consolidated Balance Sheets	$	29.4	$	22.3

($ in millions)	Six Months Ended June 30,
	2021		2020
Cash paid (recovered) during the three months for:
Interest	$	6.8	$	8.2
Income taxes	13.4		(0.6)

Non-cash investing activities with respect to modifications or exchanges of fixed maturity securities as well as paid-in-kind activity for policy loans were insignificant for the three and six months ended June 30, 2021 and 2020, respectively.

ITEM 2. I Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

($ in millions, except per share data)

Measures within this MD&A that are not based on accounting principles generally accepted in the United States of America (non-GAAP) are marked with an asterisk (*) the first time they are presented within this Part I - Item 2. An explanation of these measures is contained in the Glossary of Selected Terms included as Exhibit 99.1 to this Quarterly Report on Form 10-Q and are reconciled to the most directly comparable measures prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) in the Appendix to the Company's Second Quarter 2021 Investor Supplement.

Increases or decreases in this MD&A that are not meaningful are marked "N.M.".

Forward-looking Information

Statements made in the following discussion 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 known and unknown risks, uncertainties and other factors. Horace Mann Educators Corporation (referred to in Part I - Items 2 - 4 and Part II of this report as "we", "our", "us", the "Company", "Horace Mann" or "HMEC") is an insurance holding company. We are not under any obligation to (and expressly disclaim 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 our actual results could differ materially from those projected in forward-looking statements due to a number of risks and uncertainties inherent in our business. See Part I - Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2020 for additional information regarding risks and uncertainties.

Introduction

The purpose of this MD&A is to provide an understanding of our consolidated results of operations and financial condition. This MD&A should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in Part I - Item 1 of this report.

HMEC is an insurance holding company, and through its subsidiaries, we market and underwrite personal lines of property and casualty insurance products, supplemental insurance products, retirement products and life insurance products in the United States of America (U.S.). We market our products primarily to K-12 teachers, administrators and other employees of public schools and their families.

Horace Mann Educators Corporation 25 Quarterly Report on Form 10-Q

This MD&A covers our consolidated financial highlights followed by consolidated results of operations, an outlook for future performance, details about critical accounting estimates, results of operations by segment, investment results and liquidity and capital resources.

On July 14, 2021, we entered into a definitive agreement to acquire all the equity interests in Madison National Life Insurance Company (Madison National) for $172.5 million. Madison National is a leading writer of employer-paid and sponsored benefits provided to educators by K-12 school districts. The transaction is expected to close early in the first quarter of 2022, subject to regulatory approval and other customary closing conditions. The transaction is expected to be funded with cash on hand and additional borrowings on our Bank Credit Facility which was extended to 2026 and expanded by $100.0 million to $325.0 million to provide ample liquidity. At closing, our leverage ratio is expected to be slightly below our long-term target of 25% which aligns with levels appropriate for our current financial strength ratings.

Madison National offers short- and long-term group disability, group life and other products, with K-12 school districts representing 80% of 2020 premiums. The acquisition of Madison National is expected to be immediately accretive to our EPS and ROE and is expected to accelerate our progress on all fronts of our multi-year strategic plan: strengthening our product offerings, enhancing our distribution, and adding capabilities to our infrastructure. With the addition of Madison National, we will be able to serve K-12 educators through a new distribution channel that is entirely complementary to our strengths in individual products sold through local, trusted advisors.

Coronavirus Disease (COVID-19) Considerations

Beginning in March 2020, the global pandemic associated with the novel coronavirus COVID-19 and related economic conditions introduced unprecedented challenges for our country. Those challenges are ongoing. We relied on our previously developed Corporate Pandemic Plan to address preparation, prevention and response measures specific to COVID-19 while allowing flexibility to quickly react to evolving circumstances and implement varying actions accordingly.

As discussed in our Annual Report on Form 10-K for the year ended December 31, 2020, we successfully met the challenges of the pandemic environment and are now operating in a hybrid model. Our return to office plans are being guided by data from the Center for Disease Control.

We continue to monitor cybersecurity including increasing security and network monitoring to proactively identify and prevent potential security threats and vulnerabilities. We also are identifying and assessing critical third-party vendors and ensuring their ability to continue to perform as anticipated.

Although educators have largely remained employed through the pandemic, growth in new sales has slowed since the pandemic began, particularly sales generated from in-person events at schools. We continue to work with our network of exclusive agents to make sure they are using virtual tools that can allow them to reach current and potential educator customers when face-to-face interactions are not possible. We are implementing a variety of new and modified forums to provide access to the financial solutions we offer educators.

For further discussion regarding the current period and potential future impacts of COVID-19 and related economic conditions on HMEC, see Outlook for 2021 and other content within this MD&A as well as Part I - Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2020.

Horace Mann Educators Corporation 26 Quarterly Report on Form 10-Q

Consolidated Financial Highlights

(All comparisons vs. same periods in 2020, unless noted otherwise)

($ in millions)	Three Months Ended June 30,				2021-2020		Six Months Ended June 30,						2021-2020
	2021		2020		Change %		2021			2020			Change %
Total revenues	$	347.1	$	314.9	10.2	%	$	669.1		$	622.2		7.5	%
Net income	46.7		30.5		53.1	%	86.0			49.0			75.5	%
Per diluted share:
Net income	1.11		0.73		52.1	%	2.04			1.17			74.4	%
Net investment gains (losses) after tax	0.09		0.06		N.M.		(0.08)			(0.28)			N.M.
Book value per share							$	43.78		$	39.69		10.3	%
Net income return on equity - last twelve months							9.8		%	6.9		%
Net income return on equity - annualized							9.5		%	6.1		%

For the three and six months ended June 30, 2021, net income increased $16.2 million and $37.0 million, respectively, primarily due to higher net investment income and a lower level of catastrophe losses.

Consolidated Results of Operations

(All comparisons vs. same periods in 2020, unless noted otherwise)

($ in millions)	Three Months Ended June 30,				2021-2020		Six Months Ended June 30,				2021-2020
	2021		2020		Change %		2021		2020		Change %
Premiums and contract charges earned	$	225.8	$	225.4	0.2	%	$	453.4	$	461.7	-1.8	%
Net investment income	109.2		80.4		35.8	%	204.7		162.7		25.8	%
Net investment gains (losses)	4.9		3.2		N.M.		(4.1)		(15.3)		N.M.
Other income	7.2		5.9		22.0	%	15.1		13.1		15.3	%
Total revenues	347.1		314.9		10.2	%	669.1		622.2		7.5	%
Benefits, claims and settlement expenses	147.1		143.0		2.9	%	281.4		281.7		-0.1	%
Interest credited	51.2		50.7		1.0	%	101.8		102.2		-0.4	%
Operating expenses	60.5		55.7		8.6	%	118.5		116.4		1.8	%
DAC unlocking and amortization expense	23.5		20.4		15.2	%	47.6		50.4		-5.6	%
Intangible asset amortization expense	3.2		3.7		-13.5	%	6.5		7.4		-12.2	%
Interest expense	3.5		4.0		-12.5	%	7.0		8.2		-14.6	%
Total benefits, losses and expenses	289.0		277.5		4.1	%	562.8		566.3		-0.6	%
Income before income taxes	58.1		37.4		55.3	%	106.3		55.9		90.2	%
Income tax expense	11.4		6.9		65.2	%	20.3		6.9		194.2	%
Net income	$	46.7	$	30.5	53.1	%	$	86.0	$	49.0	75.5	%

Premiums and Contract Charges Earned

For the three and six months ended June 30, 2021, premiums and contract charges earned increased $0.4 million and decreased $8.3 million, respectively. The decrease for the six months ended June 30, 2021 was primarily due to lower premiums earned by Property and Casualty.

Horace Mann Educators Corporation 27 Quarterly Report on Form 10-Q

Net Investment Income

Excluding accreted investment income on the deposit asset on reinsurance, for the three and six months ended June 30, 2021, net investment income increased $27.6 million and $40.1 million, respectively, as more favorable returns on limited partnership interests more than offset slightly lower yields on fixed maturity securities. Current year private equity returns have been strong, reflecting the strength of the equity markets and the active IPO window. Investment yields continue to be impacted by the low interest rate environment of recent years. The annualized investment yield on the portfolio excluding limited partnership interests* was as follows:

	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Investment yield, excluding limited partnership interests, pretax - annualized*	4.3%	4.4%	4.3%	4.5%
Investment yield, excluding limited partnership interests, after tax - annualized*	3.4%	3.5%	3.4%	3.6%

During the three and six months ended June 30, 2021, we continued to identify and purchase investments with attractive risk-adjusted yields relative to market conditions without venturing into asset classes or individual securities that would be inconsistent with our overall investment guidelines for the core portfolio. We also funded commercial mortgage loan funds and limited partnership interests in line with our intent to increase our allocation to this portion of our portfolio to increase yields while balancing principal protection and risk.

Net Investment Gains (Losses)

For the three and six months ended June 30, 2021, net investment gains (losses) were $1.7 million and $11.2 million higher than last year primarily due to favorable changes in fair value of equity securities and derivatives as well as gains realized from sales of fixed maturity securities. The breakdown of net investment gains (losses) by transaction type were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Impairments on investments recognized in net income	$	—	$	(0.5)	$	(3.2)	$	(4.2)
Sales and other, net	1.6		0.4		(0.5)		4.9
Change in fair value - equity securities	4.3		6.6		1.5		(7.9)
Change in fair value and losses realized on settlements - derivatives	(1.0)		(3.3)		(1.9)		(8.1)
Net investment gains (losses)	$	4.9	$	3.2	$	(4.1)	$	(15.3)

From time to time, we may sell fixed maturity securities subsequent to the reporting date that were considered temporarily impaired at such reporting date. Such sales are due to issuer specific events occurring subsequent to the reporting date that result in a change in our intent to sell a fixed maturity security.

Other Income

For the three and six months ended June 30, 2021, other income increased $1.3 million and $2.0 million, respectively, compared to the prior year period due to the impact of the strong financial markets on asset based fees.

Benefits, Claims and Settlement Expenses

For the three and six months ended June 30, 2021, benefits, claims and settlement expenses increased $4.1 million and decreased $0.3 million. Benefit expense for the current quarter is up due to an increase in underlying automobile and property loss experience partially offset by lower catastrophe losses.

Interest Credited

For the three and six months ended June 30, 2021, interest credited was relatively flat compared to the prior year periods. Under the deposit method of accounting, the interest credited on the reinsured annuity block continues to be reported. The average deferred annuity credited rate, excluding the reinsured annuity block, was 2.4% and 2.5% at June 30, 2021 and June 30, 2020, respectively.

Horace Mann Educators Corporation 28 Quarterly Report on Form 10-Q

Operating Expenses

For the three and six months ended June 30, 2021, operating expenses increased $4.8 million and $2.1 million, respectively. Targeted spend on product, distribution and infrastructure has increased, including costs incurred in performing due diligence on the planned acquisition of Madison National.

Deferred Policy Acquisition Costs (DAC) Unlocking and Amortization Expense

For the three and six months ended June 30, 2021, DAC unlocking and amortization expense increased $3.1 million and decreased $2.8 million, respectively, as market performance in the Retirement segment was more favorable in the prior year second quarter but more favorable for the first half of 2021.

Intangible Asset Amortization Expense

For the three and six months ended June 30, 2021, intangible asset amortization expense decreased $0.5 million and $0.9 million, respectively.

Interest Expense

For the three and six months ended June 30, 2021, interest expense decreased $0.5 million and $1.2 million, respectively, due to lower interest rates on our senior revolving credit facility.

Income Tax Expense

The effective income tax rate, including net investment gains (losses), was 19.1% and 12.3% for the six months ended June 30, 2021 and 2020, respectively. Income from investments in tax-advantaged securities reduced the effective income tax rates by 3.1 and 5.3 percentage points for the six months ended June 30, 2021 and 2020, respectively.

The tax effects of legislation enacted in 2020 due to the Coronavirus pandemic were reflected in our income tax expense calculations as of June 30, 2020. Total income tax expense for the six months ended June 30, 2020, included a benefit of $2.8 million (that reduced the effective income tax rate by 5.0 percentage points) to reflect a net operating loss carryback to taxable years for which the corporate rate was 35% as compared to the current corporate rate of 21%.

We record liabilities for uncertain tax filing positions where it is more likely than not that the position will not be sustainable upon audit by taxing authorities. These liabilities are reevaluated routinely and are adjusted appropriately based on changes in facts or law. We have no unrecorded liabilities from uncertain tax filing positions.

At June 30, 2021, our federal income tax returns for years prior to 2014 are no longer subject to examination by the Internal Revenue Service. We do not anticipate any assessments for tax years that remain subject to examination to have a material effect on our financial position or results of operations.

Outlook for 2021

The following discussion provides outlook information for our results of operations and capital position.

The impacts of the COVID-19 pandemic and related economic conditions on the Company’s results continue to be highly uncertain and outside the Company’s control. The scope, duration and magnitude of the direct and indirect effects of the pandemic continue to evolve in ways that are difficult or impossible to anticipate. For additional information on the risks posed by the pandemic, see “A large-scale pandemic, the occurrence of terrorism or military actions may have an adverse effect on our business” included in Part I—Item 1A—Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020.

At the time of issuance of this Quarterly Report on Form 10-Q, we estimate that 2021 full-year net income will be within a range of $3.50 to $3.70 per diluted share, generating a core return on equity* of over 10%. The outlook assumes a federal statutory corporate tax rate of 21%. On July 1, 2021, we increased our guidance from the range included in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021 because of strong second quarter net investment income and lower-than-guided second quarter catastrophe losses. The segment guidance discussed below also anticipates modest other changes in those businesses.

Horace Mann Educators Corporation 29 Quarterly Report on Form 10-Q

Investments

For 2021, we now anticipate total net investment income to be in the range of $385 million to $405 million, including approximately $100 million of accreted investment income on the deposit asset on reinsurance in the Retirement segment. The increased range largely reflects strong second quarter net investment income in all segments. The increase in second quarter net investment income was primarily due to higher-than-anticipated returns in our growing alternative investments portfolio, with the most significant impact to the Property and Casualty segment. Segment ranges noted below reflect the higher anticipated level of net investment income.

Property and Casualty Segment

We continue to anticipate premiums written* for 2021 to be below 2020 levels. We expect new sales* will remain under pressure while COVID-19 vaccines are being rolled out across the country, with a return to pre-pandemic sales levels likely to begin in the fourth quarter.

The pandemic’s impact on automobile loss costs continues in 2021, reflecting continued lower frequency related to new driving patterns, as well as a partial offset in severity, largely driven by inflation. Over the course of 2021, we anticipate loss ratios gradually rising toward our long-term target levels. Our outlook presumes that some changes to driving patterns will become permanent, but those would be offset by some of the non-inflationary factors that are increasing severity. Because of the inflationary component of the increase in loss costs over 2020, we are initiating appropriate rate filings in selected geographies.

For property, we anticipate the decrease in second quarter catastrophe costs will be offset by increases in the underlying loss ratio due to inflation and increased frequency of fire and non-weather water losses. To address this, we are now planning to file for property rate increases in the mid-single digits in many geographies in the second half of the year, above our original rate plan for 2021.

We continue to expect the Property and Casualty full-year combined ratio to be between 95% - 96%, which assumes catastrophe losses between $20 million and $25 million for the second half of the year. Primarily because of the impact of higher second quarter net investment income, net income for Property and Casualty for 2021 is now anticipated to be in the range of $66 million to $70 million.

Supplemental Segment

Our revised outlook for Supplemental's 2021 net income reflects a higher contribution from net investment income. We are also seeing the return to historical policyholder claims behavior occur more slowly than we had anticipated in this business. We now expect a full-year 2021 pre-tax profit margin better than our longer-term target of mid-20s percent. Including these factors, net income for Supplemental is now anticipated to be in the range of $41 million to $43 million.

Retirement Segment

We now expect Retirement to generate net income in the range of $43 to $45 million in 2021, above our original expectation because of higher net investment income from the alternatives portfolio.

Life Segment

We expect Life to generate net income between $14 million and $16 million in 2021, below our original expectation, as higher first quarter mortality costs offset the anticipated increases in full-year net investment income. Sales* are expected to gradually return to pre-pandemic levels.

As described in Critical Accounting Estimates, certain of our significant accounting measurements require the use of estimates and assumptions. As additional information becomes available, adjustments may be required. Those adjustments are charged or credited to net income for the period in which the adjustments are made and may impact actual results compared to our estimates above. Additionally, see Forward-looking Information in this Quarterly Report on Form 10-Q as well as Part I – Items 1 and 1A of our Annual Report on Form 10-K for the year ended December 31, 2020 concerning other important factors that could impact actual results. We believe that a projection of net income is not appropriate on a forward-looking basis because it is not possible to provide a valid forecast of net investment gains (losses), which can vary substantially from one period to another and may have a significant impact on net income.

Horace Mann Educators Corporation 30 Quarterly Report on Form 10-Q

Critical Accounting Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions based on information available at the time the consolidated financial statements are prepared. These estimates and assumptions affect the reported amounts of our consolidated assets, liabilities, shareholders' equity and net income. Certain accounting estimates are particularly sensitive because of their significance to our consolidated financial statements and because of the possibility that subsequent events and available information may differ markedly from management's judgments at the time the consolidated financial statements were prepared. We have discussed with the Audit Committee the quality, not just the acceptability, of our accounting principles as applied in our financial reporting. The discussions generally included such matters as the consistency of our accounting policies and their application, and the clarity and completeness of our consolidated financial statements, which include related disclosures. Information regarding our accounting policies pertaining to these topics is located in the Notes to the Consolidated Financial Statements contained in Part II - Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020.

We have identified the following accounting estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability:

•Valuation of hard-to-value fixed maturity securities, including evaluation of impairments

•Evaluation of goodwill and intangible assets for impairment

•Valuation of annuity and life deferred policy acquisition costs

•Valuation of liabilities for property and casualty unpaid claims and claim expenses

•Valuation of certain investment contract and policy reserves

Compared to December 31, 2020, at June 30, 2021, there were no material changes to accounting policies for areas most subject to significant management judgments identified above. In addition to disclosures in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020, discussion of accounting policies, including certain sensitivity information, was presented in Management's Discussion and Analysis of Financial Condition and Results of Operations -- Critical Accounting Estimates in that Form 10-K.

Results of Operations by Segment

Consolidated financial results primarily reflect the operating results of our four operating segments as well as the corporate and other segment. These reporting segments are defined based on financial information we use to evaluate performance and to determine the allocation of resources.

•Property and Casualty

•Supplemental

•Retirement

•Life

•Corporate and Other

The determination of segment data is described in more detail in Part I - Item 1, Note 9 of the Consolidated Financial Statements in this report. The following sections provide analysis and discussion of the results of operations for each of the reporting segments as well as investment results.

Horace Mann Educators Corporation 31 Quarterly Report on Form 10-Q

Property and Casualty

(All comparisons vs. same periods in 2020, unless noted otherwise)

For the three and six months ended June 30, 2021, net income reflected the following factors:

•Substantial increase in net investment income due to more favorable returns on limited partnership interests

•$4.2 million of favorable prior years' reserve development recognized in the second quarter of 2021

•Lower level of catastrophe losses experienced in 2021

•An increase in underlying loss costs

Horace Mann Educators Corporation 32 Quarterly Report on Form 10-Q

The following table provides certain financial information for Property and Casualty for the periods indicated.

($ in millions, unless otherwise indicated)	Three Months Ended June 30,						2021-2020		Six Months Ended June 30,						2021-2020
	2021			2020			Change		2021			2020			Change
Financial Data:
Premiums written*:
Automobile	$	97.8		$	96.7		1.1	%	$	197.0		$	206.1		-4.4	%
Property and other	57.8			59.4			-2.7	%	100.4			103.6			-3.1	%
Total premiums written	155.6			156.1			-0.3	%	297.4			309.7			-4.0	%
Change in unearned premiums	(0.6)			0.1			N.M.		13.4			13.0			3.1	%
Total premiums earned	155.0			156.2			-0.8	%	310.8			322.7			-3.7	%
Incurred claims and claims expenses:
Claims occurring in the current year	118.2			109.2			8.2	%	212.9			214.6			-0.8	%
Prior years' reserves favorable development	4.2			1.0			N.M.		4.2			2.0			110.0	%
Total claims and claim expenses incurred	114.0			108.2			5.4	%	208.7			212.6			-1.8	%
Operating expenses, including DAC amortization	39.9			40.9			-2.4	%	79.4			84.1			-5.6	%
Underwriting gain	1.1			7.1			-84.5	%	22.7			26.0			-12.7	%
Net investment income	21.7			6.3			244.4	%	32.5			16.6			95.8	%
Income before income taxes	24.0			14.1			70.2	%	58.4			43.9			33.0	%
Net income / core earnings*	19.3			11.3			70.8	%	47.2			37.9			24.5	%
Operating Statistics:
Automobile
Loss and loss adjustment expense ratio	67.6		%	53.2		%	14.4	pts	63.3		%	59.8		%	3.5	pts
Expense ratio	25.7		%	27.1		%	-1.4	pts	25.4		%	26.5		%	-1.1	pts
Combined ratio:	93.3		%	80.3		%	13.0	pts	88.7		%	86.3		%	2.4	pts
Prior years' reserve development	-3.0		%	—		%	-3.0	pts	-1.5		%	-0.5		%	-1.0	pts
Catastrophe losses	2.6		%	3.1		%	-0.5	pts	1.5		%	1.5		%	—	pts
Underlying combined ratio*	93.7		%	77.2		%	16.5	pts	88.7		%	85.3		%	3.4	pts
Property
Loss and loss adjustment expense ratio	84.8		%	99.1		%	-14.3	pts	74.5		%	77.8		%	-3.3	pts
Expense ratio	26.0		%	24.8		%	1.2	pts	26.0		%	25.5		%	0.5	pts
Combined ratio:	110.8		%	123.9		%	-13.1	pts	100.5		%	103.3		%	-2.8	pts
Prior years' reserve development	-2.3		%	-1.8		%	-0.5	pts	-1.1		%	-0.9		%	-0.2	pts
Catastrophe losses	27.9		%	57.9		%	-30.0	pts	24.1		%	36.8		%	-12.7	pts
Underlying combined ratio*	85.2		%	67.8		%	17.4	pts	77.5		%	67.4		%	10.1	pts
Risks in force (in thousands)
Automobile(1)									387			418			-7.4	%
Property									180			191			-5.8	%
Total									567			609			-6.9	%

(1)    Includes assumed risks in force of 4.

Horace Mann Educators Corporation 33 Quarterly Report on Form 10-Q

On a reported basis, the 2.4 point increase in the automobile combined ratio for the six months ended June 30, 2021 was mainly attributable to a 4.5 point increase in the automobile underlying loss ratio*. The increase in the automobile underlying loss ratio reflects a return to more normal driving patterns plus inflationary pressures that are increasing automobile loss costs in 2021. The reported property combined ratio improved 2.8 points for the six months ended June 30, 2021 due to lower catastrophe losses. However, the property underlying loss ratio* increased 9.6 points for the six months ended June 30, 2021 reflecting higher non-catastrophe fire losses and non-weather water losses as well as overall inflation due to the cost of labor and materials.

For the three and six months ended June 30, 2021, total premiums written* decreased $0.5 million and $12.3 million, respectively. For the remainder of 2021, we anticipate average rate increases in the low-single digits (including states with no rate actions) for both automobile and property for the full year. Average approved rate changes for the six months ended June 30, 2021 were insignificant. Sales* has slowed due to COVID-19.

For the three and six months ended June 30, 2021, automobile premiums written* increased $1.1 million and decreased $9.1 million, respectively, as the number of automobile risks in force has declined. Average premium written and average premium earned was down slightly, in part due to changes in miles driven. Educator risks as a percentage of overall automobile risks remained stable at 83.9% as of June 30, 2021.

For the three and six months ended June 30, 2021, property and other premiums written* decreased $1.6 million and $3.2 million, respectively, as the number of property risks in force has declined. Average premium written and average premium earned increased slightly in the first six months of 2021, but with inflationary pressure continuing, adjustments to coverage values and rates are expected to play a greater role in the coming quarters. Educator risks as a percentage of overall property risks remained stable at 81.6% as of June 30, 2021.

We continue to evaluate and implement actions to further mitigate our exposure in catastrophe-prone areas of the country. Such actions could include, but are not limited to, non-renewal of property policies, restricted agent geographic placement, limitations on agent new business sales, further tightening of underwriting standards and increased utilization of third-party vendor products.

Horace Mann Educators Corporation 34 Quarterly Report on Form 10-Q

Supplemental

(All comparisons vs. same periods in 2020, unless noted otherwise)

For the three and six months ended June 30, 2021, net income reflected the following factors:

•Favorable business trends including short-term benefit from changes in policyholder behavior due to COVID-19

•Improved net investment income driven by more favorable returns on limited partnership interests

The following table provides certain information for Supplemental for the periods indicated.

($ in millions, unless otherwise indicated)	Three Months Ended June 30,						2021-2020		Six Months Ended June 30,						2021-2020
	2021			2020			Change		2021			2020			Change
Financial Data:
Premiums written and contract deposits*	$	31.7		$	33.7		-5.9	%	$	63.3		$	66.3		-4.5	%
Premiums and contract charges earned	31.6			33.3			-5.1	%	63.3			66.3			-4.5	%
Net investment income	6.3			4.0			57.5	%	11.6			7.5			54.7	%
Benefits and settlement expenses	9.9			12.5			-20.8	%	19.6			23.0			-14.8	%
Operating expenses (includes DAC unlocking and amortization expense)	10.2			10.1			1.0	%	20.6			20.2			2.0	%
Intangible asset amortization expense	3.0			3.2			-6.3	%	5.9			6.4			-7.8	%
Income before income taxes	15.4			12.1			27.3	%	30.0			25.5			17.6	%
Net income / core earnings*	12.0			9.5			26.3	%	23.4			20.0			17.0	%
Operating Statistics:
Supplemental insurance in force (thousands)									282			298			-5.4	%
Benefits ratio(1)	31.3		%	37.5		%	-6.2	pts	31.0		%	34.7		%	-3.7	pts
Operating expense ratio(2)	26.5		%	26.6		%	-0.1	pts	27.0		%	26.9		%	0.1	pts
Pretax profit margin(2)	40.0		%	31.9		%	8.1	pts	39.4		%	34.0		%	5.4	pts
Persistency									90.7		%	89.3		%	1.4	pts

(1)    Benefits ratio measured to earned premium.

(2)    Operating expense ratio and pretax profit margin measured to total revenues.

For the three and six months ended June 30, 2021, Supplemental sales* were $1.2 million and $2.2 million, respectively, which continues to reflect limited school access because of the COVID-19 pandemic. Sales growth is expected to accelerate through the second half of 2021 with the anticipated return to in-person learning this fall. Persistency was up 1.4 points at 90.7%.

Net income reflected higher net investment income as well as favorable business trends including some continued short-term benefit from changes in policyholder behavior due to COVID-19. Segment expenses include the non-cash impact of amortization of intangible assets under purchase accounting that reduced net income by $3.0 million pretax. The pretax profit margin remains above management’s longer-term expectations because of the pandemic-related changes in policyholder behavior.

Horace Mann Educators Corporation 35 Quarterly Report on Form 10-Q

Retirement

(All comparisons vs. same periods in 2020, unless noted otherwise)

For the three and six months ended June 30, 2021, net income reflected the following factors:

•Strong annualized net interest spread on fixed annuities of 259 bps

•Continued growth in net annuity contract deposits* that increased $15.8 million for the six months ended June 30, 2021

Horace Mann Educators Corporation 36 Quarterly Report on Form 10-Q

The following table provides certain information for Retirement for the periods indicated.

($ in millions, unless otherwise indicated)	Three Months Ended June 30,				2021-2020		Six Months Ended June 30,						2021-2020
	2021		2020		Change		2021			2020			Change
Financial Data:
Contract charges earned	$	9.2	$	6.7	37.3	%	$	17.8		$	14.1		26.2	%
Net investment income	62.0		55.1		12.5	%	122.4			108.6			12.7	%
Interest credited	40.0		39.4		1.5	%	79.3			79.7			-0.5	%
Net interest margin without net investment gains (losses)	22.8		16.7		36.5	%	45.0			30.8			46.1	%
Net interest margin - reinsured block	(0.8)		(1.0)		20.0	%	(1.9)			(1.9)			—	%
Mortality loss and other reserve charges	1.6		1.2		33.3	%	2.7			2.8			-3.6	%
Operating expenses	15.7		13.9		12.9	%	31.7			30.1			5.3	%
DAC and intangible asset amortization expense, excluding DAC unlocking	5.1		4.8		6.3	%	10.6			10.0			6.0	%
DAC unlocking	(0.2)		(4.6)		95.7	%	(1.0)			(0.6)			-66.7	%
Income before income taxes	13.9		11.2		24.1	%	26.5			10.1			162.4	%
Net income	11.5		9.7		18.6	%	22.1			8.8			151.1	%
Core earnings*	11.5		9.7		18.6	%	22.1			8.8			151.1	%
Operating Statistics:
Net annuity contract deposits*
Variable	$	67.6	$	52.3	29.3	%	$	129.2		$	110.1		17.3	%
Fixed	49.8		49.3		1.0	%	94.0			97.3			-3.4	%
Total	117.4		101.6		15.6	%	223.2			207.4			7.6	%
Single	63.6		48.8		30.3	%	120.8			102.2			18.2	%
Recurring	53.8		52.8		1.9	%	102.4			105.2			-2.7	%
Total	117.4		101.6		15.6	%	223.2			207.4			7.6	%
Assets under administration (AUA)
Annuity assets under management(1)							5,173.1			4,324.3			19.6	%
Broker and advisory assets under administration							2,516.4			2,168.0			16.1	%
Recordkeeping assets under administration							1,629.9			1,460.5			11.6	%
Total							9,319.4			7,952.8			17.2	%
Persistency
Variable annuities							94.8		%	94.9		%	-0.1	pts
Fixed annuities							95.0		%	94.2		%	0.8	pts
Total							94.9		%	94.5		%	0.4	pts
Annuity contracts in force (thousands)							229			230			-0.4	%
Net interest spread on fixed annuities - YTD annualized (basis points)							259			168			91	bps

(1)    Amounts reported as of June 30, 2021 and June 30, 2020 exclude $818.9 million and $627.6 million, respectively, of assets under management held under modified coinsurance reinsurance.

For the six months ended June 30, 2021, net annuity contract deposits for variable and fixed annuities increased $15.8 million. Our relationships with educators often begins with our 403(b) retirement savings products, including our attractive annuity products, and we are encouraged by the cross-sell opportunities they provide. Cash value persistency remained strong at 94.8% for variable annuities and 95.0% for fixed annuities.

At June 30, 2021, annuity assets under management and variable assets under management, excluding amounts held under the modified coinsurance agreement, were up $848.8 million and $748.5, respectively, compared to a year ago primarily due to market appreciation and positive net inflows. Assets under administration, which includes Retirement Advantage® and other advisory and recordkeeping assets were up $1.4 billion from a year ago, as assets under management rose primarily due to strong market appreciation over the past 12 months. The year-to-date annualized net interest spread on fixed annuities, excluding reinsurance, increased 91 basis points, reflecting higher net investment income primarily due to returns on limited partnership interests.

Horace Mann Educators Corporation 37 Quarterly Report on Form 10-Q

We actively manage our interest rate risk exposure, considering a variety of factors, including earned interest rates, credited interest rates and the relationship between the expected durations of assets and liabilities. We estimate that over the next 12 months approximately $489.2 million of the Retirement and Life combined investment portfolio and related investable cash flows will be reinvested at current market rates. As interest rates remain at low levels, borrowers may prepay or redeem the securities with greater frequency in order to borrow at lower market rates, which could increase investable cash flows and exacerbate the reinvestment risk.

As a general guideline, for a 100 basis point decline in the average reinvestment rate and based on our existing policies and investment portfolio, the impact from investing in that lower interest rate environment could further reduce Retirement net investment income by approximately $1.9 million in year one and $5.6 million in year two, further reducing the annualized net interest spread on fixed annuities by approximately 6 basis points and 19 basis points in the respective periods, compared to the current period annualized net interest spread on fixed annuities. We could also consider potential changes in rates credited to policyholders, tempered by any restrictions on the ability to adjust policyholder rates due to minimum guaranteed crediting rates.

The expectation for future annualized net interest spreads on fixed annuities is also an important component in the amortization of DAC. In terms of the sensitivity of this amortization to the annualized net interest spread on fixed annuities, based on DAC as of June 30, 2021 and assuming all other assumptions are met, a 10 basis point deviation in the current year targeted annualized net interest rate spread on the fixed annuities assumption would impact amortization between $0.3 million and $0.4 million. This result may change depending on the magnitude and direction of any actual deviations but represents a range of reasonably likely experience for the noted assumption.

The annuity reinsurance agreement entered in the second quarter of 2019, which reinsured the $2.2 billion block of in force fixed annuities with a minimum crediting rate of 4.5%, helps mitigate the risk of not being able to generate appropriate spreads on the annuity business. Information regarding the interest crediting rates and balances equal to the minimum guaranteed rate for deferred annuity account values excluding the reinsured block is shown below.

($ in millions)	June 30, 2021
	Total Deferred Annuities				Deferred Annuities at Minimum Guaranteed Rate
	Percent of Total		Accumulated Value (AV)		Percent of Total Deferred Annuities AV		Percent of Total		Accumulated Value
Minimum guaranteed interest rates:
Less than 2%	55.1	%	$	1,386.0	60.3	%	43.5	%	$	835.2
Equal to 2% but less than 3%	11.4	%	286.8		83.5	%	12.5	%	239.4
Equal to 3% but less than 4%	24.8	%	624.7		99.9	%	32.6	%	624.3
Equal to 4% but less than 5%	6.7	%	169.3		100.0	%	8.8	%	169.3
5% or higher	2.0	%	50.0		100.0	%	2.6	%	50.0
Total	100.0	%	$	2,516.8	76.2	%	100.0	%	$	1,918.2

We will continue to be disciplined in executing strategies to mitigate the negative impact on profitability of a sustained low interest rate environment. However, the success of these strategies may be affected by the factors discussed in Part I - Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2020 and other factors in this report.

Horace Mann Educators Corporation 38 Quarterly Report on Form 10-Q

Life

(All comparisons vs. same periods in 2020, unless noted otherwise)

For the three and six months ended June 30, 2021, net income reflected the following factors:

•Higher net investment income driven by favorable returns on limited partnership interests

•Higher premiums and contract charges earned

•Higher mortality costs for the six month period

The following table provides certain information for Life for the periods indicated.

($ in millions, unless otherwise indicated)	Three Months Ended June 30,				2021-2020		Six Months Ended June 30,						2021-2020
	2021		2020		Change		2021			2020			Change
Financial Data:
Premiums written and contract deposits*	$	29.5	$	27.6	6.9	%	$	54.7		$	52.4		4.4	%
Premiums and contract charges earned	30.0		29.2		2.7	%	61.5			58.6			4.9	%
Net investment income	19.8		15.6		26.9	%	39.4			31.2			26.3	%
Benefits and settlement expenses	21.6		21.1		2.4	%	50.4			43.3			16.4	%
Interest credited	11.2		11.3		-0.9	%	22.4			22.5			-0.4	%
Operating expenses	9.2		8.3		10.8	%	17.5			17.4			0.6	%
DAC amortization expense, excluding unlocking	2.0		2.0		—	%	3.8			3.9			-2.6	%
DAC unlocking	(0.2)		(0.2)		—	%	—			(0.3)			100.0	%
Income before income taxes	6.1		2.3		165.2	%	7.0			3.0			133.3	%
Net income / core earnings*	5.0		1.9		163.2	%	5.7			2.5			128.0	%
Operating Statistics:
Life insurance in force							$	20,122		$	19,565		2.8	%
Number of policies in force (thousands)							200			201			-0.5	%
Average face amount in force (in dollars)							$	100,529		$	97,306		3.3	%
Lapse ratio (ordinary life insurance in force)							4.0		%	4.2		%	-0.2	pts
Mortality costs							$	23.1		$	19.3		19.7	%

For the three and six months ended June 30, 2021, annualized sales* were unchanged on steady new sales of recurring term and whole life policies. Full-year persistency for life products of 96.0% remains in line with prior year periods. Mortality costs returned to historical levels for the current quarter, compared to higher mortality costs experienced in the first quarter of 2021.

Horace Mann Educators Corporation 39 Quarterly Report on Form 10-Q

Corporate and Other

(All comparisons vs. same periods in 2020, unless noted otherwise)

The following table provides certain financial information for Corporate and Other for the periods indicated.

($ in millions)	Three Months Ended June 30,				2021-2020		Six Months Ended June 30,				2021-2020
	2021		2020		Change %		2021		2020		Change %
Interest expense	$	3.5	$	3.9	-10.3	%	$	6.9	$	7.9	-12.7	%
Net investment gains (losses) pretax	4.9		3.2		N.M.		(4.1)		(15.3)		N.M.
Tax on net investment gains (losses)	1.0		0.7		N.M.		(0.9)		(3.3)		N.M.
Net investment gains (losses) after tax	3.9		2.5		N.M.		(3.2)		(12.0)		N.M.
Net loss	(1.1)		(1.9)		42.1	%	(12.4)		(20.2)		38.6	%
Core earnings (loss)*	(5.0)		(4.4)		-13.6	%	(9.2)		(8.2)		-12.2	%

For the three and six months ended June 30, 2021, the net losses decreased primarily due to changes in net investment gains (losses).

Investment Results

(All comparisons vs. same periods in 2020, unless noted otherwise)

Our investment strategy is primarily focused on generating income to support product liabilities, and balances principal protection and risk. Total net investment income includes net investment income from our investment portfolio as well as accreted investment income from the deposit asset on reinsurance related to our reinsured block of approximately $2.4 billion of fixed annuity liabilities related to legacy individual policies written in 2002 or earlier.

($ in millions)	Three Months Ended June 30,				2021-2020		Six Months Ended June 30,				2021-2020
	2021		2020		Change %		2021		2020		Change %
Net investment income - investment portfolio	$	84.1	$	56.5	48.8	%	$	155.2	$	115.1	34.8	%
Investment income - deposit asset on reinsurance	25.1		23.9		5.0	%	49.5		47.6		4.0	%
Total net investment income	109.2		80.4		35.8	%	204.7		162.7		25.8	%
Pretax net investment gains (losses)	4.9		3.2		N.M.		(4.1)		(15.3)		N.M.
Pretax net unrealized investment gains on fixed maturity securities							505.6		417.6		21.1	%

Excluding accreted investment income on the deposit asset on reinsurance, net investment income increased $27.6 million and $40.1 million for the three and six months ended June 30, 2021, as more favorable returns on limited partnership interests continued to offset slightly lower yields on fixed maturity securities.

For the three and six months ended June 30, 2021, pretax net investment gains (losses) increased $1.7 million and $11.2 million primarily because of favorable changes in fair value of equity securities and derivatives as well as gains realized from the sale of fixed maturity securities. Pretax net unrealized investment gains on fixed maturity securities were down $51.1 million compared to December 31, 2020, reflecting a 56 basis points increase in the 10-year U.S. Treasury yield that more than offset tighter credit spreads across most asset classes.

Horace Mann Educators Corporation 40 Quarterly Report on Form 10-Q

Fixed Maturity and Equity Securities Portfolios

The table below presents our fixed maturity and equity securities portfolios by major asset class, including the 10 largest sectors of our corporate bond holdings (based on fair value).

($ in millions)	June 30, 2021
	Number of Issuers	Fair Value		Amortized Cost, net		Pretax Net Unrealized Gain (Loss)
Fixed maturity securities
Corporate bonds
Banking and Finance	151	$	514.0	$	471.0	$	43.0
Insurance	54	198.4		174.0		24.4
Energy(1)	82	193.7		176.1		17.6
Healthcare, Pharmacy	89	179.6		164.4		15.2
Real Estate	45	138.6		131.0		7.6
Utilities	74	137.9		126.6		11.3
Transportation	52	127.0		117.5		9.5
Miscellaneous	32	123.2		122.2		1.0
Food and Beverage	38	100.3		87.8		12.5
Technology	47	96.0		89.9		6.1
All other corporates(2)	367	600.1		550.8		49.3
Total corporate bonds	1,031	2,408.8		2,211.3		197.5
Mortgage-backed securities
U.S. Government and federally sponsored agencies	261	467.4		426.8		40.6
Commercial(3)	130	328.6		298.1		30.5
Other	40	42.4		42.6		(0.2)
Municipal bonds(4)	612	1,799.1		1,598.6		200.5
Government bonds
U.S.	39	456.2		430.5		25.7
Foreign	7	44.4		40.2		4.2
Collateralized loan obligations(5)	177	671.4		668.3		3.1
Asset-backed securities	107	336.7		333.0		3.7
Total fixed maturity securities	2,404	$	6,555.0	$	6,049.4	$	505.6
Equity securities
Non-redeemable preferred stocks	26	$	114.3
Common stocks	93	9.1
Closed-end fund	1	22.3
Total equity securities	120	$	145.7
Total	2,524	$	6,700.7

(1)At June 30, 2021, the fair value amount included $372.6 million which were non-investment grade.

(2)The All other corporates category contains 20 additional industry sectors. Broadcasting and media, consumer products, telecommunications, metal and mining, and retail represented $292.2 million of fair value at June 30, 2021, with the remaining 15 sectors each representing less than $258.8 million.

(3)At June 30, 2021, 100% were investment grade, with an overall credit rating of AA+, and the positions were well diversified by property type, geography and sponsor.

(4)Holdings are geographically diversified, 50.9% are tax-exempt and 77.0% are revenue bonds tied to essential services, such as mass transit, water and sewer. The overall credit quality of the municipal bond portfolio was AA- at June 30, 2021.

(5)Based on fair value, 93.7% of the collateralized loan obligation securities were rated investment grade by Standard and Poor's Global Inc. (S&P), Moody's Investors Service, Inc. (Moody's) and/or Fitch Ratings, Inc. (Fitch) at June 30, 2021.

Horace Mann Educators Corporation 41 Quarterly Report on Form 10-Q

At June 30, 2021, our diversified fixed maturity securities portfolio consisted of 3,822 investment positions, issued by 2,404 entities, and totaled approximately $6.6 billion in fair value. This portfolio was 87.8% investment grade, based on fair value, with an average quality rating of A+. Our investment guidelines target single corporate issuer concentrations to 0.5% of invested assets for AAA or AA rated securities, 0.35% of invested assets for A or BBB rated securities, and $5.0 million for non-investment grade securities.

Rating of Fixed Maturity Securities and Equity Securities(1)

The following table presents the composition and fair value of our fixed maturity and equity securities portfolios by rating category. At June 30, 2021, 87.4% of these combined portfolios were investment grade, based on fair value, with an overall average quality rating of A+. We have classified the entire fixed maturity securities portfolio as available for sale, which is carried at fair value.

($ in millions)	Percent of Portfolio Fair Value				June 30, 2021
	December 31, 2020		June 30, 2021		Fair Value		Amortized Cost, net
Fixed maturity securities
AAA	11.6	%	10.2	%	$	667.9	$	643.7
AA(2)	40.0	%	38.1	%	2,495.9		2,278.5
A	18.7	%	17.6	%	1,153.6		1,045.3
BBB	21.2	%	22.0	%	1,440.7		1,311.6
BB	2.4	%	2.8	%	182.5		172.4
B	1.1	%	1.3	%	90.1		88.3
CCC or lower	0.1	%	0.1	%	5.3		5.5
Not rated(3)	4.9	%	7.9	%	519.0		504.1
Total fixed maturity securities	100.0	%	100.0	%	$	6,555.0	$	6,049.4
Equity securities
AAA	—	%	—	%	$	—
AA	—	%	—	%	—
A	0.7	%	0.5	%	0.8
BBB	62.2	%	68.2	%	99.3
BB	10.9	%	9.1	%	13.2
B	—	%	—	%	—
CCC or lower	—	%	—	%	—
Not rated	26.2	%	22.2	%	32.4
Total equity securities	100.0	%	100.0	%	$	145.7
Total					$	6,700.7

(1)Ratings are as assigned primarily by S&P when available, with remaining ratings as assigned on an equivalent basis by Moody's or Fitch. Ratings for publicly traded securities are determined when the securities are acquired and are updated monthly to reflect any changes in ratings.

(2)At June 30, 2021, the AA rated fair value amount included $446.7 million of U.S. Government and federally sponsored agency securities and $668.6 million of mortgage-backed and other asset-backed securities issued by U.S. Government and federally sponsored agencies.

(3)This category primarily represents private placement and municipal securities not rated by either S&P, Moody's or Fitch.

At June 30, 2021, the fixed maturity securities portfolio had $23.7 million of pretax gross unrealized investment losses on $734.7 million of fair value related to 421 positions. Of the investment positions with gross unrealized losses, there were 14 trading below 80.0% of the carrying value at June 30, 2021.

We view the pretax gross unrealized investment losses of all our fixed maturity securities at June 30, 2021 as temporary. Future changes in circumstances related to these and other securities could require subsequent recognition of impairment.

Horace Mann Educators Corporation 42 Quarterly Report on Form 10-Q

Liquidity and Capital Resources

Off-Balance Sheet Arrangements

At June 30, 2021 and 2020, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we engaged in such relationships.

Investments

Information regarding our investment portfolio, which is comprised primarily of investment grade fixed maturity securities, is presented in Part I - Item 1, Note 2 of the Consolidated Financial Statements as well as Part I - Item 2 - Investments Results in this report.

Cash Flow

Our short-term liquidity requirements, within a 12 month operating cycle, are for the timely payment of claims and benefits to policyholders, operating expenses, interest payments and federal income taxes. Cash flow generated from operations has been, and is expected to be, adequate to meet our operating cash needs in the next 12 months. Cash flow in excess of operational needs has been used to fund business growth, pay dividends to shareholders and repurchase shares of our common stock. Long-term liquidity requirements, beyond one year, are principally for the payment of future insurance and annuity policy claims and benefits, as well as retirement of debt. The following table summarizes our consolidated cash flows activity for the periods indicated.

($ in millions)	Six Months Ended June 30,				2021-2020
	2021		2020		Change %
Net cash provided by operating activities	$	116.6	$	165.6	-29.6	%
Net cash used in investing activities	(343.1)		(195.0)		-75.9	%
Net cash provided by financing activities	233.6		86.3		170.7	%
Net increase in cash	7.1		56.9		-87.5	%
Cash at beginning of period	22.3		25.5		-12.5	%
Cash at end of period	$	29.4	$	82.4	-64.3	%

Operating Activities

As a holding company, we conduct our principal operations in the personal lines segment of the property and casualty, supplemental and life insurance industries through our subsidiaries. Our insurance subsidiaries generate cash flow from premium and investment income, generally well in excess of their immediate needs for policy obligations, operating expenses and other cash requirements. Cash provided by operating activities primarily reflects net cash flows generated by the insurance subsidiaries.

For the six months ended June 30, 2021, net cash provided by operating activities decreased $49.0 million, primarily due to higher claims paid on insurance policies partially offset by higher investment income collected.

Investing Activities

Our insurance subsidiaries maintain significant investments in fixed maturity securities to meet future contractual obligations to policyholders. In conjunction with our management of liquidity and other asset/liability management objectives, we, from time to time, will sell fixed maturity securities prior to maturity, and reinvest the proceeds into other investments with different interest rates, maturities or credit characteristics. Accordingly, we have classified the entire fixed maturity securities portfolio as available for sale.

Horace Mann Educators Corporation 43 Quarterly Report on Form 10-Q

Financing Activities

Financing activities include primarily payment of dividends, receipt and withdrawal of funds by annuity contractholders, changes in the deposit asset on reinsurance, issuances and repurchases of our common stock, fluctuations in book overdraft balances, and borrowings, repayments and repurchases related to debt facilities.

For the six months ended June 30, 2021, net cash provided by financing activities increased $147.3 million compared to the prior year period, primarily due to a $267.0 million increase in cash inflows from advances received under Federal Home Loan Bank of Chicago (FHLB) funding agreements partially offset by a $25.0 million principal repayment on FHLB borrowings.

The following table shows activity from FHLB funding agreements for the periods indicated.

($ in millions)	Six Months Ended June 30,				2021-2020		2021-2020
	2021		2020		Change $		Change %
Balance at beginning of the period	$	590.5	$	495.0	$	95.5	19.3	%
Advances received from FHLB funding agreements	267.0		95.5		171.5		179.6	%
Principal repayments on FHLB funding agreements	—		—		—		N.M.
Balance at end of the period	$	857.5	$	590.5	$	267.0	45.2	%

Horace Mann Educators Corporation 44 Quarterly Report on Form 10-Q

Liquidity Sources and Uses

Our potential sources and uses of funds principally include the following activities:

	Property and Casualty	Supplemental	Retirement	Life	Corporate and Other
Activities for potential sources of funds
Receipt of insurance premiums, contractholder charges and fees	☑	☑	☑	☑
Recurring service fees, commissions and overrides	☑	☑	☑	☑	☑
Contractholder fund deposits		☑	☑	☑
Reinsurance and indemnification program recoveries	☑	☑	☑	☑
Receipts of principal, interest and dividends on investments	☑	☑	☑	☑	☑
Sales of investments	☑	☑	☑	☑	☑
Funds from FHLB and line of credit agreements	☑	☑	☑	☑	☑
Intercompany loans	☑	☑	☑	☑	☑
Capital contributions from parent	☑	☑	☑	☑
Dividends or return of capital from subsidiaries					☑
Tax refunds/settlements	☑	☑	☑	☑	☑
Funds from periodic issuance of additional securities					☑
Proceeds from debt issuances					☑
Receipt of intercompany settlements related to employee benefit plans					☑
Activities for potential uses of funds
Payment of claims and related expenses	☑	☑	☑	☑
Payment of contract benefits, surrenders and withdrawals		☑	☑	☑
Reinsurance cessions and indemnification program payments	☑	☑	☑	☑
Operating costs and expenses	☑	☑	☑	☑	☑
Purchase of investments	☑	☑	☑	☑	☑
Repayment of FHLB and line of credit agreements	☑	☑	☑	☑	☑
Payment or repayment of intercompany loans	☑	☑	☑	☑	☑
Capital contributions to subsidiaries					☑
Dividends or return of capital to shareholders/parent company	☑	☑	☑	☑	☑
Tax payments/settlements	☑	☑	☑	☑	☑
Common share repurchases					☑
Debt service expenses and repayment					☑
Payments related to employee benefit plans					☑
Payments for acquisitions					☑

We actively manage our financial position and liquidity levels in light of changing market, economic and business conditions. Liquidity is managed at both the entity and enterprise level across HMEC and is assessed on both base and stressed level liquidity needs. We believe we have sufficient liquidity to meet these needs. Additionally, we have existing intercompany agreements in place that facilitate liquidity management across HMEC to enhance flexibility.

Horace Mann Educators Corporation 45 Quarterly Report on Form 10-Q

As of June 30, 2021, we held $1.2 billion of cash, U.S. government and agency fixed maturity securities and public equity securities (excluding non-redeemable preferred stocks and foreign equity securities) which, under normal market conditions, could be rapidly liquidated.

Certain remote events and circumstances could constrain our liquidity. Those events and circumstances include, for example, a catastrophe resulting in extraordinary losses, a downgrade of our Senior Notes rating to non-investment grade status or a downgrade in our insurance subsidiaries' financial strength ratings. The rating agencies also consider the interdependence of our individually rated entities; therefore, a rating change in one entity could potentially affect the ratings of other related entities.

Capital Resources

We have determined the amount of capital that is needed to adequately fund and support business growth, primarily based on risk-based capital formulas, including those developed by the National Association of Insurance Commissioners. Historically, our insurance subsidiaries have generated capital in excess of such needed levels. These excess amounts have been paid to us through dividends. We have then utilized these dividends and our access to the capital markets to fund growth initiatives, service and retire debt, pay dividends to our shareholders, repurchase shares of our common stock and for other corporate purposes. If necessary, we also have other potential sources of liquidity that could provide for additional funding to meet corporate obligations or pay shareholder dividends, including a revolving line of credit, as well as issuances of various securities.

The insurance subsidiaries are subject to various regulatory restrictions that limit the amount of annual dividends or other distributions, including loans or cash advances, available to us without prior approval of the insurance regulatory authorities. The aggregate amount of dividends that may be paid in 2021 from all of our insurance subsidiaries without prior regulatory approval is $161.9 million, excluding the impact and timing of prior dividends, of which $24.0 million was paid during the six months ended June 30, 2021. We anticipate that our sources of capital will continue to generate sufficient capital to meet the needs for business growth, debt interest payments, shareholder dividends and our share repurchase program. Additional information is contained in Part II - Item 8, Note 13 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020.

Total capital was $2,230.1 million at June 30, 2021, including $413.5 million of short-term and long-term debt. Total debt represented 18.5% of total capital including net unrealized investment gains on fixed maturity securities (21.8% excluding net unrealized investment gains on fixed maturity securities*) at June 30, 2021, which was below our long-term target of 25%.

Shareholders' equity was $1,816.6 million at June 30, 2021, including net unrealized investment gains on fixed maturity securities of $332.2 million after taxes and the related impact of DAC associated with annuity contracts and life insurance products with account values. The market value of our common stock and the market value per share were $1,552.6 million and $37.42, respectively, at June 30, 2021. Book value per share was $43.78 at June 30, 2021 ($35.78 excluding net unrealized investment gains on fixed maturity securities*).

Additional information regarding net unrealized investment gains on fixed maturity securities at June 30, 2021 is included in Part I - Item 1, Note 2 of the Consolidated Financial Statements as well as in Part I - Item 2 - Investment Results in this report.

Total shareholder dividends paid was $25.7 million for the six months ended June 30, 2021. In March and May 2021, the Board of Directors (Board) approved regular quarterly dividends of $0.31 per share.

For the six months ended June 30, 2021, we repurchased 39,685 shares of our common stock at an average price per share of $38.43 under our share repurchase program, which is further described in Part II - Item 8, Note 12 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020. As of June 30, 2021, $19.1 million remained authorized for future share repurchases under the share repurchase program.

Horace Mann Educators Corporation 46 Quarterly Report on Form 10-Q

The following table summarizes our debt obligations.

($ in millions)	Interest Rates	Final Maturity	June 30, 2021		December 31, 2020
Short-term debt
Bank Credit Facility	Variable	2024	$	135.0	$	135.0
Long-term debt(1)
4.50% Senior Notes, Aggregate principal amount of $250.0 less unaccrued discount of $0.3 and $0.4 and unamortized debt issuance costs of $1.2 and $1.3	4.50%	2025	248.5		248.3
FHLB borrowings	0.37%	2022	30.0		54.0
Total			$	413.5	$	437.3

(1)    We designate debt obligations as "long-term" based on maturity date at issuance.

As of June 30, 2021, we had outstanding $250.0 million aggregate principal amount of 4.50% Senior Notes (Senior Notes), which will mature on December 1, 2025, issued at a discount resulting in an effective yield of 4.53%. Interest on the Senior Notes is payable semi-annually at a rate of 4.50%. Detailed information regarding the redemption terms of the Senior Notes is contained in the Part II - Item 8, Note 9 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020. The Senior Notes are traded in the open market (HMN 4.50).

As of June 30, 2021, we had $30.0 million of borrowings outstanding with FHLB. The Board has authorized a maximum amount equal to 15% of net aggregate admitted assets less separate account assets of the insurance subsidiaries for FHLB borrowing and funding agreements which is below our maximum FHLB borrowing capacity. For the total $30.0 million received, $5.0 million matures on May 16, 2022 and $25.0 million matures on December 2, 2022. Interest on the borrowings accrue at an annual weighted average rate of 0.37% as of June 30, 2021. The $30.0 million of FHLB borrowings is reported as Long-term debt in the Consolidated Balance Sheets.

On June 21, 2019, we, as borrower, replaced our current line of credit with a new five-year Credit Agreement (Bank Credit Facility). The new Bank Credit Facility increased the amount available on this senior revolving credit facility to $225.0 million from $150.0 million. PNC Capital Markets, LLC and JPMorgan Chase Bank, N.A. served as joint leads on the new agreement, with The Northern Trust Company, U.S. Bank National Association, KeyBank National Association, Comerica Bank and Illinois National Bank participating in the syndicate. Terms and conditions of the new Bank Credit Facility are substantially consistent with the prior agreement, with an interest rate based on LIBOR plus 115 basis points.

As of June 30, 2021, the amount outstanding on the senior revolving credit facility was $135.0 million. The $90.0 million unused portion of the Bank Credit Facility is available for use and subject to a variable commitment fee, which was 0.15% on an annual basis at June 30, 2021.

Effective July 12, 2021, we amended our Bank Credit Facility to increase the line of credit available under the senior revolving credit facility from $225.0 million to $325.0 million. We expect to utilize the senior revolving credit facility to fund a portion of the acquisition of Madison National, as well as to be available for ongoing working capital, capital expenditures and general corporate expenditures.

To provide additional capital management flexibility, we filed a "universal shelf" registration statement on Form S-3 with the Securities and Exchange Commission (SEC) on March 10, 2021. The registration statement, which registered the offer and sale from time to time of an indeterminate amount of various securities, which may include debt securities, common stock, preferred stock, depositary shares, warrants, delayed delivery contracts and/or units that include any of these securities, was automatically effective on March 10, 2021. Unless withdrawn by us earlier, this registration statement will remain effective through March 10, 2024. No securities associated with the registration statement have been issued at the time of issuance of this Quarterly Report on Form 10-Q.

On March 13, 2018, we filed a "shelf" registration statement on Form S-4 with the SEC which became effective on May 2, 2018. Under this registration statement, we may from time to time offer and issue up to 5,000,000 shares of our common stock in connection with future acquisitions of other businesses, assets or securities. Unless withdrawn by us, this registration statement will remain effective indefinitely. No securities associated with the registration statement have been issued at the time of issuance of this Quarterly Report on Form 10-Q.

Horace Mann Educators Corporation 47 Quarterly Report on Form 10-Q

Financial Ratings

Our principal insurance subsidiaries are rated by AM Best Company, Inc. (AM Best), Fitch, Moody's and S&P. These rating agencies have also assigned ratings to our Senior Notes. The ratings that are assigned by these agencies, which are subject to change, can impact, among other things, our access to sources of capital, cost of capital, and competitive position. These ratings are not a recommendation to buy or hold any of our securities.

Following our July 14 announcement of the planned acquisition of Madison National, AM Best, Fitch and Moody's affirmed our ratings. Among other observations, the agencies noted that, following the close of the transaction, capitalization and leverage metrics are expected to remain in line with rating expectations and the addition of Madison National is expected to improve Horace Mann's value proposition for the education market and further diversify the business.

All four agencies currently have assigned equivalent insurance financial strength ratings to our Property and Casualty and Life insurance subsidiaries. Only AM Best currently rates our Supplemental segment's subsidiaries, and the firm upgraded those ratings on July 14 to align with those of our other subsidiaries. AM Best noted that the upgrade reflects NTA Life's balance sheet strength as well as the support it receives from the parent company and the full integration of their operations within Horace Mann. Assigned ratings and respective affirmation/review dates as of July 31, 2021 were as follows:

	Insurance Financial				Affirmed/
	Strength Ratings (Outlook)		Debt Ratings (Outlook)		Reviewed
AM Best					7/14/2021
HMEC (parent company)	N.A.		bbb	(stable)
HMEC's Life subsidiary	A	(stable)	N.A.
HMEC's Property and Casualty subsidiaries	A	(stable)	N.A.
HMEC's Supplemental subsidiaries	A	(stable)	N.A.
Fitch	A	(stable)	BBB	(stable)	7/14/2021
Moody's	A2	(stable)	Baa2	(stable)	7/14/2021
S&P	A	(stable)	BBB	(stable)	2/18/2021

Reinsurance Programs

Information regarding the reinsurance programs for our Property and Casualty, Supplemental, Retirement and Life segments is located in Part II - Item 8, Note 5 and Note 8 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020.

ITEM 3. I Quantitative and Qualitative Disclosures about Market Risk

Market value risk, our primary market risk exposure, is the risk that our invested assets will decrease in value. This decrease in value may be due to (1) a change in the yields realized on our assets and prevailing market yields for similar assets, (2) an unfavorable change in the liquidity of an investment, (3) an unfavorable change in the financial prospects of the issuer of an investment, or (4) a downgrade in the credit rating of the issuer of an investment. Also see Consolidated Results of Operations in Part I - Item 2 of this report regarding net investment gains (losses).

Horace Mann Educators Corporation 48 Quarterly Report on Form 10-Q

Significant changes in interest rates expose us to the risk of experiencing losses or earning a reduced level of income based on the difference between the interest rates earned on our investments and the credited interest rates on our insurance and investment contract liabilities. Also see Consolidated Results of Operations in Part I - Item 2 of this report regarding interest credited to policyholders.

We seek to manage our market value risk by coordinating the projected cash inflows of assets with the projected cash outflows of liabilities. For all of our assets and liabilities, we seek to maintain reasonable durations, consistent with the maximization of income without sacrificing investment quality, while providing for liquidity and diversification. The investment risk associated with variable annuity deposits and the underlying mutual funds is assumed by those contractholders, and not by us. Certain fees that we earn from variable annuity deposits are based on the market value of the funds deposited.

More detailed descriptions of our exposure to market value risks and the management of those risks is contained in Part II - Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2020.

ITEM 4. I Controls and Procedures

Management's Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 as amended (Exchange Act), as of June 30, 2021. Based on this evaluation, the chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) that is required to be included in our periodic SEC filings. No material weaknesses in our disclosure controls and procedures were identified in the evaluation and therefore, no corrective actions were taken. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Horace Mann Educators Corporation 49 Quarterly Report on Form 10-Q

PART II: OTHER INFORMATION

ITEM 1A. I Risk Factors

At the time of issuance of this Quarterly Report on Form 10-Q, we believe there are no material changes from the risk factors as previously disclosed in Part I - Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020.

ITEM 2. I Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On September 30, 2015, the Board authorized a share repurchase program allowing repurchases of up to $50.0 million of our common stock, par value $0.001 (Program). The Program authorizes the repurchase of our common stock in open market or privately negotiated transactions, from time to time, depending on market conditions. The Program does not have an expiration date and may be limited or terminated at any time without notice. During the three months ended June 30, 2021, we repurchased shares of our common stock under the Program as follows:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased under the Program	Approximate Dollar Value  of Shares that may yet be Purchased under the Program
April 1 - 30	—	—		—	$	19.1	million
May 1 - 31	—	—		—	$	19.1	million
June 1 - 30	200	$	37.01	200	$	19.1	million
Total	200	$	37.01	200	$	19.1	million

ITEM 5. I Other Information

Not applicable.

ITEM 6. I Exhibits

The following items are filed as Exhibits. Management contracts and compensatory plans are indicated by an asterisk (*).

Exhibit
No.	Description
(3) Articles of incorporation and bylaws:
3.1	Restated Certificate of Incorporation of HMEC, filed with the Delaware Secretary of State on June 24, 2003, incorporated by reference to Exhibit 3.1 to HMEC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003, filed with the Securities and Exchange Commission (the "SEC") on August 14, 2003.
3.2	Bylaws of HMEC, incorporated by reference to Exhibit 3.2 to HMEC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003, filed with the SEC on August 14, 2003.

Horace Mann Educators Corporation 50 Quarterly Report on Form 10-Q

(4) Instruments defining the rights of security holders, including indentures:
4.1	Indenture, dated as of November 23, 2015, by and between HMEC and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.1 to HMEC’s Current Report on Form 8-K dated November 18, 2015, filed with the SEC on November 23, 2015.
4.1(a)	Form of HMEC 4.500% Senior Notes due 2025, incorporated by reference to Exhibit 4.2 to HMEC’s Current Report on Form 8-K dated November 18, 2015, filed with the SEC on November 23, 2015.
4.2	Certificate of Designations for HMEC Series A Cumulative Convertible Preferred Stock, incorporated by reference to Exhibit 4.3 to HMEC’s Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 16, 2006.
4.3	Description of Securities, incorporated by reference to Exhibit 4.3 to HMEC's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020.
(10) Material contracts:
10.1	Credit Agreement dated as of June 21, 2019 among HMEC, certain financial institutions named therein and PNC Bank, N.A., as administrative agent, incorporated by reference to Exhibit 10.1 to HMEC’s Current Report on Form 8-K dated June 24, 2019, filed with the SEC on June 24, 2019.
10.1(a)	First Amendment to Credit Agreement dated as of June 21, 2019 among HMEC, certain financial institutions named therein and PNC Bank, N.A., as administrative agent, incorporated by reference to Exhibit 10.1(a) to HMEC's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020.
10.1(b)	Second Amendment to Credit Agreement dated as of July 12, 2021, among HMEC, as borrower, PNC Bank, National Association, as administrative agent, and certain lenders party thereto, incorporated by reference to Exhibit 10.1(b) to HMEC's Current Report on Form 8-K dated July 14, 2021, filed with the SEC on July 14, 2021.
10.2*	Horace Mann Educators Corporation Amended and Restated 2002 Incentive Compensation Plan ("2002 Incentive Compensation Plan"), incorporated by reference to Exhibit 10.2 to HMEC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed with the SEC on August 9, 2005.
10.2(a)*	Revised Specimen Employee Stock Option Agreement under the 2002 Incentive Compensation Plan, incorporated by reference to Exhibit 10.6(b) to HMEC’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on March 2, 2009.
10.2(b)*	Specimen Employee Restricted Stock Unit Agreement under the 2002 Incentive Compensation Plan, incorporated by reference to Exhibit 10.6(d) to HMEC’s Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 16, 2006.
10.2(c)*	Revised Specimen Employee Restricted Stock Unit Agreement under the 2002 Incentive Compensation Plan, incorporated by reference to Exhibit 10.6(f) to HMEC’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on March 2, 2009.
10.2(d)*	Specimen Non-employee Director Restricted Stock Unit Agreement under the 2002 Incentive Compensation Plan, incorporated by reference to Exhibit 10.6(e) to HMEC’s Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on March 16, 2006.

Horace Mann Educators Corporation 51 Quarterly Report on Form 10-Q

10.2(e)*	Revised Specimen Non-employee Director Restricted Stock Unit Agreement under the 2002 Incentive Compensation Plan, incorporated by reference to Exhibit 10.6(h) to HMEC’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on March 2, 2009.
10.3*	HMEC 2010 Comprehensive Executive Compensation Plan (As Amended and Restated Effective March 3, 2021), incorporated by reference to Exhibit 1 (beginning on page 59) to HMEC’s Proxy Statement, filed with the SEC on April 8, 2021.
10.3(a)*	HMEC 2010 Comprehensive Executive Compensation Plan (As Amended and Restated Effective May 20, 2015) (Section 16 Officer) Non-Qualified Stock Option Agreement - Employee Grantee, incorporated by reference to Exhibit 10.3(a) to HMEC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 9, 2017.
10.3(b)*	HMEC 2010 Comprehensive Executive Compensation Plan (As Amended and Restated Effective May 20, 2015) (Non-Section 16) Non-Qualified Stock Option Agreement - Employee Grantee, incorporated by reference to Exhibit 10.3(b) to HMEC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 9, 2017.
10.3(c)*	HMEC 2010 Comprehensive Executive Compensation Plan (As Amended and Restated Effective May 20, 2015) Service-Vested Restricted Stock Units Agreement - Employee Grantee, incorporated by reference to Exhibit 10.3(c) to HMEC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 9, 2017.
10.3(d)*	HMEC 2010 Comprehensive Executive Compensation Plan (As Amended and Restated Effective May 20, 2015) Performance-Based Restricted Stock Units Agreement - Employee Grantee, incorporated by reference to Exhibit 10.3(d) to HMEC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 9, 2017.
10.3(e)*	HMEC 2010 Comprehensive Executive Compensation Plan (As Amended and Restated Effective May 20, 2015) Service-Vested Restricted Stock Units Agreement - Employee Grantee (One-Time Grant Service), incorporated by reference to Exhibit 10.3(e) to HMEC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 9, 2017.
10.3(f)*	Specimen Employee Performance-Based Restricted Stock Units Agreement - Key Strategic Grantee under the HMEC 2010 Comprehensive Executive Compensation Plan incorporated by reference to Exhibit 10.3(e) to HMEC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on May 6, 2016.
10.3(g)*	Specimen Non-employee Director Restricted Stock Unit Agreement under the HMEC 2010 Comprehensive Executive Compensation Plan, incorporated by reference to Exhibit 10.17(a) to HMEC’s Current Report on Form 8-K dated May 27, 2010, filed with the SEC on June 2, 2010.
10.4*	Horace Mann Supplemental Employee Retirement Plan, 2002 Restatement, incorporated by reference to Exhibit 10.1 to HMEC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed with the SEC on May 15, 2002.
10.5*	Horace Mann Executive Supplemental Employee Retirement Plan, 2002 Restatement, incorporated by reference to Exhibit 10.2 to HMEC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed with the SEC on May 15, 2002.
10.6*	Amended and Restated Horace Mann Nonqualified Supplemental Money Purchase Pension Plan, incorporated by reference to Exhibit 10.9 to HMEC’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on March 2, 2009.

Horace Mann Educators Corporation 52 Quarterly Report on Form 10-Q

10.7*	Summary of HMEC Non-employee Director Compensation.
10.8*	Summary of HMEC Named Executive Officer Annualized Salaries, incorporated by reference to Exhibit 10.8 to HMEC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 7, 2021.
10.9*	Form of Severance Agreement between HMEC, Horace Mann Service Corporation ("HMSC") and certain officers of HMEC and/or HMSC, incorporated by reference to Exhibit 10.13 to HMEC’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on February 28, 2013.
10.10*	HMSC Executive Change in Control Plan, incorporated by reference to Exhibit 10.15 to HMEC’s Current Report on Form 8-K dated February 15, 2012, filed with the SEC on February 22, 2012.
10.10(a)*	HMSC Executive Change in Control Plan Schedule A Plan Participants, incorporated by reference to Exhibit 10.10(a) to HMEC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 7, 2021.
10.11*	HMSC Executive Severance Plan, incorporated by reference to Exhibit 10.16 to HMEC’s Current Report on Form 8-K dated March 7, 2012, filed with the SEC on March 13, 2012.
10.11(a)*	First Amendment to the HMSC Executive Severance Plan, incorporated by reference to Exhibit 10.16(a) to HMEC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed with the SEC on August 9, 2012.
10.11(b)*	HMSC Executive Severance Plan Schedule A Participants, incorporated by reference to Exhibit 10.11(b) to HMEC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 7, 2021.
10.12	Stock Purchase Agreement Among Horace Mann Educators Corporation, and Robert Paglione, Paglione Family Irrevocable Trust F/B/O Adam Paglione, Paglione Family Irrevocable Trust F/B/O Lisa and Jorge Arroyo, Beau Adams and Benefit Consultants Group, Inc. dated as of October 30, 2018, incorporated by reference to Exhibit 10.12 to HMEC's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 1, 2019.
10.13	Purchase Agreement By and Among Ellard Family Holdings, Inc., Brian M. Ellard, The JCE Exempt Trust and Horace Mann Educators Corporation dated as of December 10, 2018, incorporated by reference to Exhibit 10.13 to HMEC's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 1, 2019.
10.14	Executive Transition Agreement between HMSC and Wade A. Rugenstein as of December 5, 2018, incorporated by reference to Exhibit 10.14 to HMEC's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020.
(11) Statement regarding computation of per share earnings.
(15) KPMG LLP letter regarding unaudited interim financial information.
(31) Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002:
31.1	Certification by Marita Zuraitis, Chief Executive Officer of HMEC.
31.2	Certification by Bret A. Conklin, Chief Financial Officer of HMEC.
(32) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002:

Horace Mann Educators Corporation 53 Quarterly Report on Form 10-Q

32.1	Certification by Marita Zuraitis, Chief Executive Officer of HMEC.
32.2	Certification by Bret A. Conklin, Chief Financial Officer of HMEC.
(99) Additional exhibits:
99.1	Glossary of Selected Terms.
(101) Interactive Data File:
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

Horace Mann Educators Corporation 54 Quarterly Report on Form 10-Q

SIGNATURES

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 thereunto duly authorized.

		HORACE MANN EDUCATORS CORPORATION
		(Registrant)
Date	August 6, 2021	/s/ Marita Zuraitis
		Marita Zuraitis
		President and Chief Executive Officer
Date	August 6, 2021	/s/ Bret A. Conklin
		Bret A. Conklin
		Executive Vice President and
		Chief Financial Officer
Date	August 6, 2021	/s/ Kimberly A. Johnson
		Kimberly A. Johnson
		Senior Vice President, Controller and
		Principal Accounting Officer

Horace Mann Educators Corporation 55 Quarterly Report on Form 10-Q

EX-10.3

Exhibit 10.3 Horace Mann Educators Corporation Comprehensive Executive Compensation Plan As Amended and Restated Effective March 3, 2021 I. II. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 III. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 IV. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 4.01 4.02 4.03 Authority of the Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Manner of Exercise of Committee Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 V. Stock Subject to Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 5.01 . . . Overall Number of Shares Available for Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 5.02 . . . Share Counting Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5.03 . . . Per Person Award Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5.04 . . . Preexisting Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 VI. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 VII. Specific Terms of Certain Stock-Based Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 7.01 . . . General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 7.02 . . . Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 7.03 . . . Stock Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 7.04 . . . Restricted Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 7.05 . . . Restricted Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 7.06 . . . Bonus Stock and Awards in Lieu of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 7.07 . . . Dividend Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 7.08 . . . Other Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 VIII. Performance Awards, Including Annual Incentive Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 8.01 . . . Performance Awards Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 8.02 . . . Performance Award Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 IX. Deferred Cash Sub-Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 9.01 . . . Deferred Cash Sub-Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 9.02 . . . Sub-Plan Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 9.03 . . . Sub-Plan Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 9.04 . . . Deferral Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 9.05 . . . Timing of Deferral Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 9.06 . . . Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 9.07 . . . Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 9.08 . . . Medium of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Table of Contents Horace Mann Educators Corporation 1

X. Certain Provisions Applicable to Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 10.01 . . Additional and Substitute Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 10.02 . . Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 10.03 . . Exemptions from Section 16(b) Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 XI. Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 11.01 . . Committee Discretion for Awards that are not 409A Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 11.02 . . Effect of Change in Control on 409A Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 11.03 . . “Cause” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 XII. General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 12.01 . . Additional Award Forfeiture Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 12.02 . . Compliance with Legal and Other Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 12.03 . . Limits on Transferability; Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 12.04 . . Designation of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 12.05 . . Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 12.06 . . Tax Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 12.07 . . Amendment and Termination of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 12.08 . . No Repricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 12.09 . . Clawback; Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 12.10 . . Nonexclusivity of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 12.11 . . Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 12.12 . . Nature of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 12.13 . . Electronic Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 12.14 . . Payments in the Event of Forfeitures; Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 12.15 . . Code Section 409A Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 12.16 . . Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 12.17 . . Awards to Participants Outside the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 12.18 . . Limitation on Rights Conferred under Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 12.19 . . Severability; Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 12.20 . . Plan Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 12.21 . . Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 12.22 . . General Creditor Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Table of Contents 9.09 . . . No Subsequent Elections as to Time and Form of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 9.10 . . . Payment Upon the Deferred Cash Participant’s Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 9.11 . . . Unforeseeable Emergencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 9.12 . . . Claims Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 9.13 . . . Deferred Compensation Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Horace Mann Educators Corporation 2

I. Background Horace Mann Educators Corporation, a Delaware Corporation (the “Company”) formerly maintained the Horace Mann Educators Corporation 2002 Incentive Compensation Plan (the “2002 Incentive Plan”), the Horace Mann Educators Corporation Deferred Compensation Plan for Employees (“Employees’ Plan”), and the Horace Mann Educators Corporation Deferred Equity Plan for Directors (“Directors’ Plan”). The Company established the 2010 Comprehensive Executive Compensation Plan (the “Plan”) effective May 27, 2010 (the “Effective Date”) to consolidate the 2002 Incentive Plan, the Employees Deferred Compensation Plan and the Directors Deferred Equity Plan into a single document, which was approved by Shareholders of the Company on May 27, 2010. The Company subsequently amended and restated the Plan effective May 20, 2015, and further amended the Plan effective March 7, 2017. The Company now desires to further amend and restate the Plan effective March 3, 2021 (the "Restatement Effective Date"), subject to the approval of the Shareholders of the Company with respect to shares of Stock that may be deliverable under the Plan. Unless the context requires otherwise, the terms and provisions of this Plan as amended and restated shall apply to awards granted after the Restatement Effective Date, as well as to outstanding awards granted under the Plan prior to the Restatement Effective Date, to outstanding awards granted prior to the Effective Date under the 2002 Incentive Plan, and to outstanding Accounts under the Employees’ Plan and the Directors’ Plan. II. Purpose The purpose of the Plan is to aid the Company in attracting, retaining, motivating and rewarding employees, Non- Employee Directors, and other persons who provide substantial services to the Company or its Affiliates, to provide for equitable and competitive compensation opportunities, including deferral opportunities, to encourage long-term service, to recognize individual contributions and reward achievement of Company goals, and promote the creation of long-term value for Shareholders by closely aligning the interests of Participants with those of Shareholders. The Plan authorizes stock-based and cash-based incentives for Participants. To the extent this Plan results in a deferral of income by employees for periods extending to the termination of employment or beyond, it is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees. III. Definitions In addition to the terms defined in Article I above and elsewhere in the Plan, the following capitalized terms used in the Plan have the respective meanings set forth in this Section: “Affiliate” means any person with whom the Company would be considered a single employer under Code Sections 414(b) and 414(c), except that in applying Code Sections 1563(a)(1), (2) and (3) for purposes of determining a controlled group of corporations under Code Section 414(b), the language “at least 50 percent” shall be used instead of “at least 80 percent” in each place it appears in Code Sections 1563(a)(1), (2) and (3), and in applying Treas. Reg. §1.414(c)-2 for purposes of determining a controlled group of trades or businesses under Code Section 414(c), the language “at least 50 percent” shall be used instead of “at least 80 percent” in each place it appears in Treas. Reg. §1.414(c)-2. Notwithstanding the foregoing, where justified by legitimate business criteria as determined by the Committee in its sole discretion, “at least 20 percent” shall be substituted for “at least 50 percent” in the preceding sentence in determining whether a Participant has had a Separation from Service. “Annual Incentive Award” means a type of Performance Award granted to a Participant representing a conditional right to receive cash, Stock or other Awards or payments, as determined by the Committee, based on performance over a performance period of twelve months or less. “Award” means any Option, SAR, Restricted Stock, RSU, Stock granted as a bonus or in lieu of another award, Dividend Equivalent, Other Award, Performance Award or Cash Award, together with any related right or interest, granted to a Participant under the Plan. An Account (as defined in Section 9.02(c)) is not an Award. Horace Mann Educators Corporation 3

“Award Agreement” means the agreement setting forth the terms and conditions to which an Award is subject, to the extent not provided in the Plan, together with any additional documents (such as Beneficiary designations) relating to a specific Award. “Beneficiary” means the individual or entity designated by the Participant to receive the benefits specified under the Participant’s Award upon such Participant’s death. See Section 12.04. No Beneficiary shall have any rights under the Plan prior to the death of the Participant. “Beneficial Owner” has the meaning specified in Rule 13d-3 under the Exchange Act. “Board” means the Company’s Board of Directors. “Change in Control” means, unless otherwise defined in an Award Agreement, a. for Awards granted prior to the Effective Date, any one or more of the following: i. Approval by the Shareholders of the Company of a merger, reorganization, consolidation, or similar transaction, in which the Company is not the continuing or the surviving corporation, or pursuant to which Shares would be converted into cash, securities or other property, other than a merger of the Company in which no Company shareholder’s ownership percentage in the surviving corporation immediately after the merger is less than such shareholder’s ownership percentage in the Company immediately prior to such merger by ten percent (10%) or more (unless such change results from elimination of an odd lot that represented less than 0.1% of the outstanding of Stock); or (2) any sale, lease exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company; or ii. The Shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company which is part of a sale of assets, merger, or reorganization of the Company or other similar transaction; or iii. Any “person”, as such term is defined in Sections 13(d) and 14(d) of the Exchange Act, is or becomes, directly or indirectly, the “beneficial owner” as defined in Rule 13d-3 under the Exchange Act, of securities of the Company that represent more than 50% of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of Directors; or iv. The Incumbent Directors (determined using the Effective Date as the baseline date) cease for any reason to constitute at least a majority of the Directors of the Company then serving; and b. for Awards granted on and after the Effective Date, unless otherwise defined in the Award Agreement or excluded under subsection (d) below, any one or more of the following: i. any one person or more than one person acting as a group acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company; ii. any one person or more than one person acting as a group acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company that, constitutes thirty percent (30%) or more of the total fair market value or total voting power of the stock of the Company; or iii. a majority of members of the Company’s Board is replaced during any twelve (12)-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board before the date of the appointment or election. Horace Mann Educators Corporation 4

c. for Awards granted on and after the Restatement Effective Date, unless otherwise defined in the Award Agreement or excluded under subsection (d) below, but in addition to the events in subsection (b) above, consummation of a sale or other disposition of all or substantially all the assets of the Company, provided that any one person or more than one person acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition of assets by such person), assets of the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions. d. Notwithstanding subsections (b) and (c) above, for awards granted on or after the Restatement Effective Date, i. clauses (i) and (ii) of subsection (b) and subsection (c) shall not apply to an acquisition of stock or assets by the Company, any Affiliate of the Company, or any employee benefit plan of the Company or any Affiliate; ii. clauses (i) and (ii) of subsection (b) and subsection (c) shall not apply to a merger, consolidation, or similar corporate transaction (including but not limited to a transaction to effect a recapitalization or change of jurisdiction of incorporation) following the consummation of which and of all related integrated transactions the record holders of the stock of the Company prior to such transaction or series of transactions have substantially the same proportionate ownership in a surviving entity that owns directly or indirectly all or substantially all of the assets that the Company owned directly or indirectly immediately before such transaction or series of transactions except for a change in proportionate ownership that results from elimination of one or more odd lots that represented less than 0.1% of the outstanding stock, and a majority of the members of the Company's Board at any time during the 12- month period prior to such transaction on series of related integrated transactions constitute a majority of the members of the board of directors of the surviving entity immediately following the transaction or series of related integrated transactions; iii. clauses (i) and (ii) of subsection (b) shall not apply to the acquisition by a person or more than one person acting as a group of stock or securities voluntarily issued directly by the Company to such person or group in connection with the Company raising capital or making an acquisition, provided that (A) such stock or securities do not constitute more than fifty percent (50%) of the total fair market value or total voting power of the stock and securities of the Company determined after the issuance of such stock or securities, (B) such person or group is in compliance with any agreement between the Company and such person or group relating to such issuance and acquisition of stock or securities, and (C) such stock or securities are not subsequently transferred by such person or group except as may be permitted by written agreement between the Company and such person or group made at the time such stock or securities are issued; and iv. subsection (c) shall not apply to a transfer of assets (A) to a shareholder of the Company in exchange for or with respect to its stock, (B) to an entity fifty percent (50%) or more of the total value or voting power of which is owned directly or indirectly by the Company, (C) to a person, or more than one person acting as a group, that owns directly or indirectly fifty percent (50%) or more of the total value or voting power of all of the outstanding stock of the Company, or (D) to an entity, at fifty percent (50%) of the total value or voting power of which is owned directly or indirectly by a person described in immediately preceding clause (C). “Code” means the Internal Revenue Code of 1986, as amended. References to any provision of the Code or regulation thereunder shall include any successor provisions and regulations, and other applicable guidance or pronouncement of the Department of the Treasury and Internal Revenue Service and applicable case law. Horace Mann Educators Corporation 5

“Committee” means the Compensation Committee of the Board of Directors, the composition and governance of which is established in the Committee’s Charter as approved from time to time by the Board and subject to Section 303A.05 of the Listed Company Manual of the New York Stock Exchange, and other corporate governance documents of the Company. No action of the Committee shall be void or deemed to be without authority due to the failure of any member, at the time the action was taken, to meet any qualification standard set forth in the Committee Charter or this Plan. The full Board may perform any function of the Committee hereunder except to the extent limited under Section 303A.05 of the Listed Company Manual, or the Company’s bylaws, in which case the term “Committee” shall refer to the Board. To the extent the Committee has delegated authority to another person or persons (including the Administrator as defined in Section 9.02) the term “Committee” shall refer to such other person or persons. “Company” is defined in Section 1.01. "Deferred Cash Sub-Plan" is defined in Section 9.01. “Director” means a member of the Board. “Dividend Equivalent” means a right granted to a Participant to receive cash, Stock, or other property equal in value to all or a specified portion of the dividends paid with respect to a specified number of shares of Stock in connection with dividend declarations, reclassifications, spin-offs, and the like. “Effective Date” is defined in Section 1.02. “Eligible Person” means an employee of the Company or any Affiliate, including any executive officer, a Non-Employee Director of the Company, a consultant or other person who provides substantial services to the Company or an Affiliate, and any person who has been offered employment by the Company or an Affiliate, provided that such prospective employee may not receive any payment or exercise any right relating to an Award until such person has commenced employment with the Company or an Affiliate. “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time and the rules and regulations thereunder. “Fair Market Value” means as of any applicable date the closing sale price of a share of Stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if no sales were reported on such date, the closing sales price on the last preceding day on which a sale was reported; provided that if Stock is not quoted on the Composite Tape, the closing sales price on the New York Stock Exchange shall be used, or, if Stock is not listed on such Exchange, the closing sales price on the principal United States securities exchange registered under the Exchange Act on which Stock is listed shall be used, or, if Stock is not listed on any such exchange, the last closing bid quotation with respect to a share of Stock immediately preceding the time in question on the Nasdaq or any system then in use (or any other system of reporting or ascertaining quotations then available) shall be used, or if Stock is not so quoted, the fair market value on the applicable date of a share of Stock as determined by the Board in good faith. “409A Change in Control” means a Change in Control that also qualifies, with respect to the Participant, as a change in the ownership or effective control of a corporation or a change in the ownership of a substantial portion of the assets of a corporation, within the meaning of Treas. Reg. §1.409A-3(i)(5). The determination of whether a Change in Control qualifies as a 409A Change in Control shall be made on a Participant-by-Participant basis. “409A Compensation” means an Award, an Account, or other compensation that is “nonqualified deferred compensation” subject to Code Section 409A, regardless of when granted or awarded. “Incentive Stock Option” or “ISO” means any Option intended to qualify as an incentive stock option within the meaning of Code Section 422, and qualifying thereunder. Horace Mann Educators Corporation 6

“Incumbent Directors” means, as of any specified baseline date, individuals then serving as members of the Board who were members of the Board as of the date immediately preceding such baseline date; provided that any subsequently- appointed or elected member of the Board whose election, or nomination for election by Shareholders of the Company or the Surviving Corporation, as applicable, was approved by a vote or written consent of a majority of the Directors then comprising the Incumbent Directors shall also thereafter be considered an Incumbent Director, unless the initial assumption of office of such subsequently-elected or appointed Director was in connection with (i) an actual or threatened election contest, including a consent solicitation, relating to the election or removal of one or more members of the Board, (ii) a “tender offer” (as such term is used in Section 14(d) of the Exchange Act), or (iii) a proposed reorganization transaction. “Non-Employee Director” means a Director who is not an employee of the Company or an Affiliate. “Nonstatutory Option” means an Option that is not an Incentive Stock Option. “Option” means a right, granted to a Participant, to purchase a number of shares of Stock, Restricted Stock, or fully vested RSUs at a specified price during a specified time period, and subject to such other terms and conditions as the Committee may determine. The term “Option” includes both an Incentive Stock Option and a Nonstatutory Option. “Other Awards” means cash or Stock-based Awards granted to an Eligible Person under Section 7.08. “Participant” means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person, and including any permitted transferee of such Award. Where appropriate in context, “Participant” includes a “Deferred Cash Participant”. “Performance Award” means a conditional right granted to an Eligible Person to receive cash, Stock or other Awards or payments, as determined by the Committee, based upon the degree of satisfaction of performance criteria specified by the Committee. Performance Awards include, but are not limited to Annual Incentive Awards. “Preexisting Plans” means the 1991 Stock Incentive Plan, the 2001 Stock Incentive Plan, the 2002 Incentive Plan, the Employees’ Plan and the Directors’ Plan. “Restricted Stock” means Stock granted to an Eligible Person under Section 7.04 which is subject to certain restrictions and to a substantial risk of forfeiture. “Restricted Stock Unit” or “RSU” means a bookkeeping entry representing a hypothetical share of Stock granted to an Eligible Person under Section 7.05 or credited to a Deferred Stock Equivalent Account pursuant to the Deferred Cash Sub-Plan under Article IX which, if so provided in an Award Agreement, is subject to certain restrictions and to a substantial risk of forfeiture. A Restricted Stock Unit shall have a nominal value on any date equal to the Fair Market Value of one share of Stock on that date. A Restricted Stock Unit may be settled for cash, property, or shares of Stock, and may be a Performance Award. Restricted Stock Units represent an unfunded and unsecured obligation of the Company. Fully vested RSUs credited pursuant to the Deferred Cash Sub-Plan under Article IX were referred to as "Common Stock Equivalent Units" or "CSUs" prior to the Restatement Effective Date. “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to Participants, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act. Horace Mann Educators Corporation 7

“Separation from Service” means a. in the case of an individual who is an employee of the Company or an Affiliate, the employee’s termination of employment with the Company and its Affiliates. Whether a termination of employment has occurred shall be determined based on whether the facts and circumstances indicate the individual and the employer reasonably anticipate that no further services will be performed by the individual for the Company and its Affiliates; provided, however, that an individual shall be deemed to have a Separation from Service if the level of services he or she would perform for the Company and its Affiliates after a certain date permanently decreases to no more than twenty percent (20%) of the average level of bona fide services performed for the Company and its Affiliates (whether as an employee or independent contractor) over the immediately preceding 36-month period (or the full period of services to the Company and its Affiliates if the Participant has been providing services for less than 36 months). For this purpose, a Participant is not treated as having a Separation from Service while he or she is on a military leave, sick leave, or other bona fide leave of absence, if the period of such leave does not exceed six months (90 days in the case of an Incentive Stock Option), or if longer, so long as the Participant has a right to reemployment with the Company or an Affiliate under an applicable statute or by contract; and b. in the case of a Director, the individual ceases to be a Director of the Company and all Affiliates, unless immediately upon such cessation the individual has a relationship with the Company or an Affiliate such that such cessation would not be a separation from service under Code Section 409A, in which case a Separation from Service will occur upon the cessation of such relationship as provided in Code Section 409A. “Specified Employee” means an individual who, as of the date of his or her Separation from Service, is a key employee of the Company or any Affiliate whose stock is publicly traded. An individual is a key employee if he or she meets the requirements for being a “key employee” under the so-called top heavy rules of Code Section 416(i)(1)(A)(i), (ii), or (iii), applied by disregarding Code Section 416(i)(5), at any time during the 12-month period ending each December 31; provided that any individual who is a key employee on December 31 of any year (“Key Employee Identification Date”) shall be deemed to be a “Specified Employee” for the 12-month period beginning on April 1 of the following calendar year (“Specified Employee Effective Date”) and ending on March 31 of the next following calendar year. The Board may, consistent with the requirements of Code Section 409A, by separate action, given effect with respect to all non-qualified deferred compensation plans subject to Code Section 409A no earlier than 12 months after such action, change the December 31 date and the April 1 date in the foregoing portion of this definition, provided the new Specified Employee Effective Date is no later than the first day of the fourth month after the new Key Employee Identification Date. “Stock” means the Company’s common stock $0.001 par value, and any other equity securities of the Company that may be substituted or resubstituted for Stock. “Stock Appreciation Right” or “SAR” means a right granted to an Eligible Person under Section 7.03 to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee, which grant price shall be not less than the Fair Market Value of a share of Stock on the date of grant of such SAR, “Termination of employment” or “Termination of service” and words of similar import, unless the context clearly indicates otherwise, mean Separation from Service. IV. Administration 4.01 Authority of the Committee The Plan shall be administered by the Committee, which shall have full and final authority, in its discretion, in each case subject to and consistent with the provisions of the Plan, a. to determine which Eligible Persons shall be granted Awards; b. to determine the type and size of Awards, the dates on which Awards may be granted, exercised or settled and on which the risk of forfeiture or any deferral period relating to Awards shall lapse or terminate, and the acceleration of any such dates; c. to determine the expiration date of any Award; d. to determine whether an Award will be granted on a standalone or tandem basis; Horace Mann Educators Corporation 8

e. to determine whether, to what extent, and under what circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash, Stock, other Awards, or other property; f. to determine other terms and conditions of, and all other matters relating to, Awards; g. to prescribe Award Agreements evidencing or setting terms of Awards (such Award Agreements need not be identical for each Participant); h. to adopt amendments to Award Agreements and to establish rules and regulations for the administration of the Plan and amendments thereto; provided that, except as set forth herein or in the Award Agreement, the Committee shall not amend an Award Agreement in a manner that materially and adversely affects the Participant without the consent of the Participant (for this purpose, actions that alter the timing of federal income taxation of a Participant will not be deemed material unless such action results in an income tax penalty on the Participant); i. to construe and interpret the Plan and Award Agreements and correct defects, supply omissions or reconcile inconsistencies therein; j. to exercise the powers and duties of the Administrator (as defined in Section 9.02) as provided in the Sub-Plan; and k. to make all other decisions and determinations (including factual determinations) in its discretion as the Committee may deem necessary or advisable for the administration of the Plan. Decisions of the Committee with respect to the administration and interpretation of the Plan and any Award Agreement shall be final, conclusive, and binding upon all persons interested in the Plan, including Participants, Beneficiaries, transferees under Section 12.03 and other persons claiming rights from or through a Participant, and Shareholders. In exercising its discretion hereunder, the Committee shall have due regard for the accounting, tax, and disclosure requirements on the Company and the Participants. The foregoing notwithstanding, the Board shall perform the functions of the Committee for purposes of granting Awards under the Plan to Non-Employee Directors and shall have all the powers of the Committee with respect thereto (authority with respect to other aspects of Non-Employee Director awards is not exclusive to the Board, however). 4.02 Manner of Exercise of Committee Authority a. The Committee may act through subcommittees of the Board (including a subcommittee of one Board member if permitted by applicable law), including for purposes of perfecting exemptions under Rule 16b-3 (in which case the members of the sub-committee shall qualify as Non-Employee Directors). The express grant of any specific power to the Committee, and the taking of any action by the Committee or a subcommittee, shall not be construed as limiting any power or authority of the Committee. b. To the fullest extent permitted under Section 157 and other applicable provisions of the Delaware General Corporation Law and the Company’s bylaws, the Committee may delegate to an individual who is (or individuals who each are) an officer (as determined pursuant to Section 16 of the Exchange Act), the power to approve Awards of Options, SARs, Restricted Stock or RSUs to persons eligible to receive Awards under the Plan who are not subject to Section 16 of the Exchange Act. Any action by an officer or officers pursuant to this Section 4.02(b) shall be subject to the following limitations: (A) without the express approval of the Committee, Awards made by such officer or officers not relate to more than 10,000 shares of Stock (determined pursuant to the share counting rules set forth in Section 5.02 of the Plan) in any calendar year, and (B) any such Award must be made subject to the terms (including vesting or other lapse of restrictions) set forth in the form of Award Agreement that was then most recently approved by the Committee for purposes of making such Awards. Any delegation pursuant to this Section 4.02(b) may be revoked at any time. c. Except to the extent prohibited by applicable law, the Committee may delegate to one or more individuals the day-to-day administration of the Plan and any of the functions assigned to the Committee under the Plan that relate to the day-to-day administration of the Plan. Such delegation may be revoked at any time. Horace Mann Educators Corporation 9

4.03 Limitation of Liability The Committee and each member thereof, and any person acting pursuant to authority delegated by the Committee, shall be entitled, in good faith, to rely or act upon any report or other information furnished by any executive officer, other officer or employee of the Company or an Affiliate, the Company’s independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee, any person acting pursuant to authority delegated by the Committee, and any officer or employee of the Company or an Affiliate acting at the direction or on behalf of the Committee or a delegate shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination. V. Stock Subject to Plan 5.01 Overall Number of Shares Available for Delivery Subject to adjustment as provided in Section 12.05, the total number of shares of Stock reserved and available for delivery in connection with Awards under the Plan shall be a. 751,661 shares as of December 31, 2020 plus b. the number of shares subject to awards under the Plan and Preexisting Plans which become available in accordance with Section 5.02 after the Restatement Effective Date c. an additional 2,500,000 shares. Of these shares, 100% may be delivered in connection with any Award, including “full-value Awards,” meaning Awards other than Options, SARs, or Awards for which the Participant pays the intrinsic value, either directly or in exchange for (or by foregoing) a right to receive a cash payment from the Company equal to the intrinsic value of the Award; provided, however, that any shares granted under Options or SARs shall be counted against the share limit on a one-for-one basis and any shares granted as full-value Awards shall be counted against the share limit as two and one-half (2.5) shares for every one (1) share subject to such Award. In addition 100% of the shares may be granted with respect to ISOs. The Company shall at all times during the term of the Plan retain as authorized and unissued Stock or treasury Stock at least the number of shares of Stock from time to time required under the provisions of the Plan, or otherwise assure itself of its ability to perform its obligations hereunder. Horace Mann Educators Corporation

5.02 Share Counting Rules The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award. Shares of Stock subject to an Award or an award under a Preexisting Plan that is canceled, expired, forfeited, settled in cash or otherwise terminated or settled without delivery of the full number of shares of Stock subject to such Award to the Participant will again be available for Awards. In addition, in the case of any Award granted in substitution for an award of a company or business acquired by the Company or an Affiliate, shares delivered or to be delivered in connection with such substitute Award shall not be counted against the number of shares reserved under the Plan, but shall be available under the Plan by virtue of the Company’s assumption of the plan or arrangement of the acquired company or business. This Section 5.02 shall apply to the number of shares reserved and available for ISOs only to the extent consistent with applicable regulations relating to ISOs under the Code. Because shares will count against the number reserved in Section 5.01 upon delivery (or later vesting), and subject to the share counting rules under this Section 5.02, the Committee may determine that Awards may be outstanding that relate to more shares than the aggregate remaining available under the Plan, so long as Awards will not result in delivery and vesting of shares in excess of the number then available under the Plan. If for any reason Awards require delivery, at the same time or as a result of the same event, of Shares in excess of the number then available, there shall be paid out with respect to each affected Award a number of Shares bearing the same ratio to the number of Shares to be delivered under such Award as the number of Shares available bears to the number of Shares required under all affected Awards. In the discretion of the Committee, either the undelivered balance of the Shares required under the affected Awards shall be forfeited or shall be delivered when the Shareholders approve an increase in the number of Shares available, or the Fair Market Value of the undelivered Shares shall be paid to the affected Participants in cash. Notwithstanding the foregoing, the following shares of Stock will not be added back (or with respect to awards under a Preexisting Plan, will not be added) to the aggregate number of shares of Stock available for issuance: (i) any shares of Stock that were subject to an SAR that was settled in stock (or a stock appreciation right granted under a Preexisting Plan that was settled in stock), (ii) shares of Stock delivered to or withheld by the Company to pay the exercise price of an Option (or an option granted under a Preexisting Plan), (iii) shares of Stock delivered to or withheld by the Company to pay the withholding taxes related to an Option or SAR (or an option or stock appreciation right granted under a Preexisting Plan), or (iv) shares of Stock repurchased on the open market with cash proceeds from exercise of an Option (or option granted under a Preexisting Plan). Any shares of Stock that again become available for grant (or with respect to awards under a Preexisting Plan, are added to the aggregate number of shares of Stock available for issuance) pursuant to this Section 5.02 shall be added back as one (1) share of Stock if such shares were subject to Options or SARs granted under the Plan or options or stock appreciation rights granted under a Preexisting Plan, and as two and one half (2.5) shares of Stock if such shares were subject to full-value Awards granted under the Plan or subject to awards other than options or stock appreciation rights granted under the Preexisting Plans. 5.03 Per Person Award Limits RSUs and other Awards denominated in Shares that are granted to Non-Employee Directors (exclusive of Non-Employee Director elective fee deferrals under Section 9.04 below) shall not exceed $150,000 in Fair Market Value (determined as of the date of grant) for any Non-Employee Director in any calendar year. 5.04 Preexisting Plans No grants of Awards will be made under any Preexisting Plan after the Effective Date. VI. Eligibility Awards may be granted under the Plan only to Eligible Persons. An employee on leave of absence, including for a disability who has not had a Separation from Service may be considered as still in the employ of the Company or an Affiliate for purposes of eligibility for participation in the Plan. Horace Mann Educators Corporation 11

VII. Specific Terms of Certain Stock-Based Awards 7.01 General a. General Terms. Awards may be granted on the terms and conditions set forth in this Article VII. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 12.07), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment or service by the Participant and terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion with respect to any term or condition of an Award that is not mandatory under the Plan. The Committee shall require the payment of lawful consideration for an Award to the extent necessary to satisfy the requirements of the Delaware General Corporation Law, and may otherwise require payment of consideration for an Award except as limited by the Plan. b. Minimum Vesting. Except as otherwise set forth in this Section 7.01(b), no portion of any grant of Options, Stock Appreciation Rights, Restricted Stock or Restricted Stock Units (including any such Award that is otherwise intended to constitute a Performance Award) shall, on the date any such Award is granted, provide that such Award shall become vested (i.e., nonforfeitable) or free from restriction, as applicable, sooner than the first anniversary of the date such Award is granted; provided, that an Award may provide for earlier vesting or lapse of restrictions (i) in the event of the death or disability of the applicable Participant, (ii) if such Award is granted pursuant to Section 10.01 hereof and the award being replaced was previously subject to vesting or a lapse of restrictions that would have occurred within one year of the date the substitute Award is granted, (iii) Awards granted prior to March 7, 2017 shall not be subject to the vesting minimums described in this Section 7.01(b). In addition to the exceptions set forth in clauses (i), (ii) and (iii) above, the Committee shall have the authority to grant Options, Stock Appreciation Rights, Restricted Stock or Restricted Stock Units (including any such Award that is otherwise intended to constitute a Performance Award) that become vested (i.e., nonforfeitable) or free from restrictions, as applicable, prior to the first anniversary of the grant date thereof, so long as such Awards do not represent more than five percent (5%) of the aggregate maximum number of shares of Stock available for Awards under this Plan (as set forth in Section 5.01). For purposes of determining the number of shares of Stock that remain available for delivery under the five percent (5%) limit set forth in the preceding sentence, the counting rules set forth in Section 5.02 of this Plan shall apply. 7.02 Options The Committee is authorized to grant Options to Eligible Persons on the following terms and conditions: a. Exercise Price. The exercise price per share of Stock purchasable under an Option (including both ISOs and Nonstatutory Options) shall be determined by the Committee, provided that such exercise price shall be not less than the Fair Market Value of a share of Stock on the date of grant of such Option. b. Option Term; Time and Method of Exercise. The Committee shall determine the term of each Option, which in no event shall exceed a period of ten years from the date of grant. The Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the methods by which such exercise price may be paid or deemed to be paid and the form of such payment, including, without limitation, cash, Stock (including Stock deliverable upon exercise), Restricted Stock or other property that does not have a deferral feature, other Awards or awards granted under other plans of the Company or any Affiliate, or other property (including through “net exercise” or “cashless exercise” arrangements, to the extent permitted by applicable law), and the methods by or forms in which Stock will be delivered or deemed to be delivered in satisfaction of Options. Horace Mann Educators Corporation 12

c. Incentive Stock Options i. Only employees (as determined in accordance with Section 3401(c) of the Code) of the Company or any of its subsidiaries may be granted Incentive Stock Options. For this purpose, “subsidiary” means any company (other than the Company) in an unbroken chain beginning with the Company; provided each company in the unbroken chain (other than the Company) owns, at the time of determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one or the other companies in such chain. ii. If and to the extent that the aggregate Fair Market Value of the Stock (determined as of the date of grant) with respect to which a Participant’s Incentive Stock Options are exercisable for the first time during any calendar year exceeds $100,000, such Options shall be treated as Nonstatutory Options. For purposes of applying this limitation, Incentive Stock Options shall be taken into account in the order in which they were granted. iii. Unless otherwise provided in the Award Agreement, upon the Participant’s termination of employment for any reason, any outstanding Incentive Stock Option granted to such Participant, whether vested or unvested, to the extent not theretofore exercised, shall terminate immediately. iv. No Incentive Stock Option shall be granted more than 10 years after the earlier of the adoption of the Plan or shareholder approval of the Plan; provided that after the initial adoption of the Plan, such 10-year period shall be measured from the earlier of a subsequent amendment of the Plan requiring shareholder approval or shareholder approval of the Plan as so subsequently amended. v. Award Agreements evidencing Incentive Stock Options shall contain such other terms and conditions as may be necessary to comply with the applicable provisions of Section 422 of the Code. 7.03 Stock Appreciation Rights The Committee is authorized to grant SARs to Eligible Persons. The Committee shall determine the term of each SAR; provided that in no event shall the term of an SAR exceed a period of ten years from the date of grant. The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which an SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the method of exercise, method of settlement, form of consideration payable in settlement (whether cash, Stock, or other property), and the method by or forms in which Stock will be delivered or deemed to be delivered to Participants, whether or not an SAR shall be free-standing or in tandem or combination with any other Award. 7.04 Restricted Stock The Committee is authorized to grant Restricted Stock to Eligible Persons on the following terms and conditions: a. Grant and Restrictions. Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise and under such other circumstances as the Committee may determine at the date of grant or thereafter. A Participant shall pay such consideration for the Restricted Stock as the Committee may require; provided that the minimum consideration for shares of Restricted Stock (other than treasury shares) shall be the par value of such shares of Stock. Except to the extent restricted under the terms of the Plan and any Award Agreement relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a shareholder, including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to subsection (d) below). b. Forfeiture. Except as otherwise determined by the Committee or provided in the Award Agreement, upon termination of employment or service during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company; provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will lapse in whole or in part, including in the event of terminations resulting from specified causes. Horace Mann Educators Corporation 13

c. Evidence of Stock Ownership. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine, including appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock. d. Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, the Committee may require that any dividends paid on a share of Restricted Stock shall be either (A) paid with respect to such Restricted Stock at the dividend payment date in cash, in kind, or in a number of shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) automatically reinvested in additional Restricted Stock or held in kind, which shall be subject to the same terms as applied to the original Restricted Stock to which it relates, or (C) deferred as to payment, either as a cash deferral or with the amount or value thereof automatically deemed reinvested in additional Restricted Stock, other Awards or other investment vehicles, subject to such terms as the Committee shall determine or permit a Participant to elect. Unless otherwise determined by the Committee, cash, Stock or other property distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed. 7.05 Restricted Stock Units The Committee is authorized to grant RSUs to Eligible Persons, subject to the following terms and conditions except as provided in subsection (e) below: a. Award and Restrictions. RSUs shall be subject to restrictions constituting a substantial risk of forfeiture, which conditions may be time-based or performance-based. Unless deferred pursuant to subsection 7.05(d) below, settlement of RSUs by delivery of cash, Stock, or other property, as specified in the Award Agreement, shall occur upon the lapse of the substantial risk of forfeiture, but no later than March 15 of the year following the year in which the substantial risk of forfeiture lapses. In addition, RSUs shall be subject to such restrictions on transferability and other restrictions, if any, as the Committee may impose, which restrictions may lapse at the same time as the substantial risk of forfeiture or at earlier or later specified times, separately or in combination, in installments or otherwise, and under such other circumstances as the Committee may determine at the date of grant or thereafter. b. Forfeiture. Except as otherwise determined by the Committee, upon termination of employment or service during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the RSUs), all RSUs that are at that time subject to such forfeiture conditions shall be forfeited, together with any Dividend Equivalents that have accrued thereon; unless the Committee provides, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to RSUs will lapse in whole or in part, including in the event of terminations of employment or service resulting from specified causes. c. Dividend Equivalents. Unless otherwise determined by the Committee, Dividend Equivalents on RSUs shall be either (A) paid with respect to such RSUs at the dividend payment date in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such RSUs, either as a cash deferral or with the amount or value thereof automatically deemed reinvested in RSUs, other Awards or other investment vehicles having a Fair Market Value equal to the amount of such dividends, as the Committee shall determine or permit a Participant to elect, and shall be paid when the RSUs to which they relate are settled. Notwithstanding the foregoing, Dividend Equivalents (whether in the form of RSUs or otherwise) on RSUs that are Performance Awards shall be forfeited if the RSUs to which they relate are forfeited or otherwise not earned. Unless otherwise determined by the Committee, cash, Stock or other property distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed. Horace Mann Educators Corporation 14

d. Deferral of RSUs. The Committee may permit an employee or Non-Employee Director who is granted RSUs to elect to defer settlement of the RSUs in accordance with this Section 7.05(d), subject to such additional terms and conditions as the Committee shall designate in its discretion. i. Deferral Elections. An election to defer RSUs shall be made on or before December 31 of the calendar year preceding the calendar year in which the RSUs are granted, on a form (which may be electronic) authorized by the Committee, and shall not carry over from year to year unless the Committee timely provides otherwise. The RSU deferral election shall include (x) the portion of the RSU Award to be deferred, (y) the date on which settlement of the deferred RSUs shall be made or commence (which may be a fixed date, the grantee’s attainment of a particular age, the grantee’s Separation from Service for any reason, or such other dates or circumstances as may be required or permitted by the Committee); and (z) whether settlement shall be made on a single date or in installments over a period and subject to such terms and conditions as may be set by the Committee at the time of the deferral election. If there is no election as to form of settlement, then settlement shall be made no later than 90 days following the date designated in (y), in a lump sum in cash, Stock, or such other medium as the Committee may designate. ii. New Grantees. Notwithstanding subsection (i) above, the Committee may permit an RSU deferral election to be made by a grantee who never previously received an RSU, and who never previously had an Account and never previously had deferred compensation under any other plan required by Code Section 409A to be aggregated with his or her RSUs. Such an individual’s RSU deferral election shall be made within 30 days of the grant of the RSUs and shall be effective only with respect to a fractional portion of the RSUs determined by multiplying (separately with respect to each applicable vesting date), the grant date value of the number of RSUs vesting on such vesting date by a fraction, the numerator of which is the number of calendar days between the date the deferral election is received by the Company and the date such RSUs vest, and the denominator of which is the total number of calendar days between the grant date and the vesting date. iii. Dividend Equivalents on Deferred RSUs. During the deferral period, Dividend Equivalents shall be credited to deferred RSUs pursuant to subsection (c) subject to such terms and conditions as the Committee shall specify. iv. Claims Procedure. To the extent RSUs are deferred to the termination of covered employment or beyond, they shall be subject to the claims procedure under Section 9.12, substituting “grantee” for “Deferred Cash Participant” and “settlement of deferred RSUs” for “distribution from an Account”. e. Notwithstanding subsections (a) through (d) above, those subsections shall not apply to fully vested RSUs credited to an Account pursuant to the Deferred Cash Sub-Plan, which shall be subject to the terms and conditions set forth in Article IX. 7.06 Bonus Stock and Awards in Lieu of Obligations The Committee is authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu of obligations of the Company or an Affiliate to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Committee. 7.07 Dividend Equivalents The Committee is authorized to grant Dividend Equivalents to a Participant, entitling the Participant to receive cash, Stock, other Awards, or other property equivalent to all or a portion of the dividends paid with respect to a specified number of shares of Stock. Dividend Equivalents may be awarded on a freestanding basis or in connection with another Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles, and subject to restrictions on transferability, risks of forfeiture and such other terms as the Committee may specify with due regard to the applicability of Code Section 409A. Notwithstanding the foregoing, (a) Dividend Equivalents shall not be provided with respect to Options or Stock Appreciation Rights, and (b) any Dividend Equivalents associated with a Performance Award shall be forfeited to the extent the Performance Award is forfeited or otherwise not earned. Horace Mann Educators Corporation 15

7.08 Other Awards The Committee is authorized, subject to limitations under applicable law, to grant to Eligible Persons other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock or factors that may influence the value of Stock, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or business units thereof or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified subsidiaries or affiliates or other business units. The Committee shall determine the terms and conditions of such Awards, which may include the right to elective deferral thereof, subject to such terms and conditions as the Committee may specify in its discretion. Stock delivered pursuant to an Award in the nature of a purchase right granted under this Section 7.08 shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other Award under the Plan, may also be granted pursuant to this Section 7.08. VII. Performance Awards, Including Annual Incentive Awards 8.01 Performance Awards Generally The Committee is authorized to grant Performance Awards to Eligible Persons, denominated in cash or in Stock or other property, in accordance with this Article VIII. Performance Awards may be denominated as a cash amount, number of shares of Stock, or specified number of other Awards or property (or a combination) which may be earned upon achievement or satisfaction of performance conditions specified by the Committee over a performance period established by the Committee. If the performance period is one year, then the Performance Award shall be deemed an Annual Incentive Award. In addition, the Committee may specify that any other Award shall constitute a Performance Award by conditioning the right of a Participant to exercise the Award or have it settled, and the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, including but not limited to those measures set forth in Section 8.02 below. After the end of each performance period, the Committee shall determine the amount, if any, of the Performance Award for that performance period payable to each Participant. The Committee may, in its discretion, determine that the amount payable to any Participant as a final Performance Award shall be reduced from the amount of his or her potential Performance Award, including a determination to make no final Award whatsoever, and may exercise its discretion to increase the amounts payable under any Performance Award. The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment or service by the Participant or other event (including a Change in Control) prior to the end of a performance period or otherwise prior to settlement of such Performance Awards. Settlement of Performance Awards shall be in cash, Stock, other Awards or other property, at the discretion of the Committee. 8.02 Performance Award Measures a. Performance Goals Generally. The performance goal for Performance Awards may consist of one or more of the business criteria listed in Section 8.02(b)(i), including or excluding the adjustments described in Section 8.02(b)(ii), and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee. The Performance Award may also have threshold levels of performance (below which no Performance Award shall be paid) and maximum levels of Performance Award, regardless of the degree to which the actual performance exceeds the target level. The performance goal may be objective. Any performance goal may be established for one performance period or averaged over time, as the Committee may deem appropriate. Performance may, but need not be, based on a change or an increase or positive result. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants. The targeted level or levels of performance with respect to such business criteria may be established at such levels and in such terms as the Committee may determine, in its discretion, including in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies, or any combination thereof. Horace Mann Educators Corporation 16

b. Business Criteria; Inclusion and Exclusion of Certain Items. i. Performance goals may be based on one or more of the following business criteria for the Company, on a consolidated basis, pre-tax or after-tax, and/or for specified subsidiaries or affiliates, other business units, or lines of business, or for any individual: (1) insurance premiums written, insurance premiums earned, contract deposits, contract charges earned, or policies or contracts in force; (2) increase in gross revenues; (3) income before realized investment gains and losses (operating income), before or after taxes, and income before or after interest, depreciation, amortization, or extraordinary, or unusual or infrequently occurring or special items; (4) income before realized investment gains and losses (operating income) per common share (basic or diluted), and income before realized investment gains and losses (operating income) from continuing operations per common share (basic or diluted); (5) return on equity (including operating income return on average equity), return on assets (gross or net), return on investment, or return on capital; (6) market capitalization; (7) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (8) book value of Stock, including or excluding the effect of unrealized investment gains and losses (FAS 115 or any successor thereto); (9) net interest margin; (10) annuity accumulated value or annuity accumulated value persistency; (11) net investment income and realized investment gains or losses (including on a per share basis); (12) economic value created; (13) operating margin or profit margin; (14) expense ratios, claims ratios, or loss ratios; (15) stock price or TSR; (16) shareholder equity or changes in shareholder equity; (17) dividends, including as a percentage of net income; (18) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration or geographic business expansion goals, cost targets, market share, premium levels, surplus levels, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, sales units, agent growth and goals relating to acquisitions, divestitures or joint ventures; (19) satisfaction of hiring goals; (20) financial or credit ratings; (21) results of objective customer satisfaction surveys; (22) satisfaction of diversity goals; (23) enterprise risk management; or (24) succession planning. ii. The Committee may provide in any Performance Award that any evaluation of performance may include or exclude any of the following items: (1) unusually large catastrophe losses which aggregate (net of reinsurance) in excess of “planned” catastrophe losses; (2) asset write-downs; (3) litigation or claim judgments or settlements; (4) the effect of changes in tax laws, accounting principles, regulations, or other laws or regulations affecting reported results; (5) any reorganization and restructuring programs; (6) acquisitions or divestitures; (7) extraordinary, or unusual or infrequently occurring items identified in the Company’s audited financial statements, including footnotes, (8) annual incentive payments, other bonuses or benefit plan charges; or (9) capital charges. c. Performance Award Pool. The Committee may establish a Performance Award pool, which shall be an unfunded pool, for purposes of measuring performance in connection with Performance Awards. The amount of such Performance Award pool may be based upon the achievement of one or more performance goals based on one or more of the business criteria set forth in Section 8.02(b) during the performance period, as specified by the Committee. The Committee may specify the amount of the Performance Award pool as a percentage of any of such business criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria. The maximum amount payable to any Participant shall be a stated percentage of the bonus pool; provided the sum of such percentages shall not exceed 100%. IX. Deferred Cash Sub-Plan 9.01 Deferred Cash Sub-Plan This Article IX providing for deferrals of certain amounts otherwise payable in cash shall constitute the Deferred Cash Sub-Plan (“Sub Plan”) within the Plan. To the extent the Sub-Plan results in deferral of income by employees to the termination of covered employment or beyond, the Sub-Plan is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees. Except as otherwise provided, the terms and conditions of this Sub-Plan apply solely to the Sub-Plan. Horace Mann Educators Corporation 17

9.02 Sub-Plan Definitions For purposes of this Sub-Plan, “Administrator” means the persons designated by the Committee to administer the Accounts under this Sub-Plan, or, if no such persons have been designated, the Committee. The Administrator shall have the powers and duties of the Committee and such additional powers and duties as are set forth in Section 9.03. “Deferred Cash Participant” means a Participant who is a current or former LTIP Employee or Non-Employee Director with an Account under the Sub-Plan. “Deferred Stock Equivalent Account” or “Account” means the bookkeeping account established by the Company in respect to each Deferred Cash Participant, to which shall be credited the amounts deferred by such Participant and, in the case of a Non-Employee Director, Company matching deferrals, as provided in the Sub-Plan and converted into fully vested RSUs pursuant to the Sub-Plan. “Distribution Date” means, with respect to any Subaccount, the date selected by the Deferred Cash Participant for distribution with respect to such Subaccount on an approved election form. The date selected may be a fixed date, the Deferred Cash Participant’s attainment of a particular age, the Deferred Cash Participant’s Separation from Service for any reason, or such other dates or circumstances as may be required or permitted by the Administrator with respect to a given deferral election. “LTIP Employee” means an Employee of the Company or an Affiliate eligible for Long-Term Bonus Compensation. “Long-Term Bonus Compensation” means the bonus payable under the Company’s long term incentive plan, as such plan shall exist from time to time. “Payment Date” means the date on which the Company would have paid an amount of compensation to the Deferred Cash Participant but for the such Participant’s deferral election with respect thereto. “Subaccount” means each subaccount of a Deferred Cash Participant in the Employees Plan or the Directors Plan as of December 31, 2009, plus, for periods after December 31, 2009, each subaccount of a Deferred Cash Participant’s Deferred Stock Equivalent Account maintained by the Administrator, to which is credited (i) in the case of a Director, the fees deferred under the Plan for each separate calendar year and Company matching deferrals attributable to such fees, and (ii) in the case of an LTIP Employee, the Long-Term Bonus Compensation deferred with respect to each election period. Subaccounts may be commingled on the Administrator’s records to the extent they are subject to identical distribution provisions. “Unforeseeable Emergency” is a severe financial hardship to the Deferred Cash Participant resulting from a sudden and unexpected illness or accident of the Deferred Cash Participant, the Deferred Cash Participant’s spouse, Beneficiary, or dependent (as defined in Code Section 152(a), without regard to subsections (b)(1), (b)(2) and (d)(1)(B)), the loss of the Deferred Cash Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Deferred Cash Participant. Horace Mann Educators Corporation 18

9.03 Sub-Plan Administration a. The Sub-Plan shall be administered by the Administrator. The action of a majority of the committee shall be deemed to be the action of the Administrator; provided that no member of the committee shall vote on any discretionary action with respect to such member’s own Deferred Stock Equivalent Account or status or action as a Deferred Cash Participant. In addition to the powers and subject to the limitations contained elsewhere in the Plan and the Sub-Plan, the Administrator shall have the sole and complete authority: (a) to impose such limitations, restrictions and conditions as the Administrator shall deem appropriate, (b) to interpret the Sub-Plan and to adopt, amend and rescind administrative guidelines, forms, and other rules and regulations relating to the Sub-Plan, (c) to correct defects in the Sub-Plan, supply omissions and correct administrative errors, and (d) to make all other determinations and to take all other actions necessary or advisable for the implementation and administration of the Sub-Plan. Notwithstanding the foregoing, the Administrator shall have no authority, discretion or power to alter or amend any terms or conditions specified in the Sub-Plan. The Administrator’s determinations on matters within the Administrator’s authority shall be conclusive and binding upon the Company, the Deferred Cash Participants, Beneficiaries and all other persons. 9.04 Deferral Elections a. LTIP Employees. An LTIP Employee may elect to defer receipt of all or a specified portion of any Long-Term Bonus Compensation otherwise payable in cash. b. Non-Employee Directors. A Non-Employee Director may elect to defer receipt of all or a specified portion of the Non-Employee Director’s cash annual retainer, cash annual committee chair’s fee, cash annual Chairman of the Board’s fee, cash Board meeting fees, cash Committee meeting fees, or other Director compensation otherwise payable in cash. c. Deferral Election. Deferral elections must be timely filed with the Company on forms (which may be electronic) approved by the Administrator. An LTIP Employee’s election shall include: the percentage or dollar amount of each applicable Long-Term Bonus Compensation payment to be deferred. A Non-Employee Director’s election shall include the percentage or dollar amount of cash fees to be deferred (which may be designated separately with respect to each type of cash fees). Each Deferred Cash Participant shall designate (i) the Distribution Date for such deferred payments and (ii) the form of distribution thereof. 9.05 Timing of Deferral Elections a. Initial Elections. An election to defer Long-Term Bonus Compensation payments shall be made on or before December 31 of the calendar year preceding the first calendar year in the performance period during which the Long-Term Bonus Compensation is earned. An election to defer cash Non-Employee Directors fees must be filed no later than December 31 preceding the calendar year in which the fees to be deferred are to be earned. Unless otherwise provided by the Administrator, deferral elections do not carry over from year to year. A new deferral election must be made with respect to amounts earned in each calendar year (or where longer than one year, each performance period). b. New LTIP Employees. Notwithstanding Section 9.05(a), with respect to an individual who first becomes an LTIP Employee during a calendar year, the LTIP Employee’s election must be made and filed within thirty (30) days of the date such individual first becomes an LTIP Employee; provided, however, that if the LTIP Employee has or ever had a Deferred Stock Equivalent Account under the Plan or has or ever had deferred compensation any other plan required by Code Section 409A to be aggregated with his or her Deferred Stock Equivalent Account, the preceding portion of this sentence shall not apply and the LTIP Employee may not make a deferral election with respect to Long-Term Bonus Compensation until the next calendar year, unless: i. he or she was not eligible to make a deferral election under this Sub-Plan (or under any other plan required by Code Section 409A to be aggregated with this Sub-Plan) at any time during the twenty-four (24)-month period ending on the date he or she again becomes an LTIP Employee, or ii. he or she was paid all nonqualified deferred compensation amounts previously due under the Sub-Plan (or under any other plan required by Code Section 409A to be aggregated with this Sub-Plan) and, on and before the date of the last such payment, was not eligible to continue to participate in this Sub-Plan (and any other plan required by Code Section 409A to be aggregated with this Sub-Plan) for periods after such payment. Horace Mann Educators Corporation 19

A deferral election under this Section 9.05(b) will be effective only with respect to Long-Term Bonus Compensation paid for services performed after such election. For this purpose, the amount of the bonus payable to the LTIP Employee for services rendered subsequent to the LTIP Employee’s election will be determined by multiplying the bonus by a fraction, the numerator of which is the number of calendar days remaining in the performance period after the election and the denominator of which is the total number of calendar days in such performance period. For this purpose, the date the executed election form (which may be electronic) is received by the Company. c. New Non-Employee Directors. Notwithstanding Section 9.05(a), with respect to the calendar year in which an individual first becomes a Non-Employee Director (either by election or appointment), the Non-Employee Director’s election must be made and filed: i. with respect to the annual Director’s fee, the annual committee chair’s fee, the annual Chairman of the Board’s fee, or other fees paid on an annual basis, prior to the date the individual becomes a Director; and ii. with respect to the Non-Employee Director’s meeting fees, within thirty (30) days after the date the individual becomes a Non-Employee Director (either by election or appointment), but only with respect to fees for meetings which occur after the date of such deferral election. An individual who was a Non-Employee Director, ceased being a Director, and again becomes a Non-Employee Director (either by election or appointment), shall be considered a new Non-Employee Director only if: iii. he or she was not eligible to make deferral elections under this Sub-Plan (or any other plan or arrangement required by Code Section 409A to be aggregated with this Sub-Plan) at any time during the twenty-four (24)-month period ending on the date he or she again becomes a Non-Employee Director, or iv. he or she was paid all nonqualified deferred compensation amounts previously due under the Sub-Plan (or under any other plan or arrangement required by Code Section 409A to be aggregated with the Sub- Plan) and, on and before the date of the last such payment, was not eligible to continue to participate in the Sub-Plan (or any other plan or arrangement required by Code Section 409A to be aggregated with the Sub-Plan) for periods after such payment. 9.06 Accounts a. Deferred Stock Equivalent Accounts. A Deferred Stock Equivalent Account and related Subaccounts shall be established for each Deferred Cash Participant. Amounts deferred by a Deferred Cash Participant shall be converted into fully vested RSUs as of the applicable Payment Date in a number determined by dividing the amount deferred (net of any applicable withholding) by the Fair Market Value of a share of Stock on the applicable Payment Date (rounded to two decimal places), and shall be credited to the Deferred Stock Equivalent Account as of such date. The Deferred Stock Equivalent Account shall be credited with Dividend Equivalents as provided in Section 9.06(b) and shall be reduced by the amount of any distributions as of the date of distribution. b. Dividend Equivalents. A Deferred Cash Participant’s Deferred Stock Equivalent Account shall be credited with Dividend Equivalents on the dividend distribution date with respect to each fully vested RSU credited to such Account on the applicable record date. Notwithstanding the foregoing, no Dividend Equivalents shall be credited to the Account of a Non-Employee Director Participant whose Separation from Service occurs prior to the applicable record date. c. Fractional Shares. Fractional shares shall be credited to a Deferred Cash Participant’s Deferred Stock Equivalent Account cumulatively, but distribution of the Deferred Stock Equivalent Account shall be made in accordance with Section 9.08. Horace Mann Educators Corporation 20

9.07 Distributions a. Timing of Payment. Each Subaccount in a Deferred Cash Participant’s Deferred Stock Equivalent Account shall be distributed or shall commence to be distributed promptly upon and in no event more than ninety (90) days following the Distribution Date; provided that if the applicable Distribution Date is the Deferred Cash Participant’s Separation from Service and as of the date of such Separation from Service the Deferred Cash Participant is a Specified Employee, the Subaccount shall be distributed or shall commence to be distributed on the Delayed Distribution Date. If the Deferred Cash Participant did not make an affirmative election as to the Distribution Date of any Subaccount, he or she shall be deemed to have elected the Deferred Cash Participant’s Separation from Service as the Distribution Date. b. Form of Payment. Each Subaccount in a Deferred Cash Participant’s Deferred Stock Equivalent Account shall be distributed in the form selected by the Deferred Cash Participant within the time period for making an initial deferral election with respect to such Subaccount, which shall be one of the following, subject to the remaining provisions of this Article IX. i. a single lump sum; or ii. installments over a period designated by the Deferred Cash Participant (not to exceed five (5) years). Except as otherwise provided in the Deferred Cash Participant’s deferral form, the first such installment shall be based on the number of fully vested RSUs credited to the Account on the first Distribution Date, divided by the number of installments. Subsequent installment payments shall be based on the same number of RSUs as the first installment (subject to adjustments as provided in Section 12.05), plus Dividend Equivalents accumulated on such number of RSUs since payment of the prior installment. The last installment shall include all amounts not previously distributed. For purposes of this Sub-Plan and Code Section 409A, the entitlement to installment payments is treated as the entitlement to a single payment. If the Deferred Cash Participant does not make an affirmative election as to the form of election of any Subaccount, he or she shall be deemed to have elected distribution of such Subaccount in a lump sum. Notwithstanding the foregoing, for avoidance of doubt, Accounts are subject to the provisions of Article XI (regarding Change in Control). 9.08 Medium of Payment a. Deferred Cash Participant Election. Distributions from a Deferred Cash Participant’s Deferred Stock Equivalent Account shall be made in shares of Stock (one share of Stock for each RSU subject to such distribution), or in cash in an amount equal to the number of RSUs subject to such distribution multiplied by the Fair Market Value of a share of Stock, as of the date of the distribution, as the Deferred Cash Participant may choose at such time and in such manner as may be permitted by the Administrator. b. Cash is Default Election. If the Deferred Cash Participant does not make an affirmative election as to the medium of payment, the Deferred Cash Participant shall be deemed to have elected a distribution in cash. 9.09 No Subsequent Elections as to Time and Form of Distribution a. Pre-2009 Subaccounts. Notwithstanding anything herein to the contrary, the Distribution Date and form of payment with respect to any Subaccount in existence as of January 1, 2009 shall be in accordance with the last election made or deemed made by the Deferred Cash Participant on or before December 31, 2008 with respect to such Subaccount. b. No Subsequent Deferral Elections. After December 31, 2008, no Deferred Cash Participant may change his or her Distribution Date or form of payment with respect to any Subaccount at any time after he or she makes the initial election. Horace Mann Educators Corporation 21

9.10 Payment Upon the Deferred Cash Participant’s Death In the event a Deferred Cash Participant dies before his or her entire Deferred Stock Equivalent Account is distributed, all undistributed amounts remaining in such Account shall be distributed to the Deferred Cash Participant’s Beneficiary promptly and in no event more than ninety (90) days after the Deferred Cash Participant’s death in a lump sum cash payment or other manner permitted by the Administrator. 9.11 Unforeseeable Emergencies a. Application for Distribution. In the event of an Unforeseeable Emergency, to the extent the Administrator determines that such action is necessary to alleviate the Unforeseeable Emergency, the Administrator may pay all or a part of a Deferred Cash Participant’s Account to the Deferred Cash Participant in cash, plus amounts necessary to pay federal, state or local income taxes and penalties reasonably anticipated to result from the distribution, after taking into account the extent to which such need is or may be relieved through reimbursement or compensation by insurance, by liquidation of the Deferred Cash Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship), or by cessation of deferrals under the Sub-Plan or another plan required by Code Section 409A to be aggregated with the Sub- Plan. Such action shall be taken only if the Deferred Cash Participant (or the Deferred Cash Participant’s legal representative or successor) submits a signed application describing fully the circumstances which are deemed to justify the payment, together with an estimate of the amounts necessary to alleviate the Unforeseeable Emergency (together with taxes on the distribution), which application shall be approved or denied by the Administrator after making such inquiries as the Administrator deems necessary or appropriate. b. Application for Cessation of Deferrals. In the event a Deferred Cash Participant requests a distribution due to an Unforeseeable Emergency, or the Deferred Cash Participant requests a cancellation of deferrals under the Plan in order to alleviate his or her Unforeseeable Emergency, and the Administrator determines that the Deferred Cash Participant’s Unforeseeable Emergency may be relieved through the cessation of some or all the Deferred Cash Participant’s deferral elections under the Plan for such calendar year, the Administrator shall permit cancellation of such deferral elections as appropriate to alleviate the Unforeseeable Emergency, shall be cancelled as soon as administratively practicable following such determination by the Administrator. 9.12 Claims Procedures Any Deferred Cash Participant or Beneficiary of a Deferred Cash Participant (“Applicant”) who believes he or she is entitled to a distribution from an Account or who desires to clarify his or her rights under this Sub-Plan may file a written claim for benefits with the Administrator. If a claim for benefits is denied, the Administrator shall furnish to the Applicant within 90 days after its receipt of such claim (or within 180 days after such receipt if special circumstances require an extension of time), a written notice which: (a) specifies the reasons for the denial, (b) refers to the pertinent provisions of the Sub-Plan on which the denial is based, (c) describes any additional material or information necessary for the perfection of the claim and explains why such material or information is necessary, and (d) explains the claim review procedures. Upon the written request of the Applicant submitted within 60 days after receipt of such written notice, the Administrator shall afford the Applicant a full and fair review of the decision denying the claim and, if so requested: (1) permit the Applicant to review any documents which are pertinent to the claim, (2) permit the Applicant to submit to the Administrator issues and comments in writing and (3) afford the Applicant an opportunity to meet with the Administrator as a part of the review procedure. Within 60 days after the Administrator’s receipt of a request for review (or within 120 days after such receipt if special circumstances, such as the need to hold a meeting, require an extension of time) the Administrator shall notify the Applicant in writing of the Administrator’s decision on appeal and the reasons for such decision, and shall refer the Applicant to the provisions of the Plan which form the basis for such decision. 9.13 Deferred Compensation Plan The Sub-Plan is a non-qualified plan of deferred compensation and Accounts represent 409A Compensation. No benefits under the Sub-Plan shall be subject to “grandfathering” treatment under Code Section 409A, even if such benefits were deferred and vested under the Employees’ Plan or the Directors’ Plan before January 1, 2005. The Company intends that amounts deferred under the Sub-Plan shall either be exempt from or comply with the restrictions of Section 409A of the Code, and the Plan (including the Sub-Plan) shall be administered, interpreted and construed at all times consistent with that intent. Horace Mann Educators Corporation 22

X. Certain Provisions Applicable to Awards 10.01Additional and Substitute Awards Awards granted under the Plan may, in the discretion of the Committee, be granted either in addition to, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any Affiliate, or any business entity acquired or to be acquired by the Company or an Affiliate, or any other right of a Deferred Cash Participant to receive payment from the Company or any Affiliate. Awards granted in addition to other Awards or awards may be granted either as of the same time as or a different time from the grant of such other Awards or awards. 10.02 Interest Awards may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the granting or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock. 10.03 Exemptions from Section 16(b) Liability With respect to a Participant who is then subject to the reporting requirements of Section 16(a) of the Exchange Act in respect of the Company, the Committee shall grant Awards under the Plan and otherwise administer the Plan in a manner so that the grant and exercise of each Award with respect to such a Participant may qualify for exemption from liability under Rule 16b-3 or otherwise not be subject to liability under Section 16(b), except that this provision shall not limit sales by such a Participant, and shall not limit a Participant’s ability to engage in other non-exempt transactions under the Plan. The Committee may authorize the Company to repurchase any Award or shares of Stock deliverable or delivered in connection with any Award in order to avoid a Participant who is subject to Section 16 of the Exchange Act incurring liability under Section 16(b). Unless otherwise specified by the Participant, equity securities or derivative securities acquired under the Plan which are disposed of by a Participant shall be deemed to be disposed of in the order acquired by the Participant. XI. Change in Control 11.01 Committee Discretion for Awards that are not 409A Compensation Unless otherwise provided in the Award Agreement, in the event there is any Change in Control, the Committee may, in its discretion, with respect to any Award or agreement that is not 409A Compensation, without the consent of the Participant, provide for any or all of the following to occur: a. the assumption or substitution of, or adjustment to, such outstanding Award or agreement; b. acceleration of the vesting of such Award and termination of any restrictions or performance conditions on such Award; or c. the cancellation of such Award or agreement for a payment to the Participant in cash or other property. The Committee may provide for the preceding to occur immediately upon the Change in Control or upon the termination of employment or service of the Participant initiated by the Company or an Affiliate other than for Cause (as defined below) within a fixed time (not to exceed two years) following the Change in Control. In addition, with respect to any unexercised Option or SAR, the Committee may extend the period for exercising the vested portion thereof for the greater of three (3) months following such a termination of employment or service within such fixed time (but only during the stated term of the Option or SAR). Horace Mann Educators Corporation 23

11.02 Effect of Change in Control on 409A Compensation a. 409A Change in Control. i. Awards that are 409A Compensation. Unless otherwise provided at the time of grant of an Award providing for 409A Compensation, in the event there is a 409A Change in Control, and within the one- year period thereafter, an affected Participant has a termination of employment or service initiated by the Company or an Affiliate other than for Cause as defined below, then such Participant’s Award shall become fully vested, any restrictions or performance conditions on such Award shall thereupon lapse; and the Award shall be settled as promptly as practicable but no more than 90 days following such termination, subject to Section 12.12(b). ii. Accounts. Unless otherwise provided at the time an election is made to defer cash compensation to an Account, if there is a 409A Change in Control, each affected Sub-Plan Participant shall receive, within ten (10) days of the date of such Change in Control, a lump sum distribution of his or her Deferred Stock Equivalent Account in cash. b. Non-409A Change in Control. The occurrence of a Change in Control that is not a 409A Change in Control with respect to an affected Participant shall have no effect per se on any 409A Compensation of that Participant. 11.03 “Cause” For purposes of this Article XI, the term “Cause” shall mean, unless otherwise defined in an Award agreement or employment or Change-of-Control agreement between the Company or a subsidiary and the Participant then in effect: a. A Participant’s conviction of any felony under federal law or the law of the state in which the act occurred; b. Dishonesty by the Participant in the course of fulfilling his or her employment duties or service duties to the Company or a subsidiary; or c. Willful and deliberate failure on the part of the Participant to perform his or her employment or service duties to the Company or a subsidiary in any material respect, after reasonable notice of the non-performance and opportunity to correct it. The existence of “Cause” shall be determined by the Committee or its delegate in its sole discretion. XII. General Provisions 12.01 Additional Award Forfeiture Provisions The Committee may condition a Participant’s right to receive a grant of an Award to be eligible to make a deferral under the Sub-Plan, to exercise an Award, to retain Stock, cash or other property acquired in connection with an Award or an Account, or to retain the profit or gain realized by a Participant in connection with an Award, including cash or other property received upon sale of Stock acquired in connection with an Award, upon compliance by the Participant with specified conditions relating to non-competition, confidentiality of information relating to the Company, non-solicitation of customers, suppliers, and employees of the Company, cooperation in litigation, non-disparagement of the Company and its officers, Directors and affiliates, and other requirements applicable to the Participant, as determined by the Committee, including during specified periods following termination of employment or service to the Company. Horace Mann Educators Corporation 24

12.02 Compliance with Legal and Other Requirements The Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of Stock or payment of other benefits under any Award until completion of such registration or qualification of such Stock or other required action under any federal or state law, rule or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Stock or other securities of the Company are listed or quoted, or compliance with any other obligation of the Company, as the Committee may consider appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Stock or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations. 12.03 Limits on Transferability; Beneficiaries The right of a Participant and his or her Beneficiary to receive payments or distributions hereunder, and Awards and other rights and interests of Participants and Beneficiaries shall not be subject in any manner to anticipation, alienation, sale, transfer (other than by will or the laws of descent and distribution or as provided below), assignment, pledge, hypothecation, encumbrance, attachment, lien, obligation or liability, or garnishment by creditors (collectively, “Assignment”) of a Participant or his or her Beneficiary (other than in favor of the Company or an Affiliate thereof). In addition, there shall be no transferability of any Award or other right or interest of any Participant or Beneficiary to any third-party financial institutions. Any attempted Assignment or transfer shall be void. Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative, except that Awards and other rights (other than ISOs and SARs in tandem therewith) may be transferred to one or more Permitted Transferees (as defined below) during the lifetime of the Participant, and may be exercised by such Permitted Transferees in accordance with the terms of such Award, but only if and to the extent such transfers are permitted by the Committee. “Permitted Transferee” shall mean, with respect to an employee who has transferred his or her award (but not in a transfer for value), any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister- in-law, including adoptive relationships, any person sharing the employee’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the employee) control the management of assets, and any other entity in which these persons (or the employee) own more than fifty percent of the voting interests. A Beneficiary, Permitted Transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee. 12.04 Designation of Beneficiary Each Participant may file with the Committee a written designation of one or more persons or revocable trusts as the Beneficiary who shall be entitled to receive the amount, if any, payable hereunder after the Participant’s death or to exercise an Award or to receive settlement of an Award after the Participant’s death. A Participant may, from time to time, revoke or change his or her Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Committee. The last such designation received by the Committee prior to the Participant’s death shall be controlling. If no such Beneficiary designation is in effect at the time of the Participant’s death, or if no designated Beneficiary survives the Participant, the Participant’s estate shall be deemed to have been designated his or her Beneficiary and the executor or administrator thereof shall receive the amount, if any, payable hereunder or exercise or receive settlement of an Award after the Participant’s death. If the Committee is in doubt as to the right of any person as Beneficiary, the Company may retain any amount in question until the rights thereto are determined, or the Company may pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Company therefor. Horace Mann Educators Corporation 25

12.05 Adjustments In the event that any large, special and non-recurring dividend or other distribution (whether in the form of cash or property other than Stock), recapitalization, forward or reverse split, Stock dividend, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Stock such that an adjustment is appropriate, or, in the case of any outstanding Award, necessary, in order to prevent dilution or enlargement of the rights of the Participant, then the Committee shall, in an equitable manner as determined by the Committee, adjust any or all of (i) the aggregate number and kind of shares of Stock which may be delivered in connection with Awards granted or Accounts established under the Plan, (ii) the number and kind of shares of Stock by which annual per person Award limitations are measured under Section 5.03, (iii) the number and kind of shares of Stock subject to or deliverable in respect of outstanding Awards or Accounts, (iv) the exercise price, grant price or purchase price relating to any Award or, if deemed appropriate, the Committee may make provision for a payment of cash or property to the holder of an outstanding Option, and (v) in the terms of RSUs under the Plan. 12.06 Tax Provisions a. Withholding. The Company and any Affiliate is authorized to withhold, at the time of grant or settlement or other time as appropriate, from any Award or Account, any payment relating to an Award or Account, including from a distribution of Stock, or any payroll or other payment to a Participant, amounts of withholding and other taxes required to be withheld by the Company or Affiliate. This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of the Company’s (or an Affiliate’s) withholding obligations, either on a mandatory or elective basis in the discretion of the Committee. The Committee is specifically authorized to allow Participants to satisfy withholding tax amounts by electing to have the Company (or an Affiliate) withhold from the shares of Stock to be delivered upon exercise of an Option or vesting or settlement of a Stock Award or Account that number of shares of Stock having a Fair Market Value equal to the amount required to be withheld. b. Required Consent to and Notification of Code Section 83(b) Election. No election under Code Section 83(b) (to include in gross income in the year of transfer the amounts specified in Code Section 83(b)) or under a similar provision of the laws of a jurisdiction outside the United States may be made unless expressly permitted by the terms of the Award Agreement or by action of the Committee in writing prior to the making of such election. In any case in which a Participant is permitted to make such an election in connection with an Award, the Participant shall notify the Committee of such election within ten days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Code Section 83(b) or other applicable provision. c. Requirement of Notification Upon Disqualifying Disposition Under Code Section 421(b). If any Participant shall make any disposition of shares of Stock delivered pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b) (relating to certain disqualifying dispositions), such Participant shall notify the Committee of such disposition within ten days thereof. d. Payment of Tax Amount. Notwithstanding anything herein to the contrary, in the event the Internal Revenue Service should finally determine that part or all of the value of a Participant’s Account which has not actually been distributed or an Award that has not been settled is nevertheless required to be included in the Participant’s or Beneficiary’s gross income for federal income tax purposes, then an amount necessary to pay applicable federal, state or local income taxes on such includible value shall be distributed from the Account or with respect to the Award in a lump sum cash payment within sixty (60) days after such determination, without the requirement of separate approval by the Committee. A “final determination” of the Internal Revenue Service is a determination in writing ordering the payment of additional tax, reporting of additional gross income or otherwise requiring an Account or portion thereof to be included in gross income, which is not appealable or which the Participant or Beneficiary does not appeal within the time prescribed for appeals. For avoidance of doubt, this Section 12.06(d) applies to all Awards and Accounts both 409A Compensation and non-409A Compensation. 12.07 Amendment and Termination of the Plan The Company, acting through its Board on the recommendation of the Compensation Committee, may at any time terminate, and from time to time may amend or modify the Plan; provided, however, that no amendment or modification Horace Mann Educators Corporation 26

may become effective without approval of the amendment or modification by the Shareholders if shareholder approval is required to enable the Plan to satisfy any applicable federal or state statutory or regulatory requirements; and provided further, that, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any Account or any outstanding Award (for this purpose, actions that alter the timing of federal income taxation of a Participant will not be deemed material unless such action results in an income tax penalty on the Participant). In no event may any amendment or termination of the Plan accelerate the date of payment or distribution of 409A Compensation, except as may be permitted under Code Section 409A. 12.08 No Repricing Without the approval of Shareholders, the Committee will not amend or replace previously granted Options in a transaction that constitutes a “repricing,” as such term is used in Section 303A.08 of the Listed Company Manual of the New York Stock Exchange, including but not limited to by means of cashing out options that whose exercise price is above the current Fair Market Value of a share of Stock. 12.09 Clawback; Right of Setoff Awards and Accounts are subject to the Company’s policy on recoveries and such other terms and conditions as the Committee may impose in the event the Committee determines a participant’s own misconduct contributed materially to his or her receipt of unearned amounts of cash, Stock or other property. The Company or any Affiliate may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company or an Affiliate may owe to the Participant from time to time, including amounts payable in connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff. By accepting any Award granted hereunder, the Participant agrees to any deduction or setoff under this Section 12.09. Any such setoff shall be subject to Section 12.12. Notwithstanding the foregoing, no setoff form 409A Compensation may be made if it results in acceleration or deferral of the permitted payment date under Code Section 409A. 12.10 Nonexclusivity of the Plan Neither the adoption of the Plan by the Board nor its submission to the Shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements, apart from the Plan, as it may deem desirable, including incentive arrangements, and such other arrangements may be either applicable generally or only in specific cases. 12.11 Successors All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise of all or substantially all of the business and/or assets of the Company. 12.12 Nature of Payments Unless otherwise specified in the Award Agreement, Awards shall be special incentive payments to the Participant and shall not be taken into account in computing the amount of salary or compensation of the Participant for purposes of determining any pension, retirement, death or other benefit under (a) any pension, retirement, profit-sharing, bonus, insurance or other employee benefit plan of the Company or any Affiliate, except as such plan shall otherwise expressly provide, or (b) any agreement between the Company or any Affiliate and the Participant, except as such agreement shall otherwise expressly provide. 12.13 Electronic Media Under procedures authorized or approved by the Committee, any form for any notice, election, designation, or similar communication required or permitted to be given to or received from a Participant under this Plan may be given or received in an electronic medium (including computer network, e-mail or voice response system) and any such communication to or from a Participant through such electronic media shall be fully effective under this Plan for such purposes as such procedures shall prescribe. Any record of such communication retrieved from such electronic medium under its normal storage and retrieval parameters shall be effective as a fully authentic executed writing for all purposes of this Plan absent manifest error in the storage or retrieval process. Horace Mann Educators Corporation 27

12.14 Payments in the Event of Forfeitures; Fractional Shares Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash consideration, the Participant shall be repaid the amount of such cash consideration, or if less, the Fair Market Value on the date of forfeiture of the shares of Stock for which the Participant paid. Distributions in Stock shall be made in whole shares only, with the value of any fractional share distributed in cash. 12.15 Code Section 409A Considerations a. Construction in Compliance with Code Section 409A. The Company intends that none of the grant, exercise, settlement or amendment or termination of any Award under the Plan will cause the Participant to be liable for payment of interest or a tax penalty under Code Section 409A. The provisions of the Plan and any Award Agreement shall be construed consistent with that intent. b. Six-Month Delay. Any distribution or settlement of 409A Compensation triggered by the Separation from Service of a Specified Employee that would otherwise be made prior to the Deferred Distribution Date (as defined below) shall not occur earlier than the Deferred Distribution Date. The “Deferred Distribution Date” is the day that is six (6) month and one (1) day after a Participant’s Separation from Service. c. Certain Grandfathered Awards. Awards that are “grandfathered” under Code Section 409A and that, but for such grandfathered status, would be deemed to be subject to Code Section 409A shall be subject to the terms and conditions of the 2002 Incentive Plan as amended and restated at May 26, 2005 other than Sections 6(b)(ii) and 6(c)(ii) thereof, provided that if any provision adopted by amendment to the 2002 Incentive Plan or an Award Agreement after October 3, 2004, would constitute a material modification of such grandfathered Award, such provision will not be effective as to such Award unless so stated by the Committee in writing with specific reference to revoking such grandfathered status. Notwithstanding the foregoing, no Accounts shall be “grandfathered” under Code Section 409A. 12.16 Governing Law The Plan and all agreements and forms hereunder shall be construed in accordance with and governed by the laws of the State of Delaware without giving effect to principles of conflicts of laws, and applicable provisions of federal law. 12.17 Awards to Participants Outside the United States The Committee may adopt rules and procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures for a Participant or group of participants who are then resident or primarily employed outside of the United States. Without limiting the generality of the foregoing, the Committee is specifically authorized (A) to adopt the rules and procedures regarding the conversion of local currency, withholding procedures and handling of stock certificates which vary with local requirements and (B) to adopt sub-plans in addition to the Sub-Plan, and Plan addenda as the Committee deems desirable, to accommodate foreign laws, regulations and practice; and (C) to modify the terms of any Award under the Plan in any manner deemed by the Committee to be necessary or appropriate in order that such Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant’s residence or employment abroad shall be comparable to the value of such an Award to a Participant who is resident or primarily employed in the United States. 12.18 Limitation on Rights Conferred under Plan Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or an Affiliate, (ii) interfering in any way with the right of the Company or an Affiliate to terminate any Eligible Person’s or Participant’s employment or service at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and employees, or (iv) conferring on a Participant any of the rights of a shareholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award. Except as expressly provided in the Plan or an Award Agreement, neither the Plan nor any Award Agreement shall confer on any person other than the Company and the Participant any rights or remedies thereunder. Horace Mann Educators Corporation 28

12.19 Severability; Entire Agreement If any of the provisions of this Plan or any Award Agreement are finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining provisions shall not be affected thereby; provided, that, if any of such provisions is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder. The Plan and any Award Agreements contain the entire agreement of the parties with respect to the subject matter thereof and supersede all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral with respect to the subject matter thereof. 12.20 Plan Term Unless earlier terminated by action of the Board of Directors, the Plan will remain in effect until such time as no Stock remains available for delivery under the Plan, and the Company has no further rights or obligations under the Plan with respect to outstanding Awards under the Plan; subject to Section 7.02 regarding Incentive Stock Options. 12.21 Gender and Number Except when otherwise indicated by the context, the masculine gender shall also include the feminine gender, and the definitions of any term herein in the singular shall also include the plural. 12.22 General Creditor Status With respect to Awards and Accounts not denominated in Stock or Restricted Stock, each Participant and Beneficiary shall be and remain an unsecured general creditor of the Company with respect to any payments due and owing to such Participant or Beneficiary hereunder. All payments to persons entitled to benefits hereunder shall be made out of the general assets of the Company and shall be solely the obligation of the Company. To the extent the Plan is a promise by the Company to pay benefits in the future and it is the intention of the Company and Participants that the Plan be “unfunded” for tax purposes (and for the purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended). Horace Mann Educators Corporation 29

EX-10.7

Exhibit 10.7

Director Compensation

The compensation program for non-employee Directors is shown in the following table:

Compensation Element	Non-Employee Director Compensation(1)
Board Chairman Annual Retainer	$125,000
Board Member Annual Retainer (other than Board Chairman)	$70,000
Committee Chairman Annual Retainer	$25,000 Audit Committee $15,000 all other Committees(2)
Technology Liaison Annual Retainer	$10,000
Share-based Compensation	Fair value on the date of the respective awards is used to determine the number of Restricted Stock Units ("RSUs") awarded. An annual award of $110,000 in RSUs following the Annual Shareholder Meeting. $110,000 in RSUs if joining the Board within six months after the prior Annual Shareholder Meeting, $55,000 in RSUs if joining more than six months after the prior Annual Shareholder Meeting but before the next Annual Shareholder Meeting. All awards have a 1-year vesting period.
Basic Group Term Life Insurance	Premium for $10,000 face amount
Business Travel Accident Insurance	Premium for $100,000 coverage

(1) Annual retainer fees are paid following the Annual Shareholder Meeting each year. The annual retainer fees are prorated to the extent that a non-employee Director joins the Board after the Annual Shareholder Meeting. Non-employee Directors may elect to defer cash compensation into RSUs.

(2) The Executive Committee Chair is not paid an Annual Retainer.

Last Revision Date: May 20, 2021

EX-11

Exhibit 11

Horace Mann Educators Corporation

Computation of Net Income per Share (Unaudited)

For the Three and Six Months Ended June 30, 2021 and 2020

(in millions, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Basic:
Net income	$	46.7	$	30.5	$	86.0	$	49.0
Weighted average number of common    shares during the period	42.0		41.9		42.0		41.9
Net income per share – basic	$	1.11	$	0.73	$	2.05	$	1.17
Diluted:
Net income	$	46.7	$	30.5	$	86.0	$	49.0
Weighted average number of common    shares during the period	42.0		41.9		42.0		41.9
Weighted average number of common equivalent    shares to reflect the dilutive effect of common    stock equivalent securities:
Stock options	—		—		0.1		—
Common stock units related to deferred    compensation for employees	—		—		—		—
Restricted common stock units related    to incentive compensation	0.1		0.1		—		0.1
Total common and common equivalent shares adjusted to calculate diluted earnings per share	42.1		42.0		42.1		42.0
Net income per share – diluted	$	1.11	$	0.73	$	2.04	$	1.17

EX-15

Exhibit 15

August 6, 2021

Horace Mann Educators Corporation

Springfield, Illinois

Re: Registration Statements on Form S-3 (No. 333-223627), Form S-4 (No. 333-223628) and Form S-8 (No. 33-47066, No. 33-45152, No. 333-16473, No. 333-74686, No. 333-98917, No. 333-171384 and No. 333-185231).

With respect to the subject registration statements, we acknowledge our awareness of the use therein of our report dated August 6, 2021 related to our review of interim financial information.

Pursuant to Rule 436 under the Securities Act of 1933 (the Act), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.

/s/ KPMG LLP

KPMG LLP

Chicago, Illinois

EX-31.1

Exhibit 31.1

Chief Executive Officer Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Marita Zuraitis, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2021 of Horace Mann Educators Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Marita Zuraitis
Marita Zuraitis, Chief Executive Officer
Horace Mann Educators Corporation
Date:	August 6, 2021

EX-31.2

Exhibit 31.2

Chief Financial Officer Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Bret A. Conklin, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2021 of Horace Mann Educators Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.   The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Bret A. Conklin
Bret A. Conklin,  Chief Financial Officer
Horace Mann Educators Corporation
Date:	August 6, 2021

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Horace Mann Educators Corporation (the "Company") on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Marita Zuraitis, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Marita Zuraitis
Marita Zuraitis
Chief Executive Officer
Date:	August 6, 2021

A signed original of this written statement required by Section 906 has been provided to Horace
Mann Educators Corporation and will be retained by Horace Mann Educators Corporation
and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Horace Mann Educators Corporation (the "Company") on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bret A. Conklin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Bret A. Conklin
Bret A. Conklin
Chief Financial Officer
Date:	August 6, 2021

A signed original of this written statement required by Section 906 has been provided to Horace
Mann Educators Corporation and will be retained by Horace Mann Educators Corporation
and furnished to the Securities and Exchange Commission or its staff upon request.

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, are not based on accounting principles generally accepted in the United States of America (non-GAAP) under applicable SEC rules because they are not displayed as separate line items in the Consolidated Statements of Operations or Consolidated Balance Sheets or are not required to be disclosed in the Notes to the Consolidated Financial Statements or, in some cases, there is inclusion or exclusion of certain items not ordinarily included or excluded in accordance with accounting principles generally accepted in the United States of America (GAAP).

In the opinion of the Company’s management, a discussion of these measures provides investors, financial analysts, rating agencies and other financial statement users with a better understanding of the significant factors that comprise the Company’s periodic results of operations and how management evaluates the Company's financial performance. Internally, the Company's management uses the measures to evaluate performance against historical results, to establish financial targets on a consolidated basis and for other reasons.

Some of these measures exclude net investment gains (losses), net of tax, and/or net unrealized investment gains on fixed maturity securities, net of tax, which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends.

Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by the Company’s management.

Book value per share excluding the fair value adjustment for investments - The result of dividing total shareholders’ equity excluding after tax net unrealized investment gains and losses on securities, including the related effect on certain deferred policy acquisition costs, by ending shares outstanding. Book value per share is the most directly comparable GAAP measure. Management believes it is useful to consider the trend in book value per share excluding net unrealized investment gains and losses on securities in conjunction with book value per share to identify and analyze the change in net worth. Management also believes the non-GAAP measure is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily financial market conditions, the magnitude and timing of which are generally not influenced by the Company’s underlying insurance operations.

Catastrophe costs - The sum of catastrophe losses, net of reinsurance and before income tax benefits that includes allocated loss adjustment expenses and reinsurance reinstatement premiums; excluding unallocated loss adjustment expenses.

Catastrophe losses - In categorizing property and casualty claims as being from a catastrophe, the Company utilizes the designations of the Property Claim Services, 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 claims and claim 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 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.

1

Core earnings (loss) - Consolidated net income (loss) excluding the after-tax impact of net investment gains (losses), discontinued operations, the after-tax impact of goodwill and intangible asset impairments, the effect of a change in tax laws and tax rates at enactment date, and cumulative effect of changes in accounting principles when applicable. Net income is the most comparable GAAP measure.

•Pretax core earnings (loss) - Pretax net income (loss) excluding pretax impact of net investment gains (losses), discontinued operations, pretax impact of goodwill and intangible asset impairments and cumulative effect of changes in accounting principles when applicable. Income before income taxes is the most comparable GAAP measure.

•Segment core earnings - Determined in the same manner as core earnings on a consolidated basis. Management uses segment core earnings to analyze each segment's performance and as a tool in making business decisions. Financial statement users also consider core earnings when analyzing the results and trends of insurance companies.

Core earnings (loss) per share - Core earnings on a per common share basis. Earnings per share is the most comparable GAAP measure.

Premiums written and contract deposits – Management utilizes this non-GAAP measure, which is based on statutory accounting principles, in analyzing and evaluating business growth. Premiums and contract charges earned is the most comparable GAAP measure.

Premiums written and contract deposits for the Company’s operating segments are as follows:

Property and Casualty

•Premiums written: Reflects the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the contract and reflect gross premiums written less premiums ceded to reinsurers. The difference between premiums written and premiums earned is premiums unearned.

Supplemental and Life

•Premiums written and contract deposits: Reflects (1) the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the contract and reflect gross premiums written less premiums ceded to reinsurers, and (2) the amount charged for policies in force during a fiscal period for traditional life business. Contract deposits include amounts received from customers on deposit-type contracts.

Retirement

•Net annuity contract deposits: Reflects total recurring deposits and single deposits/rollovers – net of contract deposits ceded to reinsurers.

Investment yield, excluding limited partnership interests, pretax and after tax - For the three month periods presented, investment yields are calculated by annualizing the result of year-to-date net investment income (adjusted to exclude net investment income from limited partnership interests for the corresponding period) divided by the average quarter-end and beginning of quarter carrying amount of invested assets as presented in the Consolidated Balance Sheets adjusted to exclude FHLB funding agreements, the carrying amount of limited partnership interests, and gross unrealized investment gains/losses. For full year periods presented, investment yields are calculated by (i) summing the investment yields for each respective three month period applicable to the year and (ii) dividing that sum per the calculation in (i) by four. Net investment income is the most directly comparable GAAP measure.

2

Net income return on equity - LTM: 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 - referred to as 5 quarter average shareholder's equity.

•Core return on equity - LTM: The ratio of (1) trailing 12 month core earnings to (2) 5 quarter average shareholders’ equity excluding net unrealized investment gains and losses on securities and the effect of a change in tax laws and tax rates at enactment date. Net income return on equity - LTM is the most comparable GAAP measure.

•Net income return on equity - Annualized: The ratio of (1) annualized net income to (2) the 2 quarter average shareholders' equity.

•Core return on equity - Annualized: The ratio of (1) annualized core earnings to (2) the 2 quarter average shareholders’ equity excluding net unrealized investment gains and losses on securities and the effect of a change in tax laws and tax rates at enactment date. Net income return on equity - Annualized is the most comparable GAAP measure.

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 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.

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 - The ratio of (1) the sum of net incurred losses and loss adjustment expenses to (2) net earned premiums.

•Underlying loss ratio - The sum of the Loss Ratio adjusted to remove the effect of catastrophe costs and prior years' reserve development. The Loss Ratio is the most directly comparable GAAP measure. Management believes this ratio provides a valuable measure of the Company's underlying underwriting performance that may be obscured by the effects of catastrophe costs and prior years' reserve development, the amounts of which may be significant and may vary significantly between periods.

•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 net investment income.

•Underlying combined ratio or combined ratio excluding catastrophe costs 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.  Management believes this ratio provides a valuable measure of the Company’s underlying underwriting performance that may be obscured by the effects of catastrophe costs and prior years’ reserve development, the amounts of which may be significant and may vary significantly between periods.

3

Sales – Sales data pertains to Horace Mann products and excludes authorized products sold by exclusive agents that are underwritten by third-party vendors Sales should not be viewed as a substitute for any GAAP measure, including "sales" as it relates to non-insurance companies, and the Company’s definition of sales, sales deposits or new annualized 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.

Sales for the Company’s operating segments are as follows:

Property and Casualty

•Sales: Sales are measured as premiums to be collected over the 12 months following the sale of new automobile and property policies.

Supplemental

•Sales: Based on application received date on the submitted policy and measured as the submitted annual premium.

Life

•Sales: Sales are measured as premiums to be collected over the 12 months following the sale of new life policy as well as increases in contributions to certain life business.

•Annualized sales: Annualized sales are based on the total yearly premium that the Company would expect to receive if all first year recurring premium policies would remain in-force, plus 10% of single and indexed universal life excess premiums. Annualized sales measure activity associated with gaining new insurance business in the current period, and includes deposits received related to universal life-type products.

4

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2021	Jul. 31, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	1-10890
Entity Registrant Name	HORACE MANN EDUCATORS CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	37-0911756
Entity Address, Address Line One	1 Horace Mann Plaza
Entity Address, City or Town	Springfield
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	62715-0001
City Area Code	217
Local Phone Number	789-2500
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	HMN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		41,487,113
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000850141
Current Fiscal Year End Date	--12-31

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Investments
Fixed maturity securities, available for sale, at fair value (amortized cost, net 2021, $6,049.4; 2020, $5,788.6)	$ 6,555.0	$ 6,345.3
Equity securities at fair value	145.7	121.6
Limited partnership interests	585.7	449.0
Short-term and other investments	301.1	346.3
Total investments	7,587.5	7,262.2
Cash	29.4	22.3
Deferred policy acquisition costs	236.0	229.8
Deposit asset on reinsurance	2,456.8	2,420.9
Intangible assets	151.9	158.5
Goodwill	43.5	43.5
Other assets	428.3	443.2
Separate Account (variable annuity) assets	3,256.7	2,891.4
Total assets	14,190.1	13,471.8
Policy liabilities
Investment contract and policy reserves	6,526.9	6,445.3
Unpaid claims and claim expenses	433.6	438.8
Unearned premiums	251.2	264.5
Total policy liabilities	7,211.7	7,148.6
Other policyholder funds	1,023.1	751.3
Other liabilities	468.5	453.1
Short-term debt	135.0	135.0
Long-term debt	278.5	302.3
Separate Account (variable annuity) liabilities	3,256.7	2,891.4
Total liabilities	12,373.5	11,681.7
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued	0.0	0.0
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2021, 66,432,547; 2020, 66,316,797	0.1	0.1
Additional paid-in capital	490.7	488.4
Retained earnings	1,494.4	1,434.6
Accumulated other comprehensive income (loss), net of tax:
Net unrealized investment gains on fixed maturity securities	332.2	366.3
Net funded status of benefit plans	(11.2)	(11.2)
Treasury stock, at cost, 2021, 24,942,264 shares; 2020, 24,902,579 shares	(489.6)	(488.1)
Total shareholders’ equity	1,816.6	1,790.1
Total liabilities and shareholders’ equity	$ 14,190.1	$ 13,471.8

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Fixed maturities, available for sale, amortized cost	$ 6,049.4	$ 5,788.6
Preferred stock, par value (in usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	66,432,547	66,316,797
Treasury stock (in shares)	24,942,264	24,902,579

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenues
Premiums and contract charges earned	$ 225.8	$ 225.4	$ 453.4	$ 461.7
Net investment income	109.2	80.4	204.7	162.7
Net investment gains (losses)	4.9	3.2	(4.1)	(15.3)
Other income	7.2	5.9	15.1	13.1
Total revenues	347.1	314.9	669.1	622.2
Benefits, losses and expenses
Benefits, claims and settlement expenses	147.1	143.0	281.4	281.7
Interest credited	51.2	50.7	101.8	102.2
Operating expenses	60.5	55.7	118.5	116.4
DAC unlocking and amortization expense	23.5	20.4	47.6	50.4
Intangible asset amortization expense	3.2	3.7	6.5	7.4
Interest expense	3.5	4.0	7.0	8.2
Total benefits, losses and expenses	289.0	277.5	562.8	566.3
Income before income taxes	58.1	37.4	106.3	55.9
Income tax expense	11.4	6.9	20.3	6.9
Net income	$ 46.7	$ 30.5	$ 86.0	$ 49.0
Net income per share
Basic (in usd per share)	$ 1.11	$ 0.73	$ 2.05	$ 1.17
Diluted (in usd per share)	$ 1.11	$ 0.73	$ 2.04	$ 1.17
Weighted average number of shares and equivalent shares
Basic (in shares)	42.0	41.9	42.0	41.9
Diluted (in shares)	42.1	42.0	42.1	42.0
Net income	$ 46.7	$ 30.5	$ 86.0	$ 49.0
Other comprehensive income (loss), net of tax:
Change in net unrealized investment gains (losses) on fixed maturity securities	88.6	142.5	(34.1)	48.7
Change in net funded status of benefit plans	0.0	0.0	0.0	0.0
Other comprehensive income (loss)	88.6	142.5	(34.1)	48.7
Comprehensive income (loss)	$ 135.3	$ 173.0	$ 51.9	$ 97.7

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Millions	Total	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss), net of tax	Treasury stock, at cost	Cumulative Effect, Period of Adoption, Adjustment Retained earnings
Beginning balance at Dec. 31, 2019		$ 0.1	$ 481.0	$ 1,352.5	$ 219.7	$ (485.9)	$ (0.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Options exercised and conversion of common stock units and restricted stock units			0.2
Share-based compensation expense			2.5
Net income	$ 49.0			49.0
Dividends, 2021, $0.31, $0.62 per share; 2020, $0.30, $0.60 per share				(25.3)
Change in net unrealized investment gains (losses) on fixed maturity securities					48.7
Acquisition of shares	(2.2)
Ending balance at Jun. 30, 2020	1,639.8	0.1	483.7	1,375.7	268.4	(488.1)
Beginning balance at Mar. 31, 2020		0.1	481.9	1,357.8	125.9	(488.1)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Options exercised and conversion of common stock units and restricted stock units			0.4
Share-based compensation expense			1.4
Net income	30.5			30.5
Dividends, 2021, $0.31, $0.62 per share; 2020, $0.30, $0.60 per share				(12.6)
Change in net unrealized investment gains (losses) on fixed maturity securities					142.5
Ending balance at Jun. 30, 2020	1,639.8	0.1	483.7	1,375.7	268.4	(488.1)
Beginning balance at Dec. 31, 2020	1,790.1	0.1	488.4	1,434.6	355.1	(488.1)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Options exercised and conversion of common stock units and restricted stock units			(1.2)
Share-based compensation expense			3.5
Net income	86.0			86.0
Dividends, 2021, $0.31, $0.62 per share; 2020, $0.30, $0.60 per share				(26.2)
Change in net unrealized investment gains (losses) on fixed maturity securities					(34.1)
Acquisition of shares	(1.5)
Ending balance at Jun. 30, 2021	1,816.6	0.1	490.7	1,494.4	321.0	(489.6)
Beginning balance at Mar. 31, 2021		0.1	489.2	1,460.8	232.4	(489.6)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense			1.5
Net income	46.7			46.7
Dividends, 2021, $0.31, $0.62 per share; 2020, $0.30, $0.60 per share				(13.1)
Change in net unrealized investment gains (losses) on fixed maturity securities					88.6
Ending balance at Jun. 30, 2021	$ 1,816.6	$ 0.1	$ 490.7	$ 1,494.4	$ 321.0	$ (489.6)

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Stockholders' Equity [Abstract]
Common stock, par value (in usd per share)	$ 0.001	$ 0.001	$ 0.001	$ 0.001
Cash dividends (in usd per share)	$ 0.31	$ 0.30	$ 0.62	$ 0.60

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows - operating activities
Net income	$ 86.0	$ 49.0
Adjustments to reconcile net income to net cash provided by operating activities:
Net investment losses	4.1	15.3
Amortization of premiums and accretion of discounts on fixed maturity securities, net	1.7	2.8
Depreciation and intangible asset amortization	11.1	11.7
Share-based compensation expense	3.8	2.8
Changes in:
Accrued investment income	(3.3)	(0.5)
Insurance liabilities	35.6	38.4
Premium receivables	4.5	2.1
Deferred policy acquisition costs	1.6	1.5
Reinsurance recoverables	(1.3)	(2.9)
Income tax liabilities	6.5	7.2
Other operating assets and liabilities	(12.0)	16.7
Other	(21.7)	21.5
Net cash provided by operating activities	116.6	165.6
Fixed maturity securities
Purchases	(872.3)	(818.2)
Sales	163.8	294.2
Maturities, paydowns, calls and redemptions	443.7	372.4
Equity securities
Purchases	(36.1)	(11.8)
Sales and repayments	0.7	12.1
Limited partnership interests
Purchases	(141.4)	(30.3)
Sales	41.2	5.7
Change in short-term and other investments, net	57.3	(19.1)
Net cash used in investing activities	(343.1)	(195.0)
Cash flows - financing activities
Dividends paid to shareholders	(25.7)	(24.8)
FHLB borrowings	1.0	4.0
Principal repayment on FHLB borrowings	(25.0)	0.0
Acquisition of treasury stock	(1.5)	(2.2)
Proceeds from exercise of stock options	0.3	0.9
Withholding tax payments on RSUs tendered	(2.0)	(1.5)
Annuity contracts: variable, fixed and FHLB funding agreements:
Deposits	515.9	325.0
Benefits, withdrawals and net transfers to Separate Account (variable annuity) assets	(216.2)	(196.9)
Life policy accounts:
Deposits	4.4	4.6
Withdrawals and surrenders	(2.1)	(2.1)
Change in deposit asset on reinsurance	(13.0)	(19.9)
Change in book overdrafts	(2.5)	(0.8)
Net cash provided by financing activities	233.6	86.3
Net increase in cash	7.1	56.9
Cash at beginning of period	22.3	25.5
Cash at end of period	$ 29.4	$ 82.4

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Basis of Presentation and Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Significant Accounting Policies

Business

Horace Mann Educators Corporation is a holding company for insurance subsidiaries that market and underwrite personal lines of property and casualty insurance products (primarily personal lines of automobile and property insurance), supplemental insurance products (primarily cancer, heart, hospital, supplemental disability and accident coverages), retirement products (primarily tax-qualified fixed and variable annuities) and life insurance products, primarily to K-12 teachers, administrators and other employees of public schools and their families (collectively, HMEC, the Company or Horace Mann).

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in conformity with GAAP, but are not required for interim reporting purposes, have been omitted. These Consolidated Financial Statements and Notes thereto should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Part II - Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

The accompanying Consolidated Financial Statements and Notes thereto are unaudited. These financial statements reflect all adjustments (generally consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position, results of operations and cash flows for the interim periods. The Company's significant accounting policies are summarized in Part II - Item 8, Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Consolidation

All intercompany transactions and balances between HMEC and its subsidiaries and affiliates have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the reporting date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities (including evaluation of impairments), evaluation of goodwill and intangible assets for impairment, valuation of annuity and life deferred policy acquisition costs, valuation of liabilities for property and casualty unpaid claims and claim expenses and valuation of certain investment contracts and policy reserves.

Future Adoption of New Accounting Standards

Accounting for Long-Duration Insurance Contracts

In August 2018, the FASB issued accounting and disclosure guidance that contains targeted improvements to the accounting for long-duration insurance contracts. Under the new guidance, the cash flow assumptions used to measure the liability for future policy benefits for traditional insurance contracts will be required to be updated at least annually with changes recognized as a benefit expense (i.e., assumptions will no longer be locked-in).

Insurance entities will be required to use a standard discount rate to measure the liabilities that will be equivalent to the yield from a high-quality bond. The new guidance also changes the amortization of deferred policy acquisition costs (DAC) to be on a constant-level basis over the expected term of the related contracts with no interest accruing on the DAC balance. The new guidance also introduces a new category of contract features associated with deposit type contracts referred to as market risk benefits (MRBs). Contract features meeting the definition of a MRB will be measured at fair value. New disclosures will be required for long-duration insurance contracts in order to provide better transparency into the exposure of insurance entities and the drivers of their results. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2022, including interim periods within those years. With regards to the liability for future policy benefits and DAC, the guidance applies to contracts in force as of the beginning of the earliest period presented and may be applied retrospectively. With regards to MRBs, the guidance is to be applied retrospectively at the beginning of the earliest period presented. Early adoption is permitted. Management is currently evaluating the impact this guidance will have on the results of operations and financial position of the Company.

Subsequent Events

On July 14, 2021, the Company announced that it entered into a Stock Purchase Agreement (Agreement), by and among the Company and Independence Capital Corp. and Independence Holding Company (Seller) to acquire all the equity interests in Madison National Life Insurance Company, Inc., an insurance company organized under the laws of the State of Wisconsin (Madison National). The Agreement provides, among other things, that, upon the terms and subject to the conditions set forth in the Agreement, the Company will acquire all the equity interests in Madison National (Acquisition) for $172.5 million. The Seller will have a potential earn-out of up to $12.5 million payable in cash, if specified financial targets are achieved by the end of 2023. The Agreement and the consummation of the transactions contemplated by the Agreement have been approved by the Company’s Board of Directors. The closing of the Acquisition is expected to occur early during the first quarter of 2022, subject to the satisfaction or waiver of applicable closing conditions as well as approval by certain regulators.

Further, effective July 12, 2021, the Company, as borrower, amended its Credit Agreement with PNC Bank, National Association as administrative agent and certain lenders party thereto to increase the line of credit available under the Credit Agreement’s senior revolving credit facility from $225.0 million to $325.0 million. PNC Bank, National Association and JPMorgan Chase Bank, N.A. serve as joint lead arrangers under the Credit Agreement, with The Northern Trust Company, KeyBank National Association, U.S. Bank National Association, Illinois National Bank, and Comerica Bank as lenders participating in the syndicate.

The Company expects to utilize the Credit Agreement’s senior revolving credit facility to fund a portion of the acquisition of Madison National, as well as to be available for ongoing working capital, capital expenditures and general corporate expenditures.

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Investments

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investments

Net Investment Income

The components of net investment income for the following periods were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fixed maturity securities	$	59.4	$	58.9	$	117.4	$	118.3
Equity securities	1.3		1.2		2.4		2.4
Limited partnership interests	23.0		(3.5)		34.3		(6.2)
Short-term and other investments	2.9		2.8		5.7		5.7
Investment expenses	(2.5)		(2.9)		(4.6)		(5.1)
Net investment income - investment portfolio	84.1		56.5		155.2		115.1
Investment income - deposit asset on reinsurance	25.1		23.9		49.5		47.6
Total net investment income	$	109.2	$	80.4	$	204.7	$	162.7

Net Investment Gains (Losses)

Net investment gains (losses) for the following periods were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fixed maturity securities	$	1.5	$	(0.7)	$	(3.9)	$	0.4
Equity securities	4.4		7.1		1.7		(7.6)
Short-term investments and other	(1.0)		(3.2)		(1.9)		(8.1)
Net investment gains (losses)	$	4.9	$	3.2	$	(4.1)	$	(15.3)

The Company, from time to time, sells fixed maturity securities subsequent to the reporting date that were considered temporarily impaired at such reporting date. Such sales are due to issuer specific events occurring subsequent to the reporting date that result in a change in the Company's intent to sell a fixed maturity security. The types of events that may result in a sale include significant changes in the economic facts and circumstances related to the invested asset, significant unforeseen changes in liquidity needs, or changes in the Company's investment strategy.

Net Investment Gains (Losses) by Transaction Type

The following table reconciles net investment gains (losses) by transaction type:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Credit loss impairments(1)	$	—	$	—	$	(1.1)	$	—
Intent-to-sell impairments	—		(0.5)		(2.1)		(4.2)
Total impairments on investments recognized in net income	—		(0.5)		(3.2)		(4.2)
Sales and other, net	1.6		0.4		(0.5)		4.9
Change in fair value - equity securities	4.3		6.6		1.5		(7.9)
Change in fair value and losses realized on settlements - derivatives	(1.0)		(3.3)		(1.9)		(8.1)
Net investment gains (losses)	$	4.9	$	3.2	$	(4.1)	$	(15.3)

(1)    For the six months ended June 30, 2021, the Company recognized a valuation allowance of $1.1 million for credit loss impairments with respect to fixed maturity securities available for sale.

Fixed Maturity Securities

The Company's investment portfolio is comprised primarily of fixed maturity securities. Amortized cost, net, gross unrealized investment gains (losses) and fair values of all fixed maturity securities in the portfolio were as follows:

($ in millions)	Amortized Cost, net		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2021
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:(1)
Mortgage-backed securities	$	610.8	$	68.0	$	0.5	$	678.3
Other, including U.S. Treasury securities	430.5		31.0		5.3		456.2
Municipal bonds	1,598.6		200.9		0.4		1,799.1
Foreign government bonds	40.2		4.2		—		44.4
Corporate bonds	2,211.3		202.5		5.0		2,408.8
Other asset-backed securities	1,158.0		22.7		12.5		1,168.2
Totals	$	6,049.4	$	529.3	$	23.7	$	6,555.0
December 31, 2020
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:(1)
Mortgage-backed securities	$	605.5	$	79.6	$	0.3	$	684.8
Other, including U.S. Treasury securities	395.0		39.2		1.0		433.2
Municipal bonds	1,612.3		215.7		0.5		1,827.5
Foreign government bonds	40.2		4.9		—		45.1
Corporate bonds	1,905.2		221.6		3.9		2,122.9
Other asset-backed securities	1,230.4		24.1		22.7		1,231.8
Totals	$	5,788.6	$	585.1	$	28.4	$	6,345.3

(1)    Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $380.3 million and $387.1 million; Federal Home Loan Mortgage Corporation (FHLMC) of $331.9 million and $344.3 million; and Government National Mortgage Association (GNMA) of $123.8 million and $132.3 million as of June 30, 2021 and December 31, 2020, respectively.

The following table presents the fair value and gross unrealized losses for fixed maturity securities in an unrealized loss position at June 30, 2021 and December 31, 2020, respectively. The Company views the decrease in fair value of all of the fixed maturity securities with unrealized losses at June 30, 2021 — which was driven largely by increasing interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. As of June 30, 2021, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell the fixed maturity securities with unrealized losses before an anticipated recovery in value. Therefore, it was determined that the unrealized losses on the fixed maturity securities presented in the table below were not indicative of any impairments as of June 30, 2021.

($ in millions)	12 Months or Less					More than 12 Months					Total
	Fair Value			Gross Unrealized Losses		Fair Value			Gross Unrealized Losses		Fair Value			Gross Unrealized Losses
June 30, 2021
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	13.9		$	0.3	$	3.0		$	0.2	$	16.9		$	0.5
Other	113.2			5.3		—			—		113.2			5.3
Municipal bonds	24.0			0.3		0.7			0.1		24.7			0.4
Foreign government bonds	—			—		—			—		—			—
Corporate bonds	142.3			3.8		38.8			1.2		181.1			5.0
Other asset-backed securities	136.0			1.0		262.8			11.5		398.8			12.5
Total	$	429.4		$	10.7	$	305.3		$	13.0	$	734.7		$	23.7
Number of positions with a    gross unrealized loss	267					154					421
Fair value as a percentage of total fixed    maturity securities at fair value	6.5		%			4.7		%			11.2		%
December 31, 2020
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	4.9		$	0.1	$	2.6		$	0.2	$	7.5		$	0.3
Other	95.9			1.0		—			—		95.9			1.0
Municipal bonds	18.1			0.5		—			—		18.1			0.5
Foreign government bonds	—			—		—			—		—			—
Corporate bonds	126.6			3.7		10.9			0.2		137.5			3.9
Other asset-backed securities	316.9			17.2		409.3			5.5		726.2			22.7
Total	$	562.4		$	22.5	$	422.8		$	5.9	$	985.2		$	28.4
Number of positions with a    gross unrealized loss	308					123					431
Fair value as a percentage of total fixed    maturity securities at fair value	8.9		%			6.7		%			15.6		%

Fixed maturity securities with an investment grade rating represented 85.6% of the gross unrealized losses as of June 30, 2021. With respect to fixed maturity securities involving securitized financial assets, the underlying collateral cash flows were stress tested to determine there was no adverse change in the present value of cash flows below the amortized cost basis.

Maturities of Fixed Maturity Securities

The following table presents the distribution of the Company’s fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments.

($ in millions)	Percent of Total Fair Value				June 30, 2021
	June 30, 2021		December 31, 2020		Fair Value		Amortized Cost, net
Estimated expected maturity:
Due in 1 year or less	3.9	%	4.0	%	$	254.9	$	247.8
Due after 1 year through 5 years	26.6	%	28.3	%	1,745.1		1,655.2
Due after 5 years through 10 years	28.4	%	28.0	%	1,861.9		1,702.2
Due after 10 years through 20 years	24.3	%	24.6	%	1,595.1		1,433.7
Due after 20 years	16.8	%	15.1	%	1,098.0		1,010.5
Total	100.0	%	100.0	%	$	6,555.0	$	6,049.4
Average option-adjusted duration, in years	6.8		6.4

Sales of Fixed Maturity and Equity Securities

Proceeds received from sales of fixed maturity and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each period were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fixed maturity securities
Proceeds received	$	68.3	$	196.0	$	163.8	$	294.2
Gross gains realized	1.7		5.5		3.0		10.3
Gross losses realized	(0.2)		(5.6)		(3.6)		(5.9)
Equity securities
Proceeds received	$	0.3	$	10.6	$	0.7	$	12.1
Gross gains realized	0.1		1.7		0.2		2.0
Gross losses realized	—		(1.2)		—		(1.8)

Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities

The following table reconciles net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in accumulated other comprehensive income (AOCI), before the impact of DAC:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net unrealized investment gains (losses)    on fixed maturity securities, net of tax
Beginning of period	$	287.2	$	149.9	$	439.8	$	264.4
Change in net unrealized investment gains    (losses) on fixed maturity securities	116.9		174.9		(42.1)		71.2
Reclassification of net investment (gains) losses    on securities to net income	(4.7)		5.1		1.7		(5.7)
End of period	$	399.4	$	329.9	$	399.4	$	329.9

Limited Partnership Interests

Investments in limited partnership interests are accounted for using the equity method of accounting and include interests in senior commercial mortgage loan funds, hedge funds, infrastructure debt funds, infrastructure equity funds and other funds. Principal factors influencing carrying amount appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. The Company recognizes an impairment loss for equity method limited partnership interests when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. The carrying amounts of equity method limited partnership interests were as follows:

($ in millions)
	June 30, 2021		December 31, 2020
Senior commercial mortgage loan funds	$	254.8	$	149.6
Hedge funds	50.7		63.2
Infrastructure debt funds	58.1		58.3
Infrastructure equity funds	57.3		52.1
Other funds(1)	164.8		125.8
Total	$	585.7	$	449.0

(1)Other funds consist primarily of limited partnership interests in real estate equity funds, private equity funds and corporate mezzanine funds.

Offsetting of Assets and Liabilities

The Company's derivatives are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provide that the Company will receive or pledge financial collateral in the event minimum thresholds have been reached. The following table presents instruments that were subject to a master netting arrangement for the Company.

($ in millions)			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts						Financial Instruments		Cash Collateral Received		Net Amount
June 30, 2021
Asset derivatives:
Free-standing derivatives	$	15.4	$	—	$	15.4	$	13.6	$	3.3	$	(1.5)
December 31, 2020
Asset derivatives:
Free-standing derivatives	$	16.8	$	—	$	16.8	$	13.7	$	2.6	$	0.5

Deposits

At June 30, 2021 and December 31, 2020, fixed maturity securities with a fair value of $26.6 million and $26.9 million, respectively, were on deposit with governmental agencies as required by law in various states for which the insurance subsidiaries of HMEC conduct business. In addition, at June 30, 2021 and December 31, 2020, fixed maturity securities with a fair value of $974.8 million and $707.3 million, respectively, were on deposit with the Federal Home Loan Bank of Chicago (FHLB) as collateral for amounts subject to funding agreements, advances and borrowings which were equal to $887.5 million at June 30, 2021 and $644.5 million at December 31, 2020. The deposited securities are reported as Fixed maturity securities on the Company’s Consolidated Balance Sheets.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

The Company is required to disclose estimated fair values for certain financial and nonfinancial assets and liabilities. Fair values of the Company’s insurance contracts other than annuity contracts (which are investment contracts) are not required to be disclosed. However, the estimated fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk through the matching of investment maturities with amounts due under insurance contracts.

Information regarding the three-level hierarchy presented below and the valuation methodologies utilized by the Company to estimate fair values at each reporting date is included in Part II - Item 8, Note 3 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Financial Instruments Measured and Carried at Fair Value on a Recurring Basis

The following table presents the Company's fair value hierarchy for those financial assets and financial liabilities measured and carried at fair value on a recurring basis. During the six months ended June 30, 2021 and 2020, there were no transfers between Level 1 and Level 2. At June 30, 2021, Level 3 invested assets comprised 4.7% of the Company’s total investment portfolio at fair value.

($ in millions)	Carrying Amount		Fair Value		Fair Value Measurements at Reporting Date Using
					Level 1		Level 2		Level 3
June 30, 2021
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally    sponsored agency obligations:
Mortgage-backed securities	$	678.3	$	678.3	$	—	$	678.3	$	—
Other, including U.S. Treasury securities	456.2		456.2		28.0		428.2		—
Municipal bonds	1,799.1		1,799.1		—		1,740.5		58.6
Foreign government bonds	44.4		44.4		—		44.4		—
Corporate bonds	2,408.8		2,408.8		14.6		2,243.7		150.5
Other asset-backed securities	1,168.2		1,168.2		—		1,052.7		115.5
Total fixed maturity securities	6,555.0		6,555.0		42.6		6,187.8		324.6
Equity securities	145.7		145.7		40.0		105.4		0.3
Short-term investments	93.5		93.5		90.4		3.1		—
Other investments	46.8		46.8		—		46.8		—
Totals	$	6,841.0	$	6,841.0	$	173.0	$	6,343.1	$	324.9
Separate Account (variable annuity) assets(1)	$	3,256.7	$	3,256.7	$	3,256.7	$	—	$	—
Financial Liabilities
Investment contract and policy reserves,  embedded derivatives	$	2.8	$	2.8	$	—	$	2.8	$	—
Other policyholder funds, embedded derivatives	$	108.9	$	108.9	$	—	$	—	$	108.9
December 31, 2020
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally    sponsored agency obligations:
Mortgage-backed securities	$	684.8	$	684.8	$	—	$	673.7	$	11.1
Other, including U.S. Treasury securities	433.2		433.2		18.4		414.8		—
Municipal bonds	1,827.5		1,827.5		—		1,767.9		59.6
Foreign government bonds	45.1		45.1		—		45.1		—
Corporate bonds	2,122.9		2,122.9		14.9		1,952.2		155.8
Other asset-backed securities	1,231.8		1,231.8		—		1,103.5		128.3
Total fixed maturity securities	6,345.3		6,345.3		33.3		5,957.2		354.8
Equity securities	121.6		121.6		39.2		82.1		0.3
Short-term investments	141.8		141.8		137.7		4.1		—
Other investments	36.3		36.3		—		36.3		—
Totals	$	6,645.0	$	6,645.0	$	210.2	$	6,079.7	$	355.1
Separate Account (variable annuity) assets(1)	$	2,891.4	$	2,891.4	$	2,891.4	$	—	$	—
Financial Liabilities
Investment contract and policy reserves,  embedded derivatives	$	2.5	$	2.5	$	—	$	2.5	$	—
Other policyholder funds, embedded derivatives	$	104.5	$	104.5	$	—	$	—	$	104.5

(1)    Separate Account (variable annuity) liabilities are equal to the estimated fair value of the Separate Account (variable annuity) assets.

Changes in Level 3 Fair Value Measurements

The reconciliation for all financial assets and financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows:

($ in millions)	Financial Assets												Financial Liabilities(1)
	Municipal Bonds		Corporate Bonds		Mortgage-Backed and Other Asset- Backed Securities(2)		Total Fixed Maturity Securities		Equity Securities		Total
Beginning balance, April 1, 2021	$	58.6	$	149.1	$	132.2	$	339.9	$	0.3	$	340.2	$	107.6
Transfers into Level 3(3)	—		28.5		3.1		31.6		—		31.6		—
Transfers out of Level 3(3)	—		(29.4)		(13.3)		(42.7)		—		(42.7)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		3.2
Net unrealized investment gains  (losses) included in OCI	0.3		3.2		1.3		4.8		—		4.8		—
Purchases	—		—		—		—		—		—		—
Issuances	—		—		—		—		—		—		1.2
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.3)		(0.9)		(7.8)		(9.0)		—		(9.0)		(3.1)
Ending balance, June 30, 2021	$	58.6	$	150.5	$	115.5	$	324.6	$	0.3	$	324.9	$	108.9
Beginning balance, January 1, 2021	$	59.6	$	155.8	$	139.4	$	354.8	$	0.3	$	355.1	$	104.5
Transfers into Level 3(3)	—		52.6		6.2		58.8		—		58.8		—
Transfers out of Level 3(3)	—		(56.7)		(19.2)		(75.9)		—		(75.9)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		7.5
Net unrealized investment gains  (losses) included in OCI	(0.6)		1.2		1.0		1.6		—		1.6		—
Purchases	—		—		—		—		—		—		—
Issuances	—		—		—		—		—		—		1.9
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.4)		(2.4)		(11.9)		(14.7)		—		(14.7)		(5.0)
Ending balance, June 30, 2021	$	58.6	$	150.5	$	115.5	$	324.6	$	0.3	$	324.9	$	108.9

(1)Represents embedded derivatives, all related to the Company's fixed indexed annuity products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets.

(2)Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities.

(3)Transfers into and out of Level 3 during the three and six months ended June 30, 2021 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

($ in millions)	Financial Assets												Financial Liabilities(1)
	Municipal Bonds		Corporate Bonds		Mortgage-Backed and Other Asset- Backed Securities(2)		Total Fixed Maturity Securities		Equity Securities		Total
Beginning balance, April 1, 2020	$	104.9	$	111.7	$	140.5	$	357.1	$	0.1	$	357.2	$	87.5
Transfers into Level 3(3)	10.7		14.0		64.2		88.9		—		88.9		—
Transfers out of Level 3(3)	(45.9)		(4.2)		(3.4)		(53.5)		—		(53.5)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		6.0
Net unrealized investment gains  (losses) included in OCI	3.8		5.3		3.3		12.4		—		12.4		—
Purchases	—		—		—		—		—		—		—
Issuances	—		—		—		—		—		—		2.5
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.3)		(0.5)		(4.5)		(5.3)		—		(5.3)		(2.4)
Ending balance, June 30, 2020	$	73.2	$	126.3	$	200.1	$	399.6	$	0.1	$	399.7	$	93.6
Beginning balance, January 1, 2020	$	44.3	$	104.0	$	146.8	$	295.1	$	0.1	$	295.2	$	93.7
Transfers into Level 3(3)	74.5		32.8		86.7		194.0		—		194.0		—
Transfers out of Level 3(3)	(45.9)		(14.2)		(6.4)		(66.5)		—		(66.5)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		0.9
Net unrealized investment gains  (losses) included in OCI	0.8		(0.2)		(21.1)		(20.5)		—		(20.5)		—
Purchases	—		6.9		1.9		8.8		—		8.8		—
Issuances	—		—		—		—		—		—		3.9
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.5)		(3.0)		(7.8)		(11.3)		—		(11.3)		(4.9)
Ending balance, June 30, 2020	$	73.2	$	126.3	$	200.1	$	399.6	$	0.1	$	399.7	$	93.6

(1)    Represents embedded derivatives, all related to the Company's fixed indexed annuity products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets.

(2)    Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities.

(3)    Transfers into and out of Level 3 during the three and six months ended June 30, 2020 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

For the six months ended June 30, 2021 and June 30, 2020, the Company had no net investment gains or losses on Level 3 financial assets. For the three and six months ended June 30, 2021, the Company had $3.2 million and $7.5 million of net investment losses that were included in net income and were attributable to changes in the fair value of Level 3 financial liabilities; for the three and six months ended June 30, 2020, the respective net investment losses were $6.0 million and $0.9 million.

Quantitative Information about Level 3 Fair Value Measurements

The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized within Level 3.

($ in millions)
Financial Assets	Fair Value at June 30, 2021		Valuation Technique(s)	Unobservable Inputs	Range (Weighted Average) and Single Point Best Estimate(1)
Municipal bonds	$	58.6	discounted cash flow	I spread(2)	307 - 391 bps
Corporate bonds	150.5		discounted cash flow	N spread(3)	272 - 553 bps
			market comparable	option adjusted spread	12.54%
Other asset-backed securities	115.5		vendor price	haircut	3.00% - 5.00%
			discounted cash flow	constant prepayment rate	20.00%
			discounted cash flow	T spread(4)	235 - 800 bps
			discounted cash flow	PDI interest margin(5)	7.13%
			discounted cash flow	SBL interest margin(6)	4.50%
Government mortgage-backed securities	—		vendor price	haircut	3.00% - 5.00%
Equity securities	0.3		Black Scholes	equity value	low - 31.00%; high - 41.00%

($ in millions)
Financial Liabilities	Fair Value at June 30, 2021		Valuation Technique(s)	Unobservable Inputs	Range (Weighted Average) and Single Point Best Estimate(1)
Derivatives embedded in fixed indexed annuity products	$	108.9	discounted cash flow	lapse rate	5.30%
				mortality multiplier(7)	63.00%
				option budget	0.90% - 2.50%
				non-performance adjustment(8)	5.00%

(1)    When a range of unobservable inputs is not readily available, the Company uses a single point best estimate.

(2)    "I spread" is the interpolated weighted average life point on the "on the run" (OTR) point of the curve.

(3)    "N spread" is the interpolated weighted average life point on the swap curve.

(4)    "T spread" is a specific point on the OTR curve.

(5)    "PDI" stands for private debt investment.

(6)    "SBL" stands for broadly syndicated loans.

(7)    Mortality multiplier is applied to the Annuity 2000 table.

(8)    Determined as a percentage of a risk-free rate.

The valuation techniques and significant unobservable inputs used in the fair value measurement for financial assets and financial liabilities classified as Level 3 are subject to the control processes as described in Part II - Item 8, Note 3 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Generally, valuation techniques for fixed maturity securities include spread pricing, matrix pricing and discounted cash flow methodologies; include inputs such as quoted prices for identical or similar securities that are less liquid; and are based on lower levels of trading activity than securities classified as Level 2. The valuation techniques and significant unobservable inputs used in the fair value measurement for equity securities classified as Level 3 use similar valuation techniques and significant unobservable inputs as those used for fixed maturity securities.

The sensitivity of the estimated fair values to changes in the significant unobservable inputs for fixed maturity and equity securities included in Level 3 include: benchmark yield, liquidity premium, estimated cash flows, prepayment and default speeds, spreads, weighted average life, and credit rating. Significant spread widening in isolation will adversely impact the overall valuation, while significant tightening will lead to substantial valuation increases. Significant increases (decreases) in illiquidity premiums in isolation will result in substantially lower (higher) valuations. Significant increases (decreases) in expected default rates in isolation will result in substantially lower (higher) valuations.

Financial Instruments Not Carried at Fair Value; Disclosure Required

The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. These financial assets and financial liabilities are further described in Part II - Item 8, Note 3 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The following table presents the carrying amount, fair value and fair value hierarchy of these financial assets and financial liabilities.

($ in millions)	Carrying Amount		Fair Value		Fair Value Measurements at Reporting Date Using
					Level 1		Level 2		Level 3
June 30, 2021
Financial Assets
Other investments	$	160.7	$	164.3	$	—	$	—	$	164.3
Deposit asset on reinsurance	2,456.8		2,948.5		—		—		2,948.5
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	4,911.3		5,031.5		—		—		5,031.5
Investment contract and policy reserves, account values on life contracts	101.4		110.9		—		—		110.9
Other policyholder funds	914.2		914.2		—		857.7		56.5
Short-term debt	135.0		135.0		—		—		135.0
Long-term debt	278.5		313.6		—		313.6		—
December 31, 2020
Financial Assets
Other investments	$	168.3	$	172.1	$	—	$	—	$	172.1
Deposit asset on reinsurance	2,420.9		3,030.6		—		—		3,030.6
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	4,847.6		4,963.3		—		—		4,963.3
Investment contract and policy reserves, account values on life contracts	98.7		108.4		—		—		108.4
Other policyholder funds	646.8		646.8		—		590.7		56.1
Short-term debt	135.0		135.0		—		—		135.0
Long-term debt	302.3		331.1		—		331.1		—

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Deposit Asset on Reinsurance

6 Months Ended

Jun. 30, 2021

Reinsurance Disclosures [Abstract]

Deposit Asset on Reinsurance

In the second quarter of 2019, the Company reinsured a $2.9 billion block of in force fixed and variable annuity business with a minimum crediting rate of 4.5%. This represented approximately 50% of the Company’s in force fixed annuity account balances. The arrangement contains investment guidelines and a trust to help meet the Company’s risk management objectives.

Under the agreement, approximately $2.2 billion of fixed annuity reserves were reinsured on a coinsurance basis. The separate account assets and liabilities of approximately $0.7 billion were reinsured on a modified coinsurance basis and thus, remain on the Company's consolidated financial statements, but the related results of operations are fully reinsured.

The Company determined that the reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk. Therefore, the Company recognizes the reinsurance agreement using the deposit method of accounting. The assets transferred to the reinsurer as consideration paid is reported as a Deposit asset on reinsurance on the Company's Consolidated Balance Sheets. As amounts are received or paid, consistent with the underlying reinsured contracts, the Deposit asset on reinsurance is adjusted. The Deposit asset on reinsurance is accreted to the estimated ultimate cash flows using the interest method and the adjustment is reported as Net investment income. Interest accreted on the Deposit asset on reinsurance was $25.1 million and $49.5 million for the three and six months ended June 30, 2021, respectively. Interest accreted on the Deposit asset on reinsurance was $23.9 million and $47.6 million for the three and six months ended June 30, 2020, respectively.

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

The Company conducts impairment testing for goodwill and intangible assets at least annually, or more often if events, changes or circumstances indicate that the carrying amount may not be recoverable. See Part II - Item 8, Note 1 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 for further description of impairment testing.

There were no changes in the carrying amount of goodwill by reporting unit for the three months ended June 30, 2021. The carrying amount of goodwill by reporting unit as of June 30, 2021 was as follows:

($ in millions)	June 30, 2021
Property and Casualty	$	9.5
Supplemental	19.6
Retirement	4.5
Life	9.9
Total	$	43.5

As of June 30, 2021, the outstanding amounts of definite-lived intangible assets subject to amortization are attributable to the acquisitions of Benefit Consultants Group, Inc. (BCG) and NTA Life Enterprises, LLC (NTA) during 2019. The acquisition of BCG resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $14.1 million and the acquisition of NTA resulted in initial recognition of definite-lived intangible assets subject to amortization in the amount of $160.4 million. As of June 30, 2021 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows:

($ in millions)	Weighted Average
	Useful Life (in Years)
At inception:
Value of business acquired	30	$	94.4
Value of distribution acquired	17	54.0
Value of agency relationships	14	17.0
Value of customer relationships	10	9.1
Total	23	174.5
Accumulated amortization and impairments:
Value of business acquired		(14.3)
Value of distribution acquired		(10.2)
Value of agency relationships		(5.2)
Value of customer relationships		(3.7)
Total		(33.4)
Net intangible assets subject to amortization:		$	141.1

With regards to the definite-lived intangible assets in the table above, the value of business acquired intangible asset represents the present value of the expected underwriting profit within policies that were in force on the date of acquisition. The value of distribution acquired intangible asset represents the present value of future business to be written by the existing agency force. The value of agency relationships intangible asset represents the present value of the commission overrides retained by NTA. The value of customer relationships intangible asset represents the present value of the expected profits from existing BCG customers in force at the date of acquisition. All of the aforementioned definite-lived intangible assets were valued using the income approach.

Estimated future amortization of the Company's definite-lived intangible assets were as follows:

($ in millions)
Year Ending December 31,
2021 (excluding the six months ended June 30, 2021)	$	6.4
2022	12.1
2023	11.2
2024	10.5
2025	9.8
Thereafter	91.1
Total	$	141.1

The value of business acquired intangible asset is being amortized by product based on the present value of future premiums to be received. The value of distribution acquired intangible asset is being amortized on a straight-line basis. The value of agency relationships intangible asset is being amortized based on the present value of future premiums to be received. The value of customer relationships intangible asset is being amortized based on the present value of future profits to be received.

Indefinite-lived intangible assets (not subject to amortization) as of June 30, 2021 were as follows:

($ in millions)
Trade names	$	7.9
State licenses	2.9
Total	$	10.8

The trade names intangible asset represents the present value of future savings accruing to NTA and BCG by virtue of not having to pay royalties for the use of the trade names, valued using the relief from royalty method. The state licenses intangible asset represents the regulatory licenses held by NTA that were valued using the cost approach.

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Unpaid Claims and Claim Expenses

6 Months Ended

Jun. 30, 2021

Insurance Loss Reserves [Abstract]

Unpaid Claims and Claim Expenses

The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both a gross and net (after reinsurance) basis. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the period gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets.

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Property and Casualty
Beginning gross reserves(1)	$	374.1	$	382.2	$	372.2	$	387.0
Less: reinsurance recoverables	112.5		119.0		112.9		120.5
Net reserves, beginning of period(2)	261.6		263.2		259.3		266.5
Incurred claims and claim expenses:
Claims occurring in the current period	118.1		109.1		212.9		214.6
Decrease in estimated reserves for claims occurring in prior periods(3)	(4.2)		(1.0)		(4.2)		(2.0)
Total claims and claim expenses incurred(4)	113.9		108.1		208.7		212.6
Claims and claim expense payments for claims occurring during:
Current period	79.1		61.4		113.5		104.9
Prior periods	36.9		37.5		95.0		101.8
Total claims and claim expense payments	116.0		98.9		208.5		206.7
Net reserves, end of period(2)	259.5		272.4		259.5		272.4
Plus: reinsurance recoverables	108.9		116.1		108.9		116.1
Ending gross reserves(1)	$	368.4	$	388.5	$	368.4	$	388.5

(1)Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $65.2 million and $56.1 million as of June 30, 2021 and 2020, respectively, in addition to Property and Casualty reserves.

(2)Reserves net of anticipated reinsurance recoverables.

(3)Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs.

(4)Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $33.2 million and $72.7 million for the three and six months ended June 30, 2021, respectively, in addition to Property and Casualty amounts. Benefits, claims and settlement expenses for Supplemental, Retirement and Life of $34.9 million and $69.1 million for the three and six months ended June 30, 2020, respectively.

Net favorable development of total reserves for Property and Casualty claims occurring in prior years was $4.2 million and $2.0 million for the six months ended June 30, 2021 and 2020, respectively. The favorable development for the six months ended June 30, 2021 was the result of favorable loss trends in automobile and homeowners loss emergence for accident years 2020 and prior. The favorable development for the six months ended June 30, 2020 was the result of favorable loss trends in automobile and homeowners loss emergence for accident years 2019 and prior.

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Reinsurance

6 Months Ended

Jun. 30, 2021

Insurance [Abstract]

Reinsurance

The Company recognizes the cost of reinsurance premiums over the contract periods for such premiums in proportion to the insurance protection provided. Amounts recoverable from reinsurers for unpaid claims and claim settlement expenses, including estimated amounts for unsettled claims, claims incurred but not yet reported and policy benefits, are estimated in a manner consistent with the insurance liability associated with the policy. The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows:

($ in millions)	Gross Amount		Ceded to Other Companies(1)		Assumed from Other Companies		Net Amount
Three months ended June 30, 2021
Premiums written and contract deposits(2)	$	351.2	$	5.6	$	2.5	$	348.1
Premiums and contract charges earned	231.5		8.1		2.4		225.8
Benefits, claims and settlement expenses	144.6		(1.0)		1.5		147.1
Three months ended June 30, 2020
Premiums written and contract deposits(2)	$	332.4	$	6.4	$	3.1	$	329.1
Premiums and contract charges earned	230.6		8.3		3.1		225.4
Benefits, claims and settlement expenses	143.3		2.4		2.1		143.0
Six months ended June 30, 2021
Premiums written and contract deposits(2)	$	671.8	$	11.5	$	4.0	$	664.3
Premiums and contract charges earned	465.7		16.5		4.2		453.4
Benefits, claims and settlement expenses	280.2		1.5		2.7		281.4
Six months ended June 30, 2020
Premiums written and contract deposits(2)	$	666.1	$	12.7	$	4.5	$	657.9
Premiums and contract charges earned	473.8		16.7		4.6		461.7
Benefits, claims and settlement expenses	282.8		4.3		3.2		281.7

(1)    Excludes the annuity reinsurance transaction accounted for using the deposit method that is discussed in Note 4.

(2)    This measure is not based on accounting principles generally accepted in the United States of America (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as Exhibit 99.1 in the Company's reports filed with the SEC.

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Commitments

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments

Investment Commitments

The Company has outstanding commitments to fund investments primarily in limited partnership interests. Such unfunded commitments were $786.3 million and $571.9 million as of June 30, 2021 and December 31, 2020, respectively.

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Segment Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Information

The Company conducts and manages its business through five segments. The four operating segments, representing the major lines of business, are: Property and Casualty (primarily personal lines automobile and property insurance products), Supplemental (primarily cancer, heart, hospital, supplemental disability and accident coverages), Retirement (primarily tax-qualified fixed and variable annuities) and Life (life insurance products). The Company does not allocate the impact of corporate-level transactions to these operating segments, consistent with the basis for management's evaluation of the results of those segments, but classifies those items in the fifth segment, Corporate and Other. In addition to ongoing transactions such as corporate debt service, net investment gains (losses) and certain public company expenses, such items also have included corporate debt retirement costs, when applicable. Summarized financial information for these segments is as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Premiums and contract charges earned
Property and Casualty	$	155.0	$	156.2	$	310.8	$	322.7
Supplemental	31.6		33.3		63.3		66.3
Retirement	9.2		6.7		17.8		14.1
Life	30.0		29.2		61.5		58.6
Total	$	225.8	$	225.4	$	453.4	$	461.7
Net investment income
Property and Casualty	$	21.7	$	6.3	$	32.5	$	16.6
Supplemental	6.3		4.0		11.6		7.5
Retirement	62.0		55.1		122.4		108.6
Life	19.8		15.6		39.4		31.2
Corporate and Other	(0.1)		—		(0.1)		(0.1)
Intersegment eliminations	(0.5)		(0.6)		(1.1)		(1.1)
Total	$	109.2	$	80.4	$	204.7	$	162.7
Net income (loss)
Property and Casualty	$	19.3	$	11.3	$	47.2	$	37.9
Supplemental	12.0		9.5		23.4		20.0
Retirement	11.5		9.7		22.1		8.8
Life	5.0		1.9		5.7		2.5
Corporate and Other	(1.1)		(1.9)		(12.4)		(20.2)
Total	$	46.7	$	30.5	$	86.0	$	49.0

($ in millions)	June 30, 2021		December 31, 2020
Assets
Property and Casualty	$	1,313.2	$	1,324.9
Supplemental	855.0		811.5
Retirement	9,800.6		9,198.7
Life	2,142.9		2,044.5
Corporate and Other	158.9		182.3
Intersegment eliminations	(80.5)		(90.1)
Total	$	14,190.1	$	13,471.8

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

AOCI represents the accumulated change in shareholders’ equity from transactions and other events and circumstances from non-shareholder sources. For the Company, AOCI includes the after tax change in net unrealized investment gains (losses) on fixed maturity securities and the after tax change in net funded status of benefit plans for the periods as shown in the Consolidated Statements of Changes in Shareholders’ Equity. The following table reconciles these components.

($ in millions)	Net Unrealized Investment  Gains (Losses)  on Securities(1)		Net Funded Status of Benefit Plans(1)		Total(1)
Beginning balance, April 1, 2021	$	243.6	$	(11.2)	$	232.4
Other comprehensive income (loss) before reclassifications	93.3		—		93.3
Amounts reclassified from AOCI(2)	(4.7)		—		(4.7)
Net current period other comprehensive income (loss)	88.6		—		88.6
Ending balance, June 30, 2021	$	332.2	$	(11.2)	$	321.0
Beginning balance, April 1, 2020	$	136.6	$	(10.7)	$	125.9
Other comprehensive income (loss) before reclassifications	147.5		—		147.5
Amounts reclassified from AOCI(3)	(5.0)		—		(5.0)
Net current period other comprehensive income (loss)	142.5		—		142.5
Ending balance, June 30, 2020	$	279.1	$	(10.7)	$	268.4
Beginning balance, January 1, 2021	$	366.3	$	(11.2)	$	355.1
Other comprehensive income (loss) before reclassifications	(35.8)		—		(35.8)
Amounts reclassified from AOCI(2)	1.7		—		1.7
Net current period other comprehensive income (loss)	(34.1)		—		(34.1)
Ending balance, June 30, 2021	$	332.2	$	(11.2)	$	321.0
Beginning balance, January 1, 2020	$	230.4	$	(10.7)	$	219.7
Other comprehensive income (loss) before reclassifications	43.0		—		43.0
Amounts reclassified from AOCI(3)	5.7		—		5.7
Net current period other comprehensive income (loss)	48.7		—		48.7
Ending balance, June 30, 2020	$	279.1	$	(10.7)	$	268.4

(1)All amounts are net of tax.

(2)The pretax amounts reclassified from AOCI, $5.9 million and $(2.2) million, are included in Net investment gains (losses) and the related income tax expenses, $1.2 million and $(0.5) million, are included in income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2021, respectively.

(3)    The pretax amounts reclassified from AOCI, $6.4 million and $(7.2) million, are included in Net investment gains (losses) and the related income tax expenses, $1.4 million and $(1.5) million, are included in Income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2020, respectively.

Comparative information for elements that are not required to be reclassified in their entirety to net income in the same reporting period is disclosed in Note 2.

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Supplemental Consolidated Cash and Cash Flow Information

6 Months Ended

Jun. 30, 2021

Supplemental Cash Flow Elements [Abstract]

Supplemental Consolidated Cash and Cash Flow Information

($ in millions)
	June 30, 2021		December 31, 2020
Cash	$	28.3	$	21.8
Restricted cash	1.1		0.5
Total cash and restricted cash reported in the Consolidated Balance Sheets	$	29.4	$	22.3

($ in millions)	Six Months Ended June 30,
	2021		2020
Cash paid (recovered) during the three months for:
Interest	$	6.8	$	8.2
Income taxes	13.4		(0.6)

Non-cash investing activities with respect to modifications or exchanges of fixed maturity securities as well as paid-in-kind activity for policy loans were insignificant for the three and six months ended June 30, 2021 and 2020, respectively.

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Basis of Presentation and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in conformity with GAAP, but are not required for interim reporting purposes, have been omitted. These Consolidated Financial Statements and Notes thereto should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Part II - Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

The accompanying Consolidated Financial Statements and Notes thereto are unaudited. These financial statements reflect all adjustments (generally consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position, results of operations and cash flows for the interim periods. The Company's significant accounting policies are summarized in Part II - Item 8, Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Consolidation

Consolidation

All intercompany transactions and balances between HMEC and its subsidiaries and affiliates have been eliminated.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the reporting date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities (including evaluation of impairments), evaluation of goodwill and intangible assets for impairment, valuation of annuity and life deferred policy acquisition costs, valuation of liabilities for property and casualty unpaid claims and claim expenses and valuation of certain investment contracts and policy reserves.

Future Adoption of New Accounting Standards

Future Adoption of New Accounting Standards

Accounting for Long-Duration Insurance Contracts

In August 2018, the FASB issued accounting and disclosure guidance that contains targeted improvements to the accounting for long-duration insurance contracts. Under the new guidance, the cash flow assumptions used to measure the liability for future policy benefits for traditional insurance contracts will be required to be updated at least annually with changes recognized as a benefit expense (i.e., assumptions will no longer be locked-in).

Insurance entities will be required to use a standard discount rate to measure the liabilities that will be equivalent to the yield from a high-quality bond. The new guidance also changes the amortization of deferred policy acquisition costs (DAC) to be on a constant-level basis over the expected term of the related contracts with no interest accruing on the DAC balance. The new guidance also introduces a new category of contract features associated with deposit type contracts referred to as market risk benefits (MRBs). Contract features meeting the definition of a MRB will be measured at fair value. New disclosures will be required for long-duration insurance contracts in order to provide better transparency into the exposure of insurance entities and the drivers of their results. For public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2022, including interim periods within those years. With regards to the liability for future policy benefits and DAC, the guidance applies to contracts in force as of the beginning of the earliest period presented and may be applied retrospectively. With regards to MRBs, the guidance is to be applied retrospectively at the beginning of the earliest period presented. Early adoption is permitted. Management is currently evaluating the impact this guidance will have on the results of operations and financial position of the Company.

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Investments (Tables)

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Components of net investment income

The components of net investment income for the following periods were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fixed maturity securities	$	59.4	$	58.9	$	117.4	$	118.3
Equity securities	1.3		1.2		2.4		2.4
Limited partnership interests	23.0		(3.5)		34.3		(6.2)
Short-term and other investments	2.9		2.8		5.7		5.7
Investment expenses	(2.5)		(2.9)		(4.6)		(5.1)
Net investment income - investment portfolio	84.1		56.5		155.2		115.1
Investment income - deposit asset on reinsurance	25.1		23.9		49.5		47.6
Total net investment income	$	109.2	$	80.4	$	204.7	$	162.7

Schedule of net investment gains (losses)

Net investment gains (losses) for the following periods were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fixed maturity securities	$	1.5	$	(0.7)	$	(3.9)	$	0.4
Equity securities	4.4		7.1		1.7		(7.6)
Short-term investments and other	(1.0)		(3.2)		(1.9)		(8.1)
Net investment gains (losses)	$	4.9	$	3.2	$	(4.1)	$	(15.3)

The following table reconciles net investment gains (losses) by transaction type:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Credit loss impairments(1)	$	—	$	—	$	(1.1)	$	—
Intent-to-sell impairments	—		(0.5)		(2.1)		(4.2)
Total impairments on investments recognized in net income	—		(0.5)		(3.2)		(4.2)
Sales and other, net	1.6		0.4		(0.5)		4.9
Change in fair value - equity securities	4.3		6.6		1.5		(7.9)
Change in fair value and losses realized on settlements - derivatives	(1.0)		(3.3)		(1.9)		(8.1)
Net investment gains (losses)	$	4.9	$	3.2	$	(4.1)	$	(15.3)

(1)    For the six months ended June 30, 2021, the Company recognized a valuation allowance of $1.1 million for credit loss impairments with respect to fixed maturity securities available for sale.

Unrealized gains and losses on fixed maturities and equity securities

Amortized cost, net, gross unrealized investment gains (losses) and fair values of all fixed maturity securities in the portfolio were as follows:

($ in millions)	Amortized Cost, net		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2021
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:(1)
Mortgage-backed securities	$	610.8	$	68.0	$	0.5	$	678.3
Other, including U.S. Treasury securities	430.5		31.0		5.3		456.2
Municipal bonds	1,598.6		200.9		0.4		1,799.1
Foreign government bonds	40.2		4.2		—		44.4
Corporate bonds	2,211.3		202.5		5.0		2,408.8
Other asset-backed securities	1,158.0		22.7		12.5		1,168.2
Totals	$	6,049.4	$	529.3	$	23.7	$	6,555.0
December 31, 2020
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:(1)
Mortgage-backed securities	$	605.5	$	79.6	$	0.3	$	684.8
Other, including U.S. Treasury securities	395.0		39.2		1.0		433.2
Municipal bonds	1,612.3		215.7		0.5		1,827.5
Foreign government bonds	40.2		4.9		—		45.1
Corporate bonds	1,905.2		221.6		3.9		2,122.9
Other asset-backed securities	1,230.4		24.1		22.7		1,231.8
Totals	$	5,788.6	$	585.1	$	28.4	$	6,345.3

(1)    Fair value includes securities issued by Federal National Mortgage Association (FNMA) of $380.3 million and $387.1 million; Federal Home Loan Mortgage Corporation (FHLMC) of $331.9 million and $344.3 million; and Government National Mortgage Association (GNMA) of $123.8 million and $132.3 million as of June 30, 2021 and December 31, 2020, respectively.

Summary of fair value and gross unrealized losses of fixed maturity securities and equity securities in an unrealized loss position

The following table presents the fair value and gross unrealized losses for fixed maturity securities in an unrealized loss position at June 30, 2021 and December 31, 2020, respectively. The Company views the decrease in fair value of all of the fixed maturity securities with unrealized losses at June 30, 2021 — which was driven largely by increasing interest rates, spread widening, financial market illiquidity and/or market volatility from the date of acquisition — as temporary. As of June 30, 2021, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell the fixed maturity securities with unrealized losses before an anticipated recovery in value. Therefore, it was determined that the unrealized losses on the fixed maturity securities presented in the table below were not indicative of any impairments as of June 30, 2021.

($ in millions)	12 Months or Less					More than 12 Months					Total
	Fair Value			Gross Unrealized Losses		Fair Value			Gross Unrealized Losses		Fair Value			Gross Unrealized Losses
June 30, 2021
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	13.9		$	0.3	$	3.0		$	0.2	$	16.9		$	0.5
Other	113.2			5.3		—			—		113.2			5.3
Municipal bonds	24.0			0.3		0.7			0.1		24.7			0.4
Foreign government bonds	—			—		—			—		—			—
Corporate bonds	142.3			3.8		38.8			1.2		181.1			5.0
Other asset-backed securities	136.0			1.0		262.8			11.5		398.8			12.5
Total	$	429.4		$	10.7	$	305.3		$	13.0	$	734.7		$	23.7
Number of positions with a    gross unrealized loss	267					154					421
Fair value as a percentage of total fixed    maturity securities at fair value	6.5		%			4.7		%			11.2		%
December 31, 2020
Fixed maturity securities
U.S. Government and federally sponsored agency obligations:
Mortgage-backed securities	$	4.9		$	0.1	$	2.6		$	0.2	$	7.5		$	0.3
Other	95.9			1.0		—			—		95.9			1.0
Municipal bonds	18.1			0.5		—			—		18.1			0.5
Foreign government bonds	—			—		—			—		—			—
Corporate bonds	126.6			3.7		10.9			0.2		137.5			3.9
Other asset-backed securities	316.9			17.2		409.3			5.5		726.2			22.7
Total	$	562.4		$	22.5	$	422.8		$	5.9	$	985.2		$	28.4
Number of positions with a    gross unrealized loss	308					123					431
Fair value as a percentage of total fixed    maturity securities at fair value	8.9		%			6.7		%			15.6		%

Distribution of the company's fixed maturity portfolio by estimated expected maturity

The following table presents the distribution of the Company’s fixed maturity securities portfolio by estimated expected maturity. Estimated expected maturities differ from contractual maturities, reflecting assumptions regarding borrowers' utilization of the right to call or prepay obligations with or without call or prepayment penalties. For structured securities, estimated expected maturities consider broker-dealer survey prepayment assumptions and are verified for consistency with the interest rate and economic environments.

($ in millions)	Percent of Total Fair Value				June 30, 2021
	June 30, 2021		December 31, 2020		Fair Value		Amortized Cost, net
Estimated expected maturity:
Due in 1 year or less	3.9	%	4.0	%	$	254.9	$	247.8
Due after 1 year through 5 years	26.6	%	28.3	%	1,745.1		1,655.2
Due after 5 years through 10 years	28.4	%	28.0	%	1,861.9		1,702.2
Due after 10 years through 20 years	24.3	%	24.6	%	1,595.1		1,433.7
Due after 20 years	16.8	%	15.1	%	1,098.0		1,010.5
Total	100.0	%	100.0	%	$	6,555.0	$	6,049.4
Average option-adjusted duration, in years	6.8		6.4

Proceeds received from sales of fixed maturities and equity securities

Proceeds received from sales of fixed maturity and equity securities, each determined using the specific identification method, and gross gains and gross losses realized as a result of those sales for each period were as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fixed maturity securities
Proceeds received	$	68.3	$	196.0	$	163.8	$	294.2
Gross gains realized	1.7		5.5		3.0		10.3
Gross losses realized	(0.2)		(5.6)		(3.6)		(5.9)
Equity securities
Proceeds received	$	0.3	$	10.6	$	0.7	$	12.1
Gross gains realized	0.1		1.7		0.2		2.0
Gross losses realized	—		(1.2)		—		(1.8)

Reconciliation of net unrealized investment gains (losses) on fixed maturity securities and equity securities

The following table reconciles net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in accumulated other comprehensive income (AOCI), before the impact of DAC:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net unrealized investment gains (losses)    on fixed maturity securities, net of tax
Beginning of period	$	287.2	$	149.9	$	439.8	$	264.4
Change in net unrealized investment gains    (losses) on fixed maturity securities	116.9		174.9		(42.1)		71.2
Reclassification of net investment (gains) losses    on securities to net income	(4.7)		5.1		1.7		(5.7)
End of period	$	399.4	$	329.9	$	399.4	$	329.9

Schedule of carrying amounts of equity method limited partnership interests

The carrying amounts of equity method limited partnership interests were as follows:

($ in millions)
	June 30, 2021		December 31, 2020
Senior commercial mortgage loan funds	$	254.8	$	149.6
Hedge funds	50.7		63.2
Infrastructure debt funds	58.1		58.3
Infrastructure equity funds	57.3		52.1
Other funds(1)	164.8		125.8
Total	$	585.7	$	449.0

(1)Other funds consist primarily of limited partnership interests in real estate equity funds, private equity funds and corporate mezzanine funds.

Offsetting assets and liability

The following table presents instruments that were subject to a master netting arrangement for the Company.

($ in millions)			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts						Financial Instruments		Cash Collateral Received		Net Amount
June 30, 2021
Asset derivatives:
Free-standing derivatives	$	15.4	$	—	$	15.4	$	13.6	$	3.3	$	(1.5)
December 31, 2020
Asset derivatives:
Free-standing derivatives	$	16.8	$	—	$	16.8	$	13.7	$	2.6	$	0.5

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Summary of Company's fair value hierarchy measured at recurring basis

The following table presents the Company's fair value hierarchy for those financial assets and financial liabilities measured and carried at fair value on a recurring basis. During the six months ended June 30, 2021 and 2020, there were no transfers between Level 1 and Level 2. At June 30, 2021, Level 3 invested assets comprised 4.7% of the Company’s total investment portfolio at fair value.

($ in millions)	Carrying Amount		Fair Value		Fair Value Measurements at Reporting Date Using
					Level 1		Level 2		Level 3
June 30, 2021
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally    sponsored agency obligations:
Mortgage-backed securities	$	678.3	$	678.3	$	—	$	678.3	$	—
Other, including U.S. Treasury securities	456.2		456.2		28.0		428.2		—
Municipal bonds	1,799.1		1,799.1		—		1,740.5		58.6
Foreign government bonds	44.4		44.4		—		44.4		—
Corporate bonds	2,408.8		2,408.8		14.6		2,243.7		150.5
Other asset-backed securities	1,168.2		1,168.2		—		1,052.7		115.5
Total fixed maturity securities	6,555.0		6,555.0		42.6		6,187.8		324.6
Equity securities	145.7		145.7		40.0		105.4		0.3
Short-term investments	93.5		93.5		90.4		3.1		—
Other investments	46.8		46.8		—		46.8		—
Totals	$	6,841.0	$	6,841.0	$	173.0	$	6,343.1	$	324.9
Separate Account (variable annuity) assets(1)	$	3,256.7	$	3,256.7	$	3,256.7	$	—	$	—
Financial Liabilities
Investment contract and policy reserves,  embedded derivatives	$	2.8	$	2.8	$	—	$	2.8	$	—
Other policyholder funds, embedded derivatives	$	108.9	$	108.9	$	—	$	—	$	108.9
December 31, 2020
Financial Assets
Investments
Fixed maturity securities
U.S. Government and federally    sponsored agency obligations:
Mortgage-backed securities	$	684.8	$	684.8	$	—	$	673.7	$	11.1
Other, including U.S. Treasury securities	433.2		433.2		18.4		414.8		—
Municipal bonds	1,827.5		1,827.5		—		1,767.9		59.6
Foreign government bonds	45.1		45.1		—		45.1		—
Corporate bonds	2,122.9		2,122.9		14.9		1,952.2		155.8
Other asset-backed securities	1,231.8		1,231.8		—		1,103.5		128.3
Total fixed maturity securities	6,345.3		6,345.3		33.3		5,957.2		354.8
Equity securities	121.6		121.6		39.2		82.1		0.3
Short-term investments	141.8		141.8		137.7		4.1		—
Other investments	36.3		36.3		—		36.3		—
Totals	$	6,645.0	$	6,645.0	$	210.2	$	6,079.7	$	355.1
Separate Account (variable annuity) assets(1)	$	2,891.4	$	2,891.4	$	2,891.4	$	—	$	—
Financial Liabilities
Investment contract and policy reserves,  embedded derivatives	$	2.5	$	2.5	$	—	$	2.5	$	—
Other policyholder funds, embedded derivatives	$	104.5	$	104.5	$	—	$	—	$	104.5

(1)    Separate Account (variable annuity) liabilities are equal to the estimated fair value of the Separate Account (variable annuity) assets.

Schedule of reconciliations for all Level 3 financial assets and financial liabilities measured at fair value on a recurring basis

The reconciliation for all financial assets and financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows:

($ in millions)	Financial Assets												Financial Liabilities(1)
	Municipal Bonds		Corporate Bonds		Mortgage-Backed and Other Asset- Backed Securities(2)		Total Fixed Maturity Securities		Equity Securities		Total
Beginning balance, April 1, 2021	$	58.6	$	149.1	$	132.2	$	339.9	$	0.3	$	340.2	$	107.6
Transfers into Level 3(3)	—		28.5		3.1		31.6		—		31.6		—
Transfers out of Level 3(3)	—		(29.4)		(13.3)		(42.7)		—		(42.7)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		3.2
Net unrealized investment gains  (losses) included in OCI	0.3		3.2		1.3		4.8		—		4.8		—
Purchases	—		—		—		—		—		—		—
Issuances	—		—		—		—		—		—		1.2
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.3)		(0.9)		(7.8)		(9.0)		—		(9.0)		(3.1)
Ending balance, June 30, 2021	$	58.6	$	150.5	$	115.5	$	324.6	$	0.3	$	324.9	$	108.9
Beginning balance, January 1, 2021	$	59.6	$	155.8	$	139.4	$	354.8	$	0.3	$	355.1	$	104.5
Transfers into Level 3(3)	—		52.6		6.2		58.8		—		58.8		—
Transfers out of Level 3(3)	—		(56.7)		(19.2)		(75.9)		—		(75.9)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		7.5
Net unrealized investment gains  (losses) included in OCI	(0.6)		1.2		1.0		1.6		—		1.6		—
Purchases	—		—		—		—		—		—		—
Issuances	—		—		—		—		—		—		1.9
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.4)		(2.4)		(11.9)		(14.7)		—		(14.7)		(5.0)
Ending balance, June 30, 2021	$	58.6	$	150.5	$	115.5	$	324.6	$	0.3	$	324.9	$	108.9

(1)Represents embedded derivatives, all related to the Company's fixed indexed annuity products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets.

(2)Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities.

(3)Transfers into and out of Level 3 during the three and six months ended June 30, 2021 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

($ in millions)	Financial Assets												Financial Liabilities(1)
	Municipal Bonds		Corporate Bonds		Mortgage-Backed and Other Asset- Backed Securities(2)		Total Fixed Maturity Securities		Equity Securities		Total
Beginning balance, April 1, 2020	$	104.9	$	111.7	$	140.5	$	357.1	$	0.1	$	357.2	$	87.5
Transfers into Level 3(3)	10.7		14.0		64.2		88.9		—		88.9		—
Transfers out of Level 3(3)	(45.9)		(4.2)		(3.4)		(53.5)		—		(53.5)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		6.0
Net unrealized investment gains  (losses) included in OCI	3.8		5.3		3.3		12.4		—		12.4		—
Purchases	—		—		—		—		—		—		—
Issuances	—		—		—		—		—		—		2.5
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.3)		(0.5)		(4.5)		(5.3)		—		(5.3)		(2.4)
Ending balance, June 30, 2020	$	73.2	$	126.3	$	200.1	$	399.6	$	0.1	$	399.7	$	93.6
Beginning balance, January 1, 2020	$	44.3	$	104.0	$	146.8	$	295.1	$	0.1	$	295.2	$	93.7
Transfers into Level 3(3)	74.5		32.8		86.7		194.0		—		194.0		—
Transfers out of Level 3(3)	(45.9)		(14.2)		(6.4)		(66.5)		—		(66.5)		—
Total gains or losses
Net investment gains (losses)  included in net income related  to financial assets	—		—		—		—		—		—		—
Net investment (gains) losses  included in net income related  to financial liabilities	—		—		—		—		—		—		0.9
Net unrealized investment gains  (losses) included in OCI	0.8		(0.2)		(21.1)		(20.5)		—		(20.5)		—
Purchases	—		6.9		1.9		8.8		—		8.8		—
Issuances	—		—		—		—		—		—		3.9
Sales	—		—		—		—		—		—		—
Settlements	—		—		—		—		—		—		—
Paydowns, maturities and distributions	(0.5)		(3.0)		(7.8)		(11.3)		—		(11.3)		(4.9)
Ending balance, June 30, 2020	$	73.2	$	126.3	$	200.1	$	399.6	$	0.1	$	399.7	$	93.6

(1)    Represents embedded derivatives, all related to the Company's fixed indexed annuity products, reported in Other policyholder funds in the Company's Consolidated Balance Sheets.

(2)    Includes U.S. Government and federally sponsored agency obligations for mortgage-backed securities and other asset-backed securities.

(3)    Transfers into and out of Level 3 during the three and six months ended June 30, 2020 were attributable to changes in the availability of observable market information for individual fixed maturity securities. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

Quantitative Information about Level 3 Fair Value Measurements

The following table provides quantitative information about the significant unobservable inputs for recurring fair value measurements categorized within Level 3.

($ in millions)
Financial Assets	Fair Value at June 30, 2021		Valuation Technique(s)	Unobservable Inputs	Range (Weighted Average) and Single Point Best Estimate(1)
Municipal bonds	$	58.6	discounted cash flow	I spread(2)	307 - 391 bps
Corporate bonds	150.5		discounted cash flow	N spread(3)	272 - 553 bps
			market comparable	option adjusted spread	12.54%
Other asset-backed securities	115.5		vendor price	haircut	3.00% - 5.00%
			discounted cash flow	constant prepayment rate	20.00%
			discounted cash flow	T spread(4)	235 - 800 bps
			discounted cash flow	PDI interest margin(5)	7.13%
			discounted cash flow	SBL interest margin(6)	4.50%
Government mortgage-backed securities	—		vendor price	haircut	3.00% - 5.00%
Equity securities	0.3		Black Scholes	equity value	low - 31.00%; high - 41.00%

($ in millions)
Financial Liabilities	Fair Value at June 30, 2021		Valuation Technique(s)	Unobservable Inputs	Range (Weighted Average) and Single Point Best Estimate(1)
Derivatives embedded in fixed indexed annuity products	$	108.9	discounted cash flow	lapse rate	5.30%
				mortality multiplier(7)	63.00%
				option budget	0.90% - 2.50%
				non-performance adjustment(8)	5.00%

(1)    When a range of unobservable inputs is not readily available, the Company uses a single point best estimate.

(2)    "I spread" is the interpolated weighted average life point on the "on the run" (OTR) point of the curve.

(3)    "N spread" is the interpolated weighted average life point on the swap curve.

(4)    "T spread" is a specific point on the OTR curve.

(5)    "PDI" stands for private debt investment.

(6)    "SBL" stands for broadly syndicated loans.

(7)    Mortality multiplier is applied to the Annuity 2000 table.

(8)    Determined as a percentage of a risk-free rate.

Summary of fair value assets and liabilities measured on nonrecurring basis

The following table presents the carrying amount, fair value and fair value hierarchy of these financial assets and financial liabilities.

($ in millions)	Carrying Amount		Fair Value		Fair Value Measurements at Reporting Date Using
					Level 1		Level 2		Level 3
June 30, 2021
Financial Assets
Other investments	$	160.7	$	164.3	$	—	$	—	$	164.3
Deposit asset on reinsurance	2,456.8		2,948.5		—		—		2,948.5
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	4,911.3		5,031.5		—		—		5,031.5
Investment contract and policy reserves, account values on life contracts	101.4		110.9		—		—		110.9
Other policyholder funds	914.2		914.2		—		857.7		56.5
Short-term debt	135.0		135.0		—		—		135.0
Long-term debt	278.5		313.6		—		313.6		—
December 31, 2020
Financial Assets
Other investments	$	168.3	$	172.1	$	—	$	—	$	172.1
Deposit asset on reinsurance	2,420.9		3,030.6		—		—		3,030.6
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	4,847.6		4,963.3		—		—		4,963.3
Investment contract and policy reserves, account values on life contracts	98.7		108.4		—		—		108.4
Other policyholder funds	646.8		646.8		—		590.7		56.1
Short-term debt	135.0		135.0		—		—		135.0
Long-term debt	302.3		331.1		—		331.1		—

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

The carrying amount of goodwill by reporting unit as of June 30, 2021 was as follows:

($ in millions)	June 30, 2021
Property and Casualty	$	9.5
Supplemental	19.6
Retirement	4.5
Life	9.9
Total	$	43.5

Summary of finite-lived intangible assets

As of June 30, 2021 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows:

($ in millions)	Weighted Average
	Useful Life (in Years)
At inception:
Value of business acquired	30	$	94.4
Value of distribution acquired	17	54.0
Value of agency relationships	14	17.0
Value of customer relationships	10	9.1
Total	23	174.5
Accumulated amortization and impairments:
Value of business acquired		(14.3)
Value of distribution acquired		(10.2)
Value of agency relationships		(5.2)
Value of customer relationships		(3.7)
Total		(33.4)
Net intangible assets subject to amortization:		$	141.1

Future amortization expense

Estimated future amortization of the Company's definite-lived intangible assets were as follows:

($ in millions)
Year Ending December 31,
2021 (excluding the six months ended June 30, 2021)	$	6.4
2022	12.1
2023	11.2
2024	10.5
2025	9.8
Thereafter	91.1
Total	$	141.1

Summary of indefinite-lived intangible assets

Indefinite-lived intangible assets (not subject to amortization) as of June 30, 2021 were as follows:

($ in millions)
Trade names	$	7.9
State licenses	2.9
Total	$	10.8

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Unpaid Claims and Claim Expenses (Tables)

6 Months Ended

Jun. 30, 2021

Insurance Loss Reserves [Abstract]

Reconciliation of property and casualty unpaid claims and claim expense

The following table is a summary reconciliation of the beginning and ending Property and Casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both a gross and net (after reinsurance) basis. The total net Property and Casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations. The end of the period gross reserve (before reinsurance) balances and the reinsurance recoverable balances are reflected on a gross basis in the Consolidated Balance Sheets.

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Property and Casualty
Beginning gross reserves(1)	$	374.1	$	382.2	$	372.2	$	387.0
Less: reinsurance recoverables	112.5		119.0		112.9		120.5
Net reserves, beginning of period(2)	261.6		263.2		259.3		266.5
Incurred claims and claim expenses:
Claims occurring in the current period	118.1		109.1		212.9		214.6
Decrease in estimated reserves for claims occurring in prior periods(3)	(4.2)		(1.0)		(4.2)		(2.0)
Total claims and claim expenses incurred(4)	113.9		108.1		208.7		212.6
Claims and claim expense payments for claims occurring during:
Current period	79.1		61.4		113.5		104.9
Prior periods	36.9		37.5		95.0		101.8
Total claims and claim expense payments	116.0		98.9		208.5		206.7
Net reserves, end of period(2)	259.5		272.4		259.5		272.4
Plus: reinsurance recoverables	108.9		116.1		108.9		116.1
Ending gross reserves(1)	$	368.4	$	388.5	$	368.4	$	388.5

(1)Unpaid claims and claim expenses as reported in the Consolidated Balance Sheets also include reserves for Supplemental, Retirement and Life of $65.2 million and $56.1 million as of June 30, 2021 and 2020, respectively, in addition to Property and Casualty reserves.

(2)Reserves net of anticipated reinsurance recoverables.

(3)Shows the amounts by which the Company decreased its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs.

(4)Benefits, claims and settlement expenses as reported in the Consolidated Statements of Operations also include amounts for Supplemental, Retirement and Life of $33.2 million and $72.7 million for the three and six months ended June 30, 2021, respectively, in addition to Property and Casualty amounts. Benefits, claims and settlement expenses for Supplemental, Retirement and Life of $34.9 million and $69.1 million for the three and six months ended June 30, 2020, respectively.

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Reinsurance (Tables)

6 Months Ended

Jun. 30, 2021

Insurance [Abstract]

Effects of reinsurance on premiums and benefits

The effects of reinsurance on premiums written and contract deposits; premiums and contract charges earned; and benefits, claims and settlement expenses were as follows:

($ in millions)	Gross Amount		Ceded to Other Companies(1)		Assumed from Other Companies		Net Amount
Three months ended June 30, 2021
Premiums written and contract deposits(2)	$	351.2	$	5.6	$	2.5	$	348.1
Premiums and contract charges earned	231.5		8.1		2.4		225.8
Benefits, claims and settlement expenses	144.6		(1.0)		1.5		147.1
Three months ended June 30, 2020
Premiums written and contract deposits(2)	$	332.4	$	6.4	$	3.1	$	329.1
Premiums and contract charges earned	230.6		8.3		3.1		225.4
Benefits, claims and settlement expenses	143.3		2.4		2.1		143.0
Six months ended June 30, 2021
Premiums written and contract deposits(2)	$	671.8	$	11.5	$	4.0	$	664.3
Premiums and contract charges earned	465.7		16.5		4.2		453.4
Benefits, claims and settlement expenses	280.2		1.5		2.7		281.4
Six months ended June 30, 2020
Premiums written and contract deposits(2)	$	666.1	$	12.7	$	4.5	$	657.9
Premiums and contract charges earned	473.8		16.7		4.6		461.7
Benefits, claims and settlement expenses	282.8		4.3		3.2		281.7

(1)    Excludes the annuity reinsurance transaction accounted for using the deposit method that is discussed in Note 4.

(2)    This measure is not based on accounting principles generally accepted in the United States of America (non-GAAP). An explanation of this non-GAAP measure is contained in the Glossary of Selected Terms included as Exhibit 99.1 in the Company's reports filed with the SEC.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Summarized financial information for these segments

Summarized financial information for these segments is as follows:

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Premiums and contract charges earned
Property and Casualty	$	155.0	$	156.2	$	310.8	$	322.7
Supplemental	31.6		33.3		63.3		66.3
Retirement	9.2		6.7		17.8		14.1
Life	30.0		29.2		61.5		58.6
Total	$	225.8	$	225.4	$	453.4	$	461.7
Net investment income
Property and Casualty	$	21.7	$	6.3	$	32.5	$	16.6
Supplemental	6.3		4.0		11.6		7.5
Retirement	62.0		55.1		122.4		108.6
Life	19.8		15.6		39.4		31.2
Corporate and Other	(0.1)		—		(0.1)		(0.1)
Intersegment eliminations	(0.5)		(0.6)		(1.1)		(1.1)
Total	$	109.2	$	80.4	$	204.7	$	162.7
Net income (loss)
Property and Casualty	$	19.3	$	11.3	$	47.2	$	37.9
Supplemental	12.0		9.5		23.4		20.0
Retirement	11.5		9.7		22.1		8.8
Life	5.0		1.9		5.7		2.5
Corporate and Other	(1.1)		(1.9)		(12.4)		(20.2)
Total	$	46.7	$	30.5	$	86.0	$	49.0

($ in millions)	June 30, 2021		December 31, 2020
Assets
Property and Casualty	$	1,313.2	$	1,324.9
Supplemental	855.0		811.5
Retirement	9,800.6		9,198.7
Life	2,142.9		2,044.5
Corporate and Other	158.9		182.3
Intersegment eliminations	(80.5)		(90.1)
Total	$	14,190.1	$	13,471.8

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Schedule of accumulated other comprehensive income (loss)

The following table reconciles these components.

($ in millions)	Net Unrealized Investment  Gains (Losses)  on Securities(1)		Net Funded Status of Benefit Plans(1)		Total(1)
Beginning balance, April 1, 2021	$	243.6	$	(11.2)	$	232.4
Other comprehensive income (loss) before reclassifications	93.3		—		93.3
Amounts reclassified from AOCI(2)	(4.7)		—		(4.7)
Net current period other comprehensive income (loss)	88.6		—		88.6
Ending balance, June 30, 2021	$	332.2	$	(11.2)	$	321.0
Beginning balance, April 1, 2020	$	136.6	$	(10.7)	$	125.9
Other comprehensive income (loss) before reclassifications	147.5		—		147.5
Amounts reclassified from AOCI(3)	(5.0)		—		(5.0)
Net current period other comprehensive income (loss)	142.5		—		142.5
Ending balance, June 30, 2020	$	279.1	$	(10.7)	$	268.4
Beginning balance, January 1, 2021	$	366.3	$	(11.2)	$	355.1
Other comprehensive income (loss) before reclassifications	(35.8)		—		(35.8)
Amounts reclassified from AOCI(2)	1.7		—		1.7
Net current period other comprehensive income (loss)	(34.1)		—		(34.1)
Ending balance, June 30, 2021	$	332.2	$	(11.2)	$	321.0
Beginning balance, January 1, 2020	$	230.4	$	(10.7)	$	219.7
Other comprehensive income (loss) before reclassifications	43.0		—		43.0
Amounts reclassified from AOCI(3)	5.7		—		5.7
Net current period other comprehensive income (loss)	48.7		—		48.7
Ending balance, June 30, 2020	$	279.1	$	(10.7)	$	268.4

(1)All amounts are net of tax.

(2)The pretax amounts reclassified from AOCI, $5.9 million and $(2.2) million, are included in Net investment gains (losses) and the related income tax expenses, $1.2 million and $(0.5) million, are included in income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2021, respectively.

(3)    The pretax amounts reclassified from AOCI, $6.4 million and $(7.2) million, are included in Net investment gains (losses) and the related income tax expenses, $1.4 million and $(1.5) million, are included in Income tax expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2020, respectively.

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Supplemental Consolidated Cash and Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2021

Supplemental Cash Flow Elements [Abstract]

Summary of cash and restricted cash

($ in millions)
	June 30, 2021		December 31, 2020
Cash	$	28.3	$	21.8
Restricted cash	1.1		0.5
Total cash and restricted cash reported in the Consolidated Balance Sheets	$	29.4	$	22.3

($ in millions)	Six Months Ended June 30,
	2021		2020
Cash paid (recovered) during the three months for:
Interest	$	6.8	$	8.2
Income taxes	13.4		(0.6)

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Basis of Presentation and Significant Accounting Policies (Details) - Subsequent Event - USD ($)	Jul. 14, 2021	Jul. 12, 2021	Jul. 11, 2021
Madison National
Debt Instrument [Line Items]
Consideration to acquire business	$ 172,500,000
Business acquisition, contingent consideration, liability (up to)	$ 12,500,000
Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 325,000,000.0	$ 225,000,000.0

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Investments - Net Investment Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Net Investment Income [Line Items]
Investment expenses	$ (2.5)	$ (2.9)	$ (4.6)	$ (5.1)
Total net investment income	109.2	80.4	204.7	162.7
Investment Portfolio
Net Investment Income [Line Items]
Total net investment income	84.1	56.5	155.2	115.1
Deposit asset on reinsurance
Net Investment Income [Line Items]
Total net investment income	25.1	23.9	49.5	47.6
Fixed maturity securities
Net Investment Income [Line Items]
Net investment income - investment portfolio	59.4	58.9	117.4	118.3
Equity securities
Net Investment Income [Line Items]
Net investment income - investment portfolio	1.3	1.2	2.4	2.4
Limited partnership interests
Net Investment Income [Line Items]
Net investment income - investment portfolio	23.0	(3.5)	34.3	(6.2)
Short-term and other investments
Net Investment Income [Line Items]
Net investment income - investment portfolio	$ 2.9	$ 2.8	$ 5.7	$ 5.7

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Investments - Realized Investment Gains (Losses) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Gain (Loss) on Securities [Line Items]
Net investment gains (losses)	$ 4.9	$ 3.2	$ (4.1)	$ (15.3)
Fixed maturity securities
Gain (Loss) on Securities [Line Items]
Net investment gains (losses)	1.5	(0.7)	(3.9)	0.4
Equity securities
Gain (Loss) on Securities [Line Items]
Net investment gains (losses)	4.4	7.1	1.7	(7.6)
Short-term investments and other
Gain (Loss) on Securities [Line Items]
Net investment gains (losses)	$ (1.0)	$ (3.2)	$ (1.9)	$ (8.1)

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Investments - Net Investment Gains (Losses) By Transaction Type (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Investments, Debt and Equity Securities [Abstract]
Credit loss impairments	$ 0.0	$ 0.0	$ (1.1)	$ 0.0
Intent-to-sell impairments	0.0	(0.5)	(2.1)	(4.2)
Total impairments on investments recognized in net income	0.0	(0.5)	(3.2)	(4.2)
Sales and other, net	1.6	0.4	(0.5)	4.9
Change in fair value - equity securities	4.3	6.6	1.5	(7.9)
Change in fair value and losses realized on settlements - derivatives	(1.0)	(3.3)	(1.9)	(8.1)
Net investment gains (losses)	$ 4.9	$ 3.2	(4.1)	$ (15.3)
Available-for-sale allowance for credit loss not previously recorded			$ 1.1

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Investments - Summary of Fair Value and Amortized Costs (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Unrealized gains and losses on fixed maturities and equity securities
Amortized Cost, net	$ 6,049.4	$ 5,788.6
Fair Value	6,555.0	6,345.3
FNMA
Unrealized gains and losses on fixed maturities and equity securities
Fair Value	380.3	387.1
FHLMC
Unrealized gains and losses on fixed maturities and equity securities
Fair Value	331.9	344.3
GNMA
Unrealized gains and losses on fixed maturities and equity securities
Fair Value	123.8	132.3
Total Fixed Maturity Securities
Unrealized gains and losses on fixed maturities and equity securities
Amortized Cost, net	6,049.4	5,788.6
Gross Unrealized Gains	529.3	585.1
Gross Unrealized Losses	23.7	28.4
Fair Value	6,555.0	6,345.3
Mortgage-backed securities
Unrealized gains and losses on fixed maturities and equity securities
Amortized Cost, net	610.8	605.5
Gross Unrealized Gains	68.0	79.6
Gross Unrealized Losses	0.5	0.3
Fair Value	678.3	684.8
Other, including U.S. Treasury securities
Unrealized gains and losses on fixed maturities and equity securities
Amortized Cost, net	430.5	395.0
Gross Unrealized Gains	31.0	39.2
Gross Unrealized Losses	5.3	1.0
Fair Value	456.2	433.2
Municipal bonds
Unrealized gains and losses on fixed maturities and equity securities
Amortized Cost, net	1,598.6	1,612.3
Gross Unrealized Gains	200.9	215.7
Gross Unrealized Losses	0.4	0.5
Fair Value	1,799.1	1,827.5
Foreign government bonds
Unrealized gains and losses on fixed maturities and equity securities
Amortized Cost, net	40.2	40.2
Gross Unrealized Gains	4.2	4.9
Gross Unrealized Losses	0.0	0.0
Fair Value	44.4	45.1
Corporate bonds
Unrealized gains and losses on fixed maturities and equity securities
Amortized Cost, net	2,211.3	1,905.2
Gross Unrealized Gains	202.5	221.6
Gross Unrealized Losses	5.0	3.9
Fair Value	2,408.8	2,122.9
Other asset-backed securities
Unrealized gains and losses on fixed maturities and equity securities
Amortized Cost, net	1,158.0	1,230.4
Gross Unrealized Gains	22.7	24.1
Gross Unrealized Losses	12.5	22.7
Fair Value	$ 1,168.2	$ 1,231.8

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Investments - Fair Value and Gross Unrealized Losses (Details) $ in Millions	Jun. 30, 2021 USD ($) security	Dec. 31, 2020 USD ($) security
Fixed maturity securities, Fair Value
Number of positions with a gross unrealized loss, 12 Months or Less | security	267	308
Number of position with a gross unrealized loss, more than 12 months | security	154	123
Number of position with a gross unrealized loss, Total | security	421	431
Fair value as a percentage of total fixed maturities and equity securities fair value, 12 Months or Less	6.50%	8.90%
Fair value as a percentage of total fixed maturities and equity securities fair value, more than 12 months	4.70%	6.70%
Fair value as a percentage of total fixed maturities and equity securities fair value, Total	11.20%	15.60%
Mortgage-backed securities
Fixed maturity securities, Fair Value
Fixed maturity securities, Fair Value, 12 Months or Less	$ 13.9	$ 4.9
Fixed maturity securities, Fair Value, More than 12 Months	3.0	2.6
Fixed maturity securities, Fair Value, Total	16.9	7.5
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less	0.3	0.1
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months	0.2	0.2
Fixed maturity securities, Gross Unrealized Losses, Total	0.5	0.3
Other
Fixed maturity securities, Fair Value
Fixed maturity securities, Fair Value, 12 Months or Less	113.2	95.9
Fixed maturity securities, Fair Value, More than 12 Months	0.0	0.0
Fixed maturity securities, Fair Value, Total	113.2	95.9
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less	5.3	1.0
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months	0.0	0.0
Fixed maturity securities, Gross Unrealized Losses, Total	5.3	1.0
Municipal bonds
Fixed maturity securities, Fair Value
Fixed maturity securities, Fair Value, 12 Months or Less	24.0	18.1
Fixed maturity securities, Fair Value, More than 12 Months	0.7	0.0
Fixed maturity securities, Fair Value, Total	24.7	18.1
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less	0.3	0.5
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months	0.1	0.0
Fixed maturity securities, Gross Unrealized Losses, Total	0.4	0.5
Foreign government bonds
Fixed maturity securities, Fair Value
Fixed maturity securities, Fair Value, 12 Months or Less	0.0	0.0
Fixed maturity securities, Fair Value, More than 12 Months	0.0	0.0
Fixed maturity securities, Fair Value, Total	0.0	0.0
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less	0.0	0.0
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months	0.0	0.0
Fixed maturity securities, Gross Unrealized Losses, Total	0.0	0.0
Corporate bonds
Fixed maturity securities, Fair Value
Fixed maturity securities, Fair Value, 12 Months or Less	142.3	126.6
Fixed maturity securities, Fair Value, More than 12 Months	38.8	10.9
Fixed maturity securities, Fair Value, Total	181.1	137.5
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less	3.8	3.7
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months	1.2	0.2
Fixed maturity securities, Gross Unrealized Losses, Total	5.0	3.9
Other asset-backed securities
Fixed maturity securities, Fair Value
Fixed maturity securities, Fair Value, 12 Months or Less	136.0	316.9
Fixed maturity securities, Fair Value, More than 12 Months	262.8	409.3
Fixed maturity securities, Fair Value, Total	398.8	726.2
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less	1.0	17.2
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months	11.5	5.5
Fixed maturity securities, Gross Unrealized Losses, Total	12.5	22.7
Total Fixed Maturity Securities
Fixed maturity securities, Fair Value
Fixed maturity securities, Fair Value, 12 Months or Less	429.4	562.4
Fixed maturity securities, Fair Value, More than 12 Months	305.3	422.8
Fixed maturity securities, Fair Value, Total	734.7	985.2
Fixed maturity securities, Gross Unrealized Losses, 12 Months or Less	10.7	22.5
Fixed maturity securities, Gross Unrealized Losses, More than 12 Months	13.0	5.9
Fixed maturity securities, Gross Unrealized Losses, Total	$ 23.7	$ 28.4

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Investments - Distribution of Fixed Maturity Securities by Expected Maturity (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Percent of Total Fair Value
Due in 1 year or less	3.90%	4.00%
Due after 1 year through 5 years	26.60%	28.30%
Due after 5 years through 10 years	28.40%	28.00%
Due after 10 years through 20 years	24.30%	24.60%
Due after 20 years	16.80%	15.10%
Total	100.00%	100.00%
Fair Value
Due in 1 year or less	$ 254.9
Due after 1 year through 5 years	1,745.1
Due after 5 years through 10 years	1,861.9
Due after 10 years through 20 years	1,595.1
Due after 20 years	1,098.0
Total	6,555.0	$ 6,345.3
Amortized Cost, net
Due in 1 year or less	247.8
Due after 1 year through 5 years	1,655.2
Due after 5 years through 10 years	1,702.2
Due after 10 years through 20 years	1,433.7
Due after 20 years	1,010.5
Amortized Cost, net	$ 6,049.4	$ 5,788.6
Average option-adjusted duration, in years	6 years 9 months 18 days	6 years 4 months 24 days

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Investments - Summary of Proceeds and Gains (Losses) Realized on Securities (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Fixed maturity securities
Proceeds received	$ 68.3	$ 196.0	$ 163.8	$ 294.2
Gross gains realized	1.7	5.5	3.0	10.3
Gross losses realized	(0.2)	(5.6)	(3.6)	(5.9)
Equity Securities, FV-NI, Realized Gain (Loss) [Abstract]
Proceeds received	0.3	10.6	0.7	12.1
Gross gains realized	0.1	1.7	0.2	2.0
Gross losses realized	$ 0.0	$ (1.2)	$ 0.0	$ (1.8)

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Investments - Reconciliation of Net Unrealized Investment Gains (Losses) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			$ 1,790.1
Ending balance	$ 1,816.6	$ 1,639.8	1,816.6	$ 1,639.8
Net unrealized investment gains (losses) on securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	243.6	136.6	366.3	230.4
Ending balance	332.2	279.1	332.2	279.1
Net unrealized investment gains (losses) on securities | Fixed maturity securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	287.2	149.9	439.8	264.4
Change in net unrealized investment gains (losses) on fixed maturity securities	116.9	174.9	(42.1)	71.2
Reclassification of net investment (gains) losses on securities to net income	(4.7)	5.1	1.7	(5.7)
Ending balance	$ 399.4	$ 329.9	$ 399.4	$ 329.9

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Investments - Carrying Amount of Equity Method Limited Partnership Interests (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Schedule of Equity Method Investments [Line Items]
Limited partnership interests	$ 585.7	$ 449.0
Senior commercial mortgage loan funds
Schedule of Equity Method Investments [Line Items]
Limited partnership interests	254.8	149.6
Hedge funds
Schedule of Equity Method Investments [Line Items]
Limited partnership interests	50.7	63.2
Infrastructure debt funds
Schedule of Equity Method Investments [Line Items]
Limited partnership interests	58.1	58.3
Infrastructure equity funds
Schedule of Equity Method Investments [Line Items]
Limited partnership interests	57.3	52.1
Other
Schedule of Equity Method Investments [Line Items]
Limited partnership interests	$ 164.8	$ 125.8

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Investments - Offsetting of Assets and Liabilities (Details) - Free-standing derivatives - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Asset derivatives:
Gross Amounts	$ 15.4	$ 16.8
Gross Amounts Offset in the Consolidated Balance Sheets	0.0	0.0
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheets	15.4	16.8
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments	13.6	13.7
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received	3.3	2.6
Net Amount	$ (1.5)	$ 0.5

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Investments - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Investment Holdings [Line Items]
Investment grade rating	85.60%
Debt securities, available-for-sale	$ 6,555.0	$ 6,345.3
FHLB funding agreements	887.5	644.5
FHLB of Chicago
Investment Holdings [Line Items]
Debt securities, available-for-sale	974.8	707.3
Governmental Agencies as Required by Law in Various States
Investment Holdings [Line Items]
Debt securities, available-for-sale	$ 26.6	$ 26.9

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Fair Value of Financial Instruments - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Percentage of level 3 invested assets in total investment portfolio	4.70%		4.70%
Net investment gains (losses) included in net income related to financial assets	$ 0	$ 0	$ 0	$ 0
Net investment (gains) losses included in net income related to financial liabilities	$ 3,200,000	$ 6,000,000.0	7,500,000	900,000
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net investment gains (losses) included in net income related to financial assets			$ 0	$ 0

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Fair Value of Financial Instruments - Financial Instruments Measured and Carried at Fair Value (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Financial Assets
Debt securities, available-for-sale	$ 6,555.0	$ 6,345.3
Equity securities	145.7	121.6
Mortgage-backed securities
Financial Assets
Debt securities, available-for-sale	678.3	684.8
Other, including U.S. Treasury securities
Financial Assets
Debt securities, available-for-sale	456.2	433.2
Municipal bonds
Financial Assets
Debt securities, available-for-sale	1,799.1	1,827.5
Foreign government bonds
Financial Assets
Debt securities, available-for-sale	44.4	45.1
Corporate bonds
Financial Assets
Debt securities, available-for-sale	2,408.8	2,122.9
Other asset-backed securities
Financial Assets
Debt securities, available-for-sale	1,168.2	1,231.8
Carrying Amount
Financial Assets
Equity securities	145.7	121.6
Short-term investments	93.5	141.8
Other investments	46.8	36.3
Totals	6,841.0	6,645.0
Separate Account (variable annuity) assets	3,256.7	2,891.4
Financial Liabilities
Investment contract and policy reserves, embedded derivatives	2.8	2.5
Other policyholder funds, embedded derivatives	108.9	104.5
Carrying Amount | Recurring
Financial Assets
Debt securities, available-for-sale	6,555.0	6,345.3
Carrying Amount | Mortgage-backed securities
Financial Assets
Debt securities, available-for-sale	678.3	684.8
Carrying Amount | Other, including U.S. Treasury securities
Financial Assets
Debt securities, available-for-sale	456.2	433.2
Carrying Amount | Municipal bonds
Financial Assets
Debt securities, available-for-sale	1,799.1	1,827.5
Carrying Amount | Foreign government bonds
Financial Assets
Debt securities, available-for-sale	44.4	45.1
Carrying Amount | Corporate bonds
Financial Assets
Debt securities, available-for-sale	2,408.8	2,122.9
Carrying Amount | Other asset-backed securities
Financial Assets
Debt securities, available-for-sale	1,168.2	1,231.8
Fair Value
Financial Assets
Equity securities	145.7	121.6
Short-term investments	93.5	141.8
Other investments	46.8	36.3
Totals	6,841.0	6,645.0
Separate Account (variable annuity) assets	3,256.7	2,891.4
Financial Liabilities
Investment contract and policy reserves, embedded derivatives	2.8	2.5
Other policyholder funds, embedded derivatives	108.9	104.5
Fair Value | Recurring
Financial Assets
Debt securities, available-for-sale	6,555.0	6,345.3
Fair Value | Mortgage-backed securities
Financial Assets
Debt securities, available-for-sale	678.3	684.8
Fair Value | Other, including U.S. Treasury securities
Financial Assets
Debt securities, available-for-sale	456.2	433.2
Fair Value | Municipal bonds
Financial Assets
Debt securities, available-for-sale	1,799.1	1,827.5
Fair Value | Foreign government bonds
Financial Assets
Debt securities, available-for-sale	44.4	45.1
Fair Value | Corporate bonds
Financial Assets
Debt securities, available-for-sale	2,408.8	2,122.9
Fair Value | Other asset-backed securities
Financial Assets
Debt securities, available-for-sale	1,168.2	1,231.8
Fair Value | Level 1
Financial Assets
Equity securities	40.0	39.2
Short-term investments	90.4	137.7
Other investments	0.0	0.0
Totals	173.0	210.2
Separate Account (variable annuity) assets	3,256.7	2,891.4
Financial Liabilities
Investment contract and policy reserves, embedded derivatives	0.0	0.0
Other policyholder funds, embedded derivatives	0.0	0.0
Fair Value | Level 1 | Recurring
Financial Assets
Debt securities, available-for-sale	42.6	33.3
Fair Value | Level 1 | Mortgage-backed securities
Financial Assets
Debt securities, available-for-sale	0.0	0.0
Fair Value | Level 1 | Other, including U.S. Treasury securities
Financial Assets
Debt securities, available-for-sale	28.0	18.4
Fair Value | Level 1 | Municipal bonds
Financial Assets
Debt securities, available-for-sale	0.0	0.0
Fair Value | Level 1 | Foreign government bonds
Financial Assets
Debt securities, available-for-sale	0.0	0.0
Fair Value | Level 1 | Corporate bonds
Financial Assets
Debt securities, available-for-sale	14.6	14.9
Fair Value | Level 1 | Other asset-backed securities
Financial Assets
Debt securities, available-for-sale	0.0	0.0
Fair Value | Level 2
Financial Assets
Equity securities	105.4	82.1
Short-term investments	3.1	4.1
Other investments	46.8	36.3
Totals	6,343.1	6,079.7
Separate Account (variable annuity) assets	0.0	0.0
Financial Liabilities
Investment contract and policy reserves, embedded derivatives	2.8	2.5
Other policyholder funds, embedded derivatives	0.0	0.0
Fair Value | Level 2 | Recurring
Financial Assets
Debt securities, available-for-sale	6,187.8	5,957.2
Fair Value | Level 2 | Mortgage-backed securities
Financial Assets
Debt securities, available-for-sale	678.3	673.7
Fair Value | Level 2 | Other, including U.S. Treasury securities
Financial Assets
Debt securities, available-for-sale	428.2	414.8
Fair Value | Level 2 | Municipal bonds
Financial Assets
Debt securities, available-for-sale	1,740.5	1,767.9
Fair Value | Level 2 | Foreign government bonds
Financial Assets
Debt securities, available-for-sale	44.4	45.1
Fair Value | Level 2 | Corporate bonds
Financial Assets
Debt securities, available-for-sale	2,243.7	1,952.2
Fair Value | Level 2 | Other asset-backed securities
Financial Assets
Debt securities, available-for-sale	1,052.7	1,103.5
Fair Value | Level 3
Financial Assets
Equity securities	0.3	0.3
Short-term investments	0.0	0.0
Other investments	0.0	0.0
Totals	324.9	355.1
Separate Account (variable annuity) assets	0.0	0.0
Financial Liabilities
Investment contract and policy reserves, embedded derivatives	0.0	0.0
Other policyholder funds, embedded derivatives	108.9	104.5
Fair Value | Level 3 | Recurring
Financial Assets
Debt securities, available-for-sale	324.6	354.8
Fair Value | Level 3 | Mortgage-backed securities
Financial Assets
Debt securities, available-for-sale	0.0	11.1
Fair Value | Level 3 | Other, including U.S. Treasury securities
Financial Assets
Debt securities, available-for-sale	0.0	0.0
Fair Value | Level 3 | Municipal bonds
Financial Assets
Debt securities, available-for-sale	58.6	59.6
Fair Value | Level 3 | Foreign government bonds
Financial Assets
Debt securities, available-for-sale	0.0	0.0
Fair Value | Level 3 | Corporate bonds
Financial Assets
Debt securities, available-for-sale	150.5	155.8
Fair Value | Level 3 | Other asset-backed securities
Financial Assets
Debt securities, available-for-sale	$ 115.5	$ 128.3

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Fair Value of Financial Instruments - Rollforward of Instruments Measured on Recurring Basis (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Financial Assets
Beginning balance	$ 340.2	$ 357.2	$ 355.1	$ 295.2
Transfers into Level 3	31.6	88.9	58.8	194.0
Transfers out of Level 3	(42.7)	(53.5)	(75.9)	(66.5)
Total gains or losses
Net investment gains (losses) included in net income related to financial assets	0.0	0.0	0.0	0.0
Net unrealized investment gains (losses) included in OCI	4.8	12.4	1.6	(20.5)
Purchases	0.0	0.0	0.0	8.8
Issuances	0.0	0.0	0.0	0.0
Sales	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Paydowns, maturities and distributions	(9.0)	(5.3)	(14.7)	(11.3)
Ending balance	324.9	399.7	324.9	399.7
Financial Liabilities
Beginning balance	107.6	87.5	104.5	93.7
Transfers into Level 3	0.0	0.0	0.0	0.0
Transfers out of Level 3	0.0	0.0	0.0	0.0
Total gains or losses
Net investment (gains) losses included in net income related to financial liabilities	3.2	6.0	7.5	0.9
Net unrealized investment gains (losses) included in OCI	0.0	0.0	0.0	0.0
Purchases	0.0	0.0	0.0	0.0
Issuances	1.2	2.5	1.9	3.9
Sales	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Paydowns, maturities and distributions	(3.1)	(2.4)	(5.0)	(4.9)
Ending balance	108.9	93.6	108.9	93.6
Municipal bonds
Financial Assets
Beginning balance	58.6	104.9	59.6	44.3
Transfers into Level 3	0.0	10.7	0.0	74.5
Transfers out of Level 3	0.0	(45.9)	0.0	(45.9)
Total gains or losses
Net investment gains (losses) included in net income related to financial assets	0.0	0.0	0.0	0.0
Net unrealized investment gains (losses) included in OCI	0.3	3.8	(0.6)	0.8
Purchases	0.0	0.0	0.0	0.0
Issuances	0.0	0.0	0.0	0.0
Sales	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Paydowns, maturities and distributions	(0.3)	(0.3)	(0.4)	(0.5)
Ending balance	58.6	73.2	58.6	73.2
Corporate bonds
Financial Assets
Beginning balance	149.1	111.7	155.8	104.0
Transfers into Level 3	28.5	14.0	52.6	32.8
Transfers out of Level 3	(29.4)	(4.2)	(56.7)	(14.2)
Total gains or losses
Net investment gains (losses) included in net income related to financial assets	0.0	0.0	0.0	0.0
Net unrealized investment gains (losses) included in OCI	3.2	5.3	1.2	(0.2)
Purchases	0.0	0.0	0.0	6.9
Issuances	0.0	0.0	0.0	0.0
Sales	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Paydowns, maturities and distributions	(0.9)	(0.5)	(2.4)	(3.0)
Ending balance	150.5	126.3	150.5	126.3
Mortgage and Asset Backed Securities
Financial Assets
Beginning balance	132.2	140.5	139.4	146.8
Transfers into Level 3	3.1	64.2	6.2	86.7
Transfers out of Level 3	(13.3)	(3.4)	(19.2)	(6.4)
Total gains or losses
Net investment gains (losses) included in net income related to financial assets	0.0	0.0	0.0	0.0
Net unrealized investment gains (losses) included in OCI	1.3	3.3	1.0	(21.1)
Purchases	0.0	0.0	0.0	1.9
Issuances	0.0	0.0	0.0	0.0
Sales	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Paydowns, maturities and distributions	(7.8)	(4.5)	(11.9)	(7.8)
Ending balance	115.5	200.1	115.5	200.1
Total Fixed Maturity Securities
Financial Assets
Beginning balance	339.9	357.1	354.8	295.1
Transfers into Level 3	31.6	88.9	58.8	194.0
Transfers out of Level 3	(42.7)	(53.5)	(75.9)	(66.5)
Total gains or losses
Net investment gains (losses) included in net income related to financial assets	0.0	0.0	0.0	0.0
Net unrealized investment gains (losses) included in OCI	4.8	12.4	1.6	(20.5)
Purchases	0.0	0.0	0.0	8.8
Issuances	0.0	0.0	0.0	0.0
Sales	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Paydowns, maturities and distributions	(9.0)	(5.3)	(14.7)	(11.3)
Ending balance	324.6	399.6	324.6	399.6
Equity securities
Financial Assets
Beginning balance	0.3	0.1	0.3	0.1
Transfers into Level 3	0.0	0.0	0.0	0.0
Transfers out of Level 3	0.0	0.0	0.0	0.0
Total gains or losses
Net investment gains (losses) included in net income related to financial assets	0.0	0.0	0.0	0.0
Net unrealized investment gains (losses) included in OCI	0.0	0.0	0.0	0.0
Purchases	0.0	0.0	0.0	0.0
Issuances	0.0	0.0	0.0	0.0
Sales	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Paydowns, maturities and distributions	0.0	0.0	0.0	0.0
Ending balance	$ 0.3	$ 0.1	$ 0.3	$ 0.1

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Fair Value of Financial Instruments - Quantitative Information about Level 3 Fair Value Measurements (Details) $ in Millions	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, available-for-sale	$ 6,555.0	$ 6,345.3
Equity securities at fair value	145.7	121.6
Municipal bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, available-for-sale	1,799.1	1,827.5
Corporate bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, available-for-sale	2,408.8	2,122.9
Other asset-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, available-for-sale	1,168.2	1,231.8
Government mortgage-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, available-for-sale	678.3	$ 684.8
Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives embedded in fixed indexed annuity products	$ 108.9
Level 3 | discounted cash flow | lapse rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives embedded in fixed indexed annuity products, measurement input	0.0530
Level 3 | discounted cash flow | mortality multiplier | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives embedded in fixed indexed annuity products, measurement input	0.6300
Level 3 | discounted cash flow | option budget | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives embedded in fixed indexed annuity products, measurement input	0.0090
Level 3 | discounted cash flow | option budget | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives embedded in fixed indexed annuity products, measurement input	0.0250
Level 3 | discounted cash flow | non-performance adjustment | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives embedded in fixed indexed annuity products, measurement input	0.0500
Level 3 | Black Scholes | equity value | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Equity securities, measurement input	0.3100
Level 3 | Black Scholes | equity value | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Equity securities, measurement input	0.4100
Level 3 | Municipal bonds | discounted cash flow | I Spread | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0307
Level 3 | Municipal bonds | discounted cash flow | I Spread | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0391
Level 3 | Corporate bonds | discounted cash flow | N Spread | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0272
Level 3 | Corporate bonds | discounted cash flow | N Spread | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0553
Level 3 | Corporate bonds | market comparable | option adjusted spread | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.1254
Level 3 | Other asset-backed securities | discounted cash flow | constant prepayment rate | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.2000
Level 3 | Other asset-backed securities | discounted cash flow | T spread | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0235
Level 3 | Other asset-backed securities | discounted cash flow | T spread | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0800
Level 3 | Other asset-backed securities | discounted cash flow | PDI interest margin | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0713
Level 3 | Other asset-backed securities | discounted cash flow | SBL interest margin | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0450
Level 3 | Other asset-backed securities | vendor price | haircut | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0300
Level 3 | Other asset-backed securities | vendor price | haircut | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0500
Level 3 | Government mortgage-backed securities | vendor price | haircut | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0300
Level 3 | Government mortgage-backed securities | vendor price | haircut | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt securities, measurement input	0.0500

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Fair Value of Financial Instruments - Financial Instrument Not Carried at Fair Value (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Level 1
Investments
Other investments	$ 0.0	$ 0.0
Deposit asset on reinsurance	0.0	0.0
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	0.0	0.0
Investment contract and policy reserves, account values on life contracts	0.0	0.0
Other policyholder funds	0.0	0.0
Short-term debt	0.0	0.0
Long-term debt	0.0	0.0
Level 2
Investments
Other investments	0.0	0.0
Deposit asset on reinsurance	0.0	0.0
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	0.0	0.0
Investment contract and policy reserves, account values on life contracts	0.0	0.0
Other policyholder funds	857.7	590.7
Short-term debt	0.0	0.0
Long-term debt	313.6	331.1
Level 3
Investments
Other investments	164.3	172.1
Deposit asset on reinsurance	2,948.5	3,030.6
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	5,031.5	4,963.3
Investment contract and policy reserves, account values on life contracts	110.9	108.4
Other policyholder funds	56.5	56.1
Short-term debt	135.0	135.0
Long-term debt	0.0	0.0
Carrying Amount
Investments
Other investments	160.7	168.3
Deposit asset on reinsurance	2,456.8	2,420.9
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	4,911.3	4,847.6
Investment contract and policy reserves, account values on life contracts	101.4	98.7
Other policyholder funds	914.2	646.8
Short-term debt	135.0	135.0
Long-term debt	278.5	302.3
Fair Value
Investments
Other investments	164.3	172.1
Deposit asset on reinsurance	2,948.5	3,030.6
Financial Liabilities
Investment contract and policy reserves, fixed annuity contracts	5,031.5	4,963.3
Investment contract and policy reserves, account values on life contracts	110.9	108.4
Other policyholder funds	914.2	646.8
Short-term debt	135.0	135.0
Long-term debt	$ 313.6	$ 331.1

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Deposit Asset on Reinsurance (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Apr. 01, 2019
Effects of Reinsurance [Line Items]
Reinsurance block of in-force fixed and variable annuity business			$ 2,900.0
Reinsured percentage of total in force fixed annuity account balances			50.00%
Fixed annuity reserves reinsured on a coinsurance basis							$ 2,200.0
Separate account asset	$ 3,256.7			$ 3,256.7		$ 2,891.4
Separate account liability	3,256.7			3,256.7		$ 2,891.4
Net investment income	109.2	$ 80.4		204.7	$ 162.7
Deposit asset on reinsurance
Effects of Reinsurance [Line Items]
Net investment income	25.1	$ 23.9		49.5	$ 47.6
Reinsurance Contract Modified Coinsurance Basis
Effects of Reinsurance [Line Items]
Separate account asset	700.0			700.0
Separate account liability	$ 700.0			$ 700.0
Minimum
Effects of Reinsurance [Line Items]
Minimum crediting rating			4.50%

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Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Goodwill [Line Items]
Goodwill	$ 43.5	$ 43.5
Property and Casualty
Goodwill [Line Items]
Goodwill	9.5
Supplemental
Goodwill [Line Items]
Goodwill	19.6
Retirement
Goodwill [Line Items]
Goodwill	4.5
Life
Goodwill [Line Items]
Goodwill	$ 9.9

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Goodwill and Intangible Assets - Narrative (Details) $ in Millions	Jun. 30, 2021 USD ($)
Benefit Consultants Group Inc.
Goodwill [Line Items]
Acquired finite-lived intangible assets	$ 14.1
NTA
Goodwill [Line Items]
Acquired finite-lived intangible assets	$ 160.4

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Goodwill and Intangible Assets - Summary of Finite-Lived Intangible Assets (Details) $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($)
Finite-Lived Intangible Assets [Line Items]
Weighted Average useful Life (in Years)	23 years
At inception	$ 174.5
Accumulated amortization	(33.4)
Total	$ 141.1
Value of business acquired
Finite-Lived Intangible Assets [Line Items]
Weighted Average useful Life (in Years)	30 years
At inception	$ 94.4
Accumulated amortization	$ (14.3)
Value of distribution acquired
Finite-Lived Intangible Assets [Line Items]
Weighted Average useful Life (in Years)	17 years
At inception	$ 54.0
Accumulated amortization	$ (10.2)
Value of agency relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average useful Life (in Years)	14 years
At inception	$ 17.0
Accumulated amortization	$ (5.2)
Value of customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average useful Life (in Years)	10 years
At inception	$ 9.1
Accumulated amortization	$ (3.7)

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Goodwill and Intangible Assets - Estimated Future Amortization (Details) $ in Millions	Jun. 30, 2021 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2021 (excluding the six months ended June 30, 2021)	$ 6.4
2022	12.1
2023	11.2
2024	10.5
2025	9.8
Thereafter	91.1
Total	$ 141.1

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Goodwill and Intangible Assets - Summary of Indefinite-Lived Intangibles (Details) $ in Millions	Jun. 30, 2021 USD ($)
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	$ 10.8
Trade names
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	7.9
State licenses
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	$ 2.9

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Unpaid Claims and Claim Expenses - Summary of Reinsurance Reserve Balances (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Information [Line Items]
Beginning gross reserves			$ 438.8
Claims and claim expense payments for claims occurring during:
Ending gross reserves	$ 433.6		433.6
Benefits, claims and settlement expenses	147.1	$ 143.0	281.4	$ 281.7
Property and Casualty
Segment Reporting Information [Line Items]
Beginning gross reserves	374.1	382.2	372.2	387.0
Less: reinsurance recoverables	112.5	119.0	112.9	120.5
Net reserves, beginning of period	261.6	263.2	259.3	266.5
Incurred claims and claim expenses:
Claims occurring in the current period	118.1	109.1	212.9	214.6
Decrease in estimated reserves for claims occurring in prior periods	(4.2)	(1.0)	(4.2)	(2.0)
Total claims and claim expenses incurred	113.9	108.1	208.7	212.6
Claims and claim expense payments for claims occurring during:
Current period	79.1	61.4	113.5	104.9
Prior periods	36.9	37.5	95.0	101.8
Total claims and claim expense payments	116.0	98.9	208.5	206.7
Ending gross reserves	368.4	388.5	368.4	388.5
Plus: reinsurance recoverables	108.9	116.1	108.9	116.1
Net reserves, end of period	259.5	272.4	259.5	272.4
Life and Annuity Segments
Claims and claim expense payments for claims occurring during:
Net reserves, end of period	65.2	56.1	65.2	56.1
Benefits, claims and settlement expenses	$ 33.2	$ 34.9	$ 72.7	$ 69.1

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Unpaid Claims and Claim Expenses - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Property and Casualty
Segment Reporting Information [Line Items]
Favorable development of total reserves for property and casualty claims occurring in prior years	$ 4.2	$ 1.0	$ 4.2	$ 2.0

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Reinsurance - Summary of Reinsurance Activity (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Gross Amount
Premiums written and contract deposits, Gross Amount	$ 351.2	$ 332.4	$ 671.8	$ 666.1
Premiums and contract charges earned, Gross Amount	231.5	230.6	465.7	473.8
Benefits, claims and settlement expenses, Gross Amount	144.6	143.3	280.2	282.8
Ceded to Other Companies
Premiums written and contract deposits, Ceded to Other Companies	5.6	6.4	11.5	12.7
Premiums and contract charges earned, Ceded to Other Companies	8.1	8.3	16.5	16.7
Benefits, claims and settlement expenses, Ceded to Other Companies	(1.0)	2.4	1.5	4.3
Assumed from Other Companies
Premiums written and contract deposits, Assumed from Other Companies	2.5	3.1	4.0	4.5
Premiums and contract charges earned, Assumed from Other Companies	2.4	3.1	4.2	4.6
Benefits, claims and settlement expenses, Assumed from Other Companies	1.5	2.1	2.7	3.2
Net Amount
Premiums written and contract deposits, Net Amount	348.1	329.1	664.3	657.9
Premiums and contract charges earned, Net Amount	225.8	225.4	453.4	461.7
Benefits, claims and settlement expenses, Net Amount	$ 147.1	$ 143.0	$ 281.4	$ 281.7

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Commitments (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Unfunded commitments to purchase investments	$ 786.3	$ 571.9

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Segment Information - Summary of Segment Activity (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) segment	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment			5
Number of operating segments | segment			4
Summarized financial information for these segments
Premiums and contract charges earned	$ 225.8	$ 225.4	$ 453.4	$ 461.7
Net investment income	109.2	80.4	204.7	162.7
Net income (loss)	46.7	30.5	86.0	49.0
Assets	14,190.1		14,190.1		$ 13,471.8
Intersegment eliminations
Summarized financial information for these segments
Net investment income	(0.5)	(0.6)	(1.1)	(1.1)
Assets	(80.5)		(80.5)		(90.1)
Property and Casualty
Summarized financial information for these segments
Premiums and contract charges earned	155.0	156.2	310.8	322.7
Property and Casualty | Operating segments
Summarized financial information for these segments
Net investment income	21.7	6.3	32.5	16.6
Net income (loss)	19.3	11.3	47.2	37.9
Assets	1,313.2		1,313.2		1,324.9
Supplemental
Summarized financial information for these segments
Premiums and contract charges earned	31.6	33.3	63.3	66.3
Assets	855.0		855.0		811.5
Supplemental | Operating segments
Summarized financial information for these segments
Net investment income	6.3	4.0	11.6	7.5
Net income (loss)	12.0	9.5	23.4	20.0
Retirement
Summarized financial information for these segments
Premiums and contract charges earned	9.2	6.7	17.8	14.1
Retirement | Operating segments
Summarized financial information for these segments
Net investment income	62.0	55.1	122.4	108.6
Net income (loss)	11.5	9.7	22.1	8.8
Assets	9,800.6		9,800.6		9,198.7
Life
Summarized financial information for these segments
Premiums and contract charges earned	30.0	29.2	61.5	58.6
Life | Operating segments
Summarized financial information for these segments
Net investment income	19.8	15.6	39.4	31.2
Net income (loss)	5.0	1.9	5.7	2.5
Assets	2,142.9		2,142.9		2,044.5
Corporate and Other
Summarized financial information for these segments
Net investment income	(0.1)	0.0	(0.1)	(0.1)
Net income (loss)	(1.1)	$ (1.9)	(12.4)	$ (20.2)
Assets	$ 158.9		$ 158.9		$ 182.3

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			$ 1,790.1
Other comprehensive income (loss) before reclassifications	$ 93.3	$ 147.5	(35.8)	$ 43.0
Amounts reclassified from AOCI	(4.7)	(5.0)	1.7	5.7
Other comprehensive income (loss)	88.6	142.5	(34.1)	48.7
Ending balance	1,816.6	1,639.8	1,816.6	1,639.8
Pretax reclassification amounts from AOCI, tax	1.2	1.4	(0.5)	(1.5)
Net Unrealized Investment Gains (Losses) on Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	243.6	136.6	366.3	230.4
Other comprehensive income (loss) before reclassifications	93.3	147.5	(35.8)	43.0
Amounts reclassified from AOCI	(4.7)	(5.0)	1.7	5.7
Other comprehensive income (loss)	88.6	142.5	(34.1)	48.7
Ending balance	332.2	279.1	332.2	279.1
Pretax reclassification amounts from accumulated other comprehensive income (loss)	5.9	6.4	(2.2)	(7.2)
Net Funded Status of Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(11.2)	(10.7)	(11.2)	(10.7)
Other comprehensive income (loss) before reclassifications	0.0	0.0	0.0	0.0
Amounts reclassified from AOCI	0.0	0.0	0.0	0.0
Other comprehensive income (loss)	0.0	0.0	0.0	0.0
Ending balance	(11.2)	(10.7)	(11.2)	(10.7)
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	232.4	125.9	355.1	219.7
Ending balance	$ 321.0	$ 268.4	$ 321.0	$ 268.4

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Supplemental Consolidated Cash and Cash Flow Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Supplemental Cash Flow Elements [Abstract]
Cash	$ 28.3		$ 21.8
Restricted cash	1.1		0.5
Total cash and restricted cash reported in the Consolidated Balance Sheets	29.4	$ 82.4	$ 22.3	$ 25.5
Cash paid (recovered) during the six months for interest	6.8	8.2
Cash paid (recovered) during the six months for income taxes	$ 13.4	$ (0.6)