HMN US Equity☆

ITEM 7. 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 II - Item 7. An explanation of these measures is contained in the Glossary of Selected Terms included as Exhibit 99.1 to this Annual Report on Form 10-K 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 Fourth Quarter 2022 Investor Supplement.

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

This MD&A covers the following:

Page

Introduction 39

Consolidated Financial Highlights 40

Consolidated Results of Operations 41

Application of Critical Accounting Estimates 45

Results of Operations by Segment 54

Property & Casualty 54

Life & Retirement 57

Supplemental & Group Benefits 60

Corporate & Other 61

Investment Results 61

Liquidity and Capital Resources 64

Future Adoption of New Accounting Standards 69

Effects of Inflation and Changes in Interest Rates 70

Introduction

The purpose of our MD&A is to provide an understanding of our consolidated results of operations and financial condition and should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in Part II - Item 8 of this Annual Report on Form 10-K. Our MD&A generally discusses the results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021. For a discussion of the results of operations for the year ended December 31, 2021 compared to the year ended December 31, 2020, please refer to Part II - Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission (SEC) on February 25, 2022.

HMEC is an insurance holding company focused on helping America’s educators and others who serve the community achieve lifelong financial success. Through our subsidiaries, we market and underwrite individual and group insurance and financial solutions tailored to the needs of the educational community including:

•personal lines of property and casualty insurance, primarily auto and property coverages

•retirement products, primarily tax-qualified fixed and variable annuities

•life insurance, primarily traditional term and whole life insurance products

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•worksite direct insurance products, including cancer, heart, hospital, supplemental disability and accident

•employer-sponsored insurance products, primarily long-term disability and short-term disability

We market our products primarily to K-12 teachers, administrators and other employees of public schools and their families, whether they engage with Horace Mann directly or through their district/employer.

Effective January 1, 2022, we acquired 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), for $172.3 million which added employer-sponsored products. The Seller has a potential earn-out of up to $12.5 million payable in cash, if specified financial targets are achieved by the end of 2023. As a result of the acquisition, Madison National became a wholly owned subsidiary of HMEC.

We conduct and manage our business in four reporting segments. The three reporting segments representing the major lines of business, are: (1) Property & Casualty (primarily personal lines of auto and property insurance products), (2) Life & Retirement (primarily tax-qualified fixed and variable annuities as well as life insurance products), and (3) Supplemental & Group Benefits (primarily cancer, heart, hospital, supplemental disability, accident, short-term and long-term group disability, and group term life coverages). We do not allocate the impact of corporate-level transactions to these reporting segments, consistent with the basis for management's evaluation of the results of those segments, but classify those items in the fourth reporting segment, Corporate & 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. See Part II - Item 8, Note 19 of the Consolidated Financial Statements in this Annual Report on Form 10-K for more information.

Consolidated Financial Highlights

Per diluted share:

Net investment losses, after tax (1.06) (0.20) N.M.

Net income return on equity - last twelve months (0.2) % 8.0 % -8.2 pts

For 2022, net income decreased $145.4 million, primarily due to the impact of higher net investment losses mainly from changes in fair values of equity securities and realized losses on disposition of fixed maturity securities, higher inflation and other factors driving auto loss severity, impacts of equity market declines on deferred policy acquisition costs (DAC) unlocking, asset-based fees and returns on limited partnership interests, as well as increases in interest credited and interest expense due to the rising interest rate environment.

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Consolidated Results of Operations

Net premiums and contract charges earned $ 1,029.0 $ 889.6 15.7 %

Net investment losses (56.5) (11.0) N.M.

Benefits, claims and settlement expenses 761.6 617.7 23.3 %

DAC unlocking and amortization expense 98.7 94.7 4.2 %

Intangible asset amortization expense 16.8 13.0 29.2 %

Other expense - goodwill and intangible asset impairments 4.8 — N.M.

Income tax expense (benefit) (9.3) 32.1 -129.0 %

Net Premiums and Contract Charges Earned

For 2022, net premiums and contract charges earned increased $139.4 million, primarily due to the addition of the employer-sponsored business partially offset by lower net premiums earned in Property & Casualty.

Net Investment Income

Total net investment income in 2022 decreased $21.6 million, primarily attributable to returns below our historical average in our portfolio of limited partnership interests. Yields have risen for recent investments due to the rising interest rate environment. The annualized investment yield on the portfolio excluding limited partnership interests* was as follows:

Year Ended December 31,

During 2022, we continued to identify and purchase investments, including alternative 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 protection and risk.

Horace Mann Educators Corporation Annual Report on Form 10-K 41

Net Investment Losses

For 2022, net investment losses increased $45.5 million mainly from changes in fair values of equity securities and realized losses on disposition of fixed maturity securities. The break down of net investment gains (losses) by transaction type is shown in the following table:

($ in millions) Year Ended December 31,

Credit loss and intent-to-sell impairments $ (10.7) $ (10.4)

Sales and other, net (17.8) 4.3

Change in fair value - equity securities (33.2) (2.3)

Change in fair value and losses realized on settlements - derivatives 5.2 (2.6)

Net investment losses $ (56.5) $ (11.0)

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

Other Income

For 2022, other income decreased $19.5 million, primarily due to an indemnification agreement associated with the employer-sponsored business.

Benefits, Claims and Settlement Expenses

For 2022, benefits, claims and settlement expenses increased $143.9 million, primarily due to an increase in auto losses and the addition of the employer-sponsored business.

Interest Credited

For 2022, interest credited increased $13.2 million, driven primarily by the impact of rising interest rates associated with advances received under FHLB funding agreements. 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 2.5% for 2022 and 2.4% for 2021.

Operating Expenses

For 2022, operating expenses increased $64.4 million, primarily due to the addition of the employer-sponsored business.

DAC Unlocking and Amortization Expense

For 2022, DAC unlocking and amortization expense increased $4.0 million, primarily due to volatility in financial markets leading to unfavorable DAC unlocking in the Life & Retirement segment, partially offset by reduced amortization expense in the Property & Casualty segment.

Intangible Asset Amortization Expense

For 2022, intangible asset amortization expense increased $3.8 million, primarily due to the acquisition of Madison National.

Interest Expense

For 2022, interest expense increased $5.5 million, primarily due to an increase in floating interest rates on the Revolving Credit Facility.

Other Expense - Goodwill and Intangible Asset Impairments

For 2022, other expense represents goodwill and intangible asset impairment charges with regards to Benefit Consultants Group, Inc. (BCG), a reporting unit within the Retirement operating segment. See Part II - Item 8, Note 7 of the Consolidated Financial Statements in this Annual Report on Form 10-K for further information.

Income Tax Expense (Benefit)

The effective income tax rate on our pretax income (loss), including net investment gains (losses) was 78.2% and 18.4% for the years ended December 31, 2022 and 2021, respectively. Income from investments in tax-

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advantaged securities reduced the effective income tax rates by 54.6 and 3.5 percentage points for 2022 and 2021, respectively. The goodwill and intangible asset impairment charges in the Life & Retirement segment decreased the effective income tax rate by 38.7 percentage points as of December 31, 2022.

In August 2022, the Inflation Reduction Act of 2022 (IRA) was passed by the U.S. Congress and signed into law by the Executive Branch. The IRA includes a new Federal alternative minimum tax (AMT), effective in 2023, that is based on the adjusted financial statement income (AFSI) set forth on the applicable financial statement (AFS) of an applicable corporation. A corporation is an applicable corporation if its rolling average pre-tax AFSI over three prior years (starting with years 2020 - 2022) is greater than $1.0 billion. For a group of related entities, the $1.0 billion threshold is determined on a group basis, and the group’s AFSI is generally treated as the AFSI for all separate taxpayers in the group. Except under limited circumstances, once a corporation is an applicable corporation, it is an applicable corporation in all future years.

An applicable corporation is not automatically subject to an AMT liability. The corporation’s tentative AMT liability is equal to 15.0% of its adjusted AFSI, and AMT is payable to the extent the tentative AMT liability exceeds regular corporate income tax. However, any AMT paid would be indefinitely available as a credit carryover that could reduce future regular tax in excess of AMT.

HMEC and its controlled group of corporations have determined that it likely will not be an applicable corporation in 2023. In making such determination, the group has made certain interpretations of, and assumptions regarding, the AMT provisions of the IRA. The U.S. Treasury Department is expected to issue guidance throughout 2023 that may differ from the group’s interpretations and assumptions and that could alter the group’s determination.

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.

The tax effects of legislation enacted in 2020 due to the Coronavirus pandemic were reflected in our income tax expense calculations as of December 31, 2020. Total income tax expense for the twelve months ended December 31, 2020, included a benefit of $2.8 million (that reduced the effective income tax rate by 1.7 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%.

As of December 31, 2022, our federal income tax returns for years prior to 2019 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. See Part II - Item 8, Note 11 of the Consolidated Financial Statements in this Annual Report on Form 10-K for further information.

Outlook for 2023

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

At the time of issuance of this Annual Report on Form 10-K, we estimate that 2023 full year net income will be within a range of $2.00 to $2.30 per diluted share, generating a core return on equity* near 6%.

Property & Casualty Segment

In 2023, net income for Property & Casualty is anticipated to be in the range of $5 million to $10 million. The primary factors in our outlook include:

•Catastrophe loss assumption of approximately 10 points on the combined ratio, in line with the 10-year average and consistent with historical frequencies and current severities applied to modeled exposures

•Property combined ratio near 100%, anticipating rate actions of 12% to 15% over the next four quarters, reflecting inflation and current loss trends, accompanied by ‘inflation guard’ increases

•Auto combined ratio of 106% to 107%, anticipating auto rates to increase by 18% to 20% over the next four quarters, supplemented by non-rate underwriting actions

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•Net investment income over 30% higher in this segment than in 2022, with limited partnership returns estimated near their 10-year average

Our longer-term Property & Casualty combined ratio target remains 95-96%.

Supplemental & Group Benefits Segment

In 2023, net income for Supplemental & Group Benefits is anticipated to be in the range of $40 million to $44 million. The primary factors in our outlook include:

•Anticipates claims utilization for supplemental and disability products returning to near pre-pandemic levels, leading to a segment benefit ratio closer to our longer-term target of 43%, including a benefit ratio of approximately 35% for worksite direct products and approximately 50% for employer-sponsored products

•Higher expenses reflecting investments in the infrastructure for this business as well as a higher allocation of corporate expenses to reflect the segment’s utilization of shared staff, distribution, and other resources.

Life & Retirement Segment

In 2023, net income for Life & Retirement is anticipated in the range of $67 million to $70 million. This guidance includes the adoption of LTDI effective January 1, 2023. The spread on the fixed annuity business is expected to be in the range of 220 to 230 basis points. Mortality is anticipated to remain within actuarial expectations and increase slightly from 2022.

Corporate & Other Segment

Corporate interest expense is expected to be in the range of $26 million to $27 million in 2023 due to rising interest rates.

Investments

For 2023, we expect total net investment income of between $434 million and $444 million, including approximately $104 million of accreted investment income on the deposit asset on reinsurance in Retirement. The expectation of full-year net investment income from the managed portfolio of between $330 million and $340 million reflects stronger returns from our commercial mortgage loan portfolio as well as the benefits of the rising rate environment over the past 12 months. Limited partnership returns are estimated near their 10-year average of 8.5%.

As described in Application of 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 Part I - Items 1 and 1A of this Annual Report on Form 10-K 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.

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Application of 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 our 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 to 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 Consolidated Financial Statements set forth in Part II - Item 8 of this Annual Report on Form 10-K.

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

•Evaluation of credit loss impairments for fixed maturity securities

•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 expense reserves

•Valuation of liabilities for group benefits unpaid claims and claim expense reserves

•Valuation of certain investment contracts and policy reserves

•Valuation of long-duration contracts under the new accounting guidance in ASU 2018-12

•Valuation of assets acquired and liabilities assumed under purchase accounting

Although variability is inherent in these accounting estimates, we believe the amounts provided are appropriate based upon the facts available during preparation of the consolidated financial statements.

Valuation of Hard-to-Value Fixed Maturity Securities

The fair value of a fixed maturity security is the estimated amount at which the security could be exchanged in an orderly transaction between knowledgeable, unrelated and willing parties. We utilize ICE Pricing Data, our investment managers and custodian bank to obtain fair value prices from independent third-party valuation service providers, broker quotes, model prices and matrix pricing. Each month, we obtain fair value prices from our investment managers and custodian bank, each of which use a variety of independent, nationally recognized pricing sources to determine market valuations for fixed maturity securities. Differences in prices between the sources that we consider significant are researched and we utilize the price that we consider most representative of an exit price. Typical inputs used by these pricing sources include, but are not limited to, reported trades, bids, offers, benchmark yield curves, benchmarking of like securities, rating designations, sector groupings, issuer spreads and/or estimated cash flows, prepayment speeds and default rates as well as the Bloomberg Spread Matrix, among others. Our fixed maturity securities portfolio is primarily publicly traded, which allows for a high percentage of the fixed maturity securities portfolio to be priced through pricing services. Approximately 88.6% of the fixed maturity securities portfolio, based on fair value, was priced through pricing services or index priced using observable inputs as of December 31, 2022.

The valuation of hard-to-value fixed maturity securities (generally 75 - 125 securities) is more subjective because the markets are less liquid and there is a lack of observable market-based inputs. This may increase the potential that the estimated fair value of an investment is not reflective of the price at which an actual transaction would occur. When the pricing sources cannot provide fair value determinations, the investment managers obtain non-binding price quotes from brokers. For those securities where the investment manager cannot obtain broker quotes, they will model the security, generally using estimated cash flows of the underlying collateral.

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Brokers' valuation methodologies as well as investment managers’ modeling methodologies are sometimes matrix-based, using indicative evaluation measures and adjustments for specific security characteristics and market sentiment. The selection of the market inputs and assumptions used to estimate the fair value of hard-to-value fixed maturity securities requires judgment and includes: benchmark yield, liquidity premium, estimated cash flows, prepayment speeds and default rates, spreads, weighted average life and credit rating. The extent of the use of each market input depends on the market sector and market conditions. Depending on the security, the priority of the use of inputs may change or some market inputs may not be relevant. For some securities, additional inputs may be necessary.

We gain assurance that our portfolio of fixed maturity securities including hard-to-value fixed maturity securities is appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with GAAP. Our processes and controls are designed to ensure (1) the valuation methodologies are appropriate and consistently applied, (2) the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and (3) the fair values are accurately recorded. For example, on a continuing basis, we assess the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers. We perform procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, we may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third-party valuation sources for selected securities.

As of December 31, 2022, Level 3 invested assets comprised 7.8% of our total investment portfolio based on fair value. Invested assets are classified as Level 3 when fair value is determined based on unobservable inputs that are supported by little or no market activity and those inputs are significant to the determination of fair value.

Evaluation of Credit Loss Impairments for Fixed Maturity Securities

For fixed maturity securities classified as available for sale, the difference between amortized cost, net of a credit loss allowance (i.e., amortized cost, net) and fair value, net of certain other items and deferred income taxes (as disclosed in Part II - Item 8, Note 3 of the Consolidated Financial Statements in this Annual Report on Form 10-K) is reported as a component of accumulated other comprehensive income (loss) (i.e., AOCI) on the Consolidated Balance Sheets and is not reflected in the operating results of any period until reclassified to net income upon the consummation of a transaction with an unrelated third party or when a credit loss allowance is recorded. We have a comprehensive portfolio monitoring process to evaluate fixed maturity securities (at the cusip/issuer level) on a quarterly basis that may require a credit loss allowance. These reviews, in conjunction with our investment managers’ quarterly credit reports and relevant factors such as (1) has the security missed any scheduled principal or interest payments in the current quarter; (2) has the security been downgraded to below investment grade by rating agencies or if the security was below investment grade at time of purchase, has the security been downgraded by two or more notches since acquisition; (3) has the security declined in value by more than 10% compared to the prior quarter; (4) has the market yield changed by more than 50 basis points; are all considered in the impairment assessment process.

For each fixed maturity security in an unrealized loss position, we assess whether management with the appropriate authority has made the decision to sell or whether it is more likely than not we will be required to sell the security before the anticipated recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with the incremental losses recorded as a net investment loss.

If we have not made the decision to sell the fixed maturity security and it is not more likely than not we will be required to sell the fixed maturity security before the anticipated recovery of its amortized cost basis, we evaluate whether we expect to receive cash flows sufficient to recover the entire amortized cost basis of the security. We estimate the anticipated recovery value based on the best estimate of future cash flows considering past events, current conditions and reasonable and supportable forecasts. The estimated future cash flows are discounted at the security’s current effective rate and are compared to the amortized cost basis of the security. The determination of cash flow estimates is inherently subjective, and methodologies may vary depending on facts and circumstances specific to the security. Our investment managers will calculate the anticipated recovery value of the security by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security at the time of purchase

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for fixed-rate securities. We will then review the assumptions/methodologies for reasonableness. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third-party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, sector credit ratings, financial condition of the bond insurer for insured fixed maturity securities, and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate the anticipated recovery value if we determine that the security is dependent on the liquidation of collateral for ultimate settlement.

If we do not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed maturity security, a credit loss allowance is recorded as a net investment loss for the shortfall in expected cash flows; however, the amortized cost basis, net of the credit loss allowance, may not be lower than the fair value of the security. The portion of the unrealized loss related to factors other than credit remains classified in AOCI. If we determine that the fixed maturity security does not have sufficient cash flows or other information to estimate the anticipated recovery value for the security, we may conclude that the entire decline in fair value is deemed to be credit related and the loss is recognized as a net investment loss.

When a security is sold or otherwise disposed or the security is deemed uncollectible and written-off, we reverse amounts previously recognized in the credit loss allowance through net investment gains (losses). Recoveries after write-offs are recognized when received.

For additional detail on credit loss impairments, see Part II - Item 8, Note 3 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

Evaluation of Goodwill and Intangible Assets for Impairment

Goodwill represents the excess of the amounts paid to acquire a business over the fair value of its net assets at the date of acquisition. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill impairment is the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. A goodwill impairment charge could have a material adverse effect on our results of operations. As of December 31, 2022, our allocation of goodwill on a net basis by reporting segment was as follows: Property & Casualty; $9.5 million, Life & Retirement; $12.4 million, and Supplemental & Group Benefits; $32.4 million. Also, see Part II - Item 8, Notes 1 and 7 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

The goodwill impairment test, as defined in GAAP, allows an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity performs a quantitative goodwill impairment test by comparing the fair value of a reporting unit to its carrying amount for purposes of confirming and measuring an impairment.

The process of evaluating goodwill for impairment requires management to make multiple judgments and assumptions to determine the fair value of each reporting unit, including discounted cash flow calculations, the level of our own share price and assumptions that market participants would make in valuing each reporting unit. Fair value estimates are based primarily on an in-depth analysis of historical experience, projected future cash flows and relevant discount rates, which consider market participant inputs and the relative risk associated with the projected cash flows. Other assumptions include levels of economic capital, future business growth, earnings projections and assets under management for each reporting unit. Estimates of fair value are subject to assumptions that are sensitive to change and represent our reasonable expectation regarding future developments. We also consider other valuation techniques such as peer company price-to-earnings and price-to-book multiples.

The assessment of goodwill recoverability requires significant judgment and is subject to inherent uncertainty. The use of different assumptions, within a reasonable range, could cause the fair value of a reporting unit to be below its carrying amount. Subsequent goodwill assessments could result in impairment, particularly for each reporting unit with at-risk goodwill, due to the impact of volatile financial markets on earnings, discount rate assumptions, liquidity and market capitalization. For 2022, lower than anticipated BCG revenues triggered a

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requirement to evaluate the goodwill associated with the BCG reporting unit within the Retirement operating segment resulting in a write-down of a certain amount of goodwill in 2022. For 2021, there were no events or material changes in circumstances that indicated that an adverse material change in the fair value of our reporting units occurred. For 2020, lower than anticipated wealth management sales for BCG Securities, Inc. (BCGS) outside of the education markets triggered a requirement to evaluate the goodwill associated with the BCGS reporting unit within the Retirement operating segment resulting in a write-down of a certain amount of goodwill in 2020. See Part II - Item 8, Note 7 of the Consolidated Financial Statements in this Annual Report on Form 10-K for more information.

The value of business acquired (VOBA) represents the difference between the fair value of insurance contracts and insurance policy reserves measured in accordance with our accounting policy for insurance contracts acquired. VOBA was based on an actuarial estimate of the present value of future distributable earnings for insurance in force on the acquisition date. VOBA was $70.7 million as of December 31, 2022 and is being amortized by product based on the present value of future premiums to be received. We estimate that we will recognize VOBA amortization of $5.8 million in 2023, $5.4 million in 2024, $5.1 million in 2025, $4.7 million in 2026 and $4.4 million in 2027.

We account for the value of distribution acquired associated with the acquisition of NTA (NTA VODA) based on an actuarial estimate of the present value of future business to be written by the existing distribution channel. NTA VODA was $39.3 million as of December 31, 2022 and is being amortized on a straight-line basis. We estimate that we will recognize NTA VODA amortization of $2.9 million in each of the years 2023 through 2027, respectively.

VOBA is reviewed for recoverability from future income which is primarily comprised of future premiums, benefits to be paid and net investment income. Costs which are deemed unrecoverable are expensed in the period in which the determination is made. No such costs were deemed unrecoverable during the year ended December 31, 2022.

NTA VODA is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The carrying amount of an amortizing intangible asset is not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount is not recoverable from undiscounted cash flows, the impairment is measured as the difference between the carrying amount and fair value. The test results from our annual impairment assessment for NTA VODA at October 1, 2022 indicated there was no impairment.

The value of customer relationships intangible assets are being amortized based on the present value of future profits to be received for BCG and based on the present value of future premiums for Madison National. The test results from our annual impairment assessments for customer relationships at October 1, 2022 indicated there was an impairment for the BCG reporting unit within the Retirement operating segment.

See Part II - Item 8, Note 7 of the Consolidated Financial Statements in this Annual Report on Form 10-K for more information.

Valuation of Annuity and Life Deferred Policy Acquisition Costs

DAC, consisting of commissions, policy issuance and other costs which are incremental and directly related to the successful acquisition of new or renewal business, are deferred and amortized on a basis consistent with the type of insurance coverage. For all annuity contracts, DAC is amortized over 20 years in proportion to estimated gross profits. DAC is amortized in proportion to estimated gross profits over 20 years for certain life insurance products with account values and over 30 years for IUL. For further information, see Part II - Item 8, Note 1 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

The most significant assumptions that are involved in the estimation of annuity gross profits include interest rate spreads, future financial market performance, business surrender/lapse rates, expenses and the impact of net investment gains (losses). For the variable deposit portion of Life & Retirement, we amortize DAC utilizing a future financial market performance assumption of a gross 8.0% reversion to the mean approach with a 200 basis point corridor around the mean during the reversion period, representing a cap and a floor on our long-term assumption. Our practice with regard to future financial market performance assumes that long-term appreciation in the financial markets is not changed by short-term market fluctuations, but is only changed when sustained annual deviations are experienced. We monitor these fluctuations and only change the assumption when the long-term expectation changes. The potential effect of an increase by 100 basis points in the assumed

48 Annual Report on Form 10-K Horace Mann Educators Corporation

future rate of return is reasonably likely to result in an estimated decrease in DAC amortization expense of approximately $2.5 million. The potential effect of a decrease by 100 basis points in the assumed future rate of return is reasonably likely to result in an estimated increase in DAC amortization expense of approximately $3.5 million. Although this evaluation reflects likely outcomes, it is possible an actual outcome may fall below or above these estimates. As of December 31, 2022, the ratio of DAC to the total annuity accumulated cash value was 4.1%.

In the event actual experience differs significantly from assumptions or assumptions are significantly revised, we may be required to record a material charge or credit to current period amortization expense for the period in which the adjustment is made. As noted above, there are key assumptions involved in the evaluation of DAC. In terms of the sensitivity of this amortization to three of the more significant assumptions, based on DAC as of December 31, 2022 and assuming all other assumptions are met, (1) a 10 basis point deviation in the annual targeted interest rate spread assumption would impact amortization between $0.3 million and $0.4 million, (2) a 1.0% deviation from the targeted financial market performance for the underlying mutual funds of our variable annuities would impact amortization between $0.3 million and $0.4 million and (3) a $1.0 million net investment gain (loss) would impact amortization between $0.1 million and $0.2 million. These results may change depending on the magnitude and direction of any actual deviations but represent a range of reasonably likely experience for the noted assumptions. Detailed discussion of the impact of adjustments to DAC amortization expense is included in Results of Operations by Segment.

The most significant assumptions that are involved in the estimation of life insurance gross profits include interest rates expected to be received on investments, business persistency and mortality. Conversions from term to permanent insurance cause an immediate write down of the associated DAC. The impact on amortization due to assumption changes has an immaterial impact on the results of operations.

Annually, we perform a gross premium valuation on life insurance policies to assess whether a loss recognition event has occurred. This involves discounting expected future benefits and expenses less expected future premiums. To the extent that this amount is greater than the liability for future benefits less the DAC asset, in aggregate for the life insurance block, a loss would be recognized by first writing off the DAC and then increasing the liability.

Valuation of Liabilities for Property & Casualty Unpaid Claims and Claim Expense Reserves

Underwriting results of Property & Casualty are significantly influenced by estimates of our ultimate liability for insured events. There is a high degree of uncertainty inherent in the estimates of ultimate losses underlying the liabilities for unpaid claims and claim expenses. This inherent uncertainty is particularly significant for liability-related exposures due to the extended period, often many years that transpire between a loss event, receipt of related claims data from policyholders and ultimate settlement of the claim. Reserves for Property & Casualty claims include provisions for payments to be made on reported claims (case reserves), incurred but not yet reported (IBNR) claims and associated settlement expenses (together, loss reserves).

The process by which these reserves are established requires reliance upon estimates based on known facts and on interpretations of circumstances, including our experience with similar cases and historical trends involving claim payments and related patterns, pending levels of unpaid claims and product mix, as well as other factors including court decisions, economic conditions, public attitudes and medical costs. We calculate and record a single best estimate of the reserve as of each reporting date.

Reserves are re-estimated quarterly. Changes to reserves are recorded in the period in which development factor changes result in reserve re-estimates. A detailed discussion of the process utilized to estimate loss reserves, risk factors considered and the impact of adjustments recorded during recent years is included in Part II - Item 8, Note 8 of the Consolidated Financial Statements in this Annual Report on Form 10-K. Due to the nature of our personal lines business, we have no exposure to losses related to claims for toxic waste cleanup, other environmental remediation or asbestos-related illnesses other than claims under property insurance policies for environmentally related items such as mold.

Based on our products and coverages, historical experience, and modeling of various actuarial methodologies used to develop reserve estimates, there is the potential of variability of the Property & Casualty loss reserves.

There are a number of assumptions involved in the determination of our Property & Casualty loss reserves. Among the key factors affecting recorded loss reserves for both long-tail and short-tail related coverages, claim severity and claim frequency are of particular significance. We estimate that a 2.0% change in claim severity or

Horace Mann Educators Corporation Annual Report on Form 10-K 49

claim frequency for the most recent 36 month period is a reasonably likely scenario based on recent experience and would result in a change in the estimated net reserves of between $5.0 million and $9.0 million for long-tail liability related exposures (auto liability coverages) and between $1.0 million and $3.0 million for short-tail liability related exposures (property and auto physical damage coverages). Actual results may differ, depending on the magnitude and direction of the deviation.

Our actuaries discuss their loss and loss adjustment expense actuarial analysis with management. As part of this discussion, the indicated point estimate of the IBNR loss reserve by line of business (coverage) is reviewed. Our actuaries also discuss any indicated changes to the underlying assumptions used to calculate the indicated point estimate. Any variance between the indicated reserves from these changes in assumptions and the previously carried reserves is reviewed. After discussion of these analyses and all relevant risk factors, management determines whether the reserve balances require adjustment. Our best estimate of loss reserves may change depending on a revision in the underlying assumptions.

Our liabilities for unpaid claims and claim expense reserves for Property & Casualty were as follows:

CaseReserves IBNRReserves Total(1) CaseReserves IBNRReserves Total(1)

(1)These amounts are gross, before reduction for ceded reinsurance reserves.

The facts and circumstances leading to our re-estimate of reserves relate to revisions of the development factors used to predict how losses are likely to develop from the end of a reporting period until all claims have been paid. Re-estimates occur because actual loss amounts are different than those predicted by the estimated development factors used in prior reserve estimates. As of December 31, 2022, the impact of a reserve re-estimation resulting in a 1.0% increase in net reserves would be a decrease of approximately $2.0 million in net income. A reserve re-estimation resulting in a 1.0% decrease in net reserves would increase net income by approximately $2.0 million.

Unfavorable prior years' reserve re-estimates decreased net income in 2022 by approximately $22.0 million pretax, primarily the result of unfavorable loss trends in auto for accident years 2021 and prior.

Valuation of Liabilities for Group Benefits Unpaid Claims and Claim Expense Reserves

Our Group Benefits has short-duration contracts that are generated from specialty health and group disability lines of business, and are accounted for based on actuarial estimates of the amount of loss inherent in that period’s claims, including losses incurred for which claims have not been reported. Short-duration contract loss estimates rely on actuarial observations of ultimate loss experience for similar historical events.

We maintain loss reserves for these lines of business to cover our estimated liability for unpaid losses and loss adjustment expenses, where material, (including legal, other fees, and costs not associated with specific claims but related to the claims payment function) for reported and unreported claims incurred as of the end of each accounting period. These loss reserves are based on actuarial assumptions. Many factors could affect these reserves, including economic and social conditions, frequency and severity of claims, medical trends resulting from the influences of underlying cost inflation, changes in utilization and demand for medical services, and changes in doctrines of legal liability and damage awards in litigation. Therefore, our reserves are necessarily based on estimates, assumptions and analysis of historical experience. Our results depend upon the variation between actual claims experience and the assumptions used in determining reserves and pricing products. Reserve assumptions and estimates require significant judgment and, therefore, are inherently uncertain. We cannot determine with precision the ultimate amounts that will be paid for actual claims or the timing of those payments. Our estimate of loss represents management's best estimate of our liability at the balance sheet date.

We believe that its liability for policy benefits and claims is reasonable and adequate to satisfy its ultimate liability. We primarily use our own loss development experience, but will also supplement that with data from outside actuaries, reinsurers and industry loss experience as warranted. To illustrate the impact that loss ratios

50 Annual Report on Form 10-K Horace Mann Educators Corporation

have on our loss reserves and related expenses, each hypothetical 1.0% change in the loss ratio for the group disability business (i.e., the ratio of insurance benefits, claims and settlement expenses to earned group disability premiums) for the year ended December 31, 2022, would increase reserves (in the case of a higher ratio) or decrease reserves (in the case of a lower ratio) by approximately $0.7 million with a corresponding increase or decrease to Benefits, claims and settlement expenses in our Consolidated Statement of Operations and Comprehensive Income (Loss).

For the specialty health line of business, IBNR claims liabilities plus expected development on reported claims are calculated using standard actuarial methods and practices. The “primary” assumption in the determination of specialty health reserves is that historical claim development patterns are representative of future claim development patterns. Factors that may affect this assumption include changes in claim payment processing times and procedures, changes in time delay in submission of claims, and the incidence of unusually large claims. Liabilities for claims for specialty health coverages are computed using completion factors and expected net loss ratios derived from actual historical premium and claim data. The reserving analysis includes a review of claim processing statistical measures and large claim early notifications; the potential impacts of any changes in these factors are not material. We have business that is serviced by third-party administrators. From time to time, there are changes in the timing of claims processing due to any number of factors including, but not limited to, system conversions and staffing changes during the year. These changes are monitored by us and the effects of these changes are taken into consideration during the claim reserving process. While these calculations are based on standard methodologies, they are estimates based on historical patterns. To the extent that actual claim payment patterns differ from historical patterns, such estimated reserves may be redundant or inadequate. The effects of such deviations are evaluated by considering claim backlog statistics and reviewing the reasonableness of projected claim ratios. Other factors which may affect the accuracy of policy benefits and claim estimates include the proportion of large claims which may take longer to adjudicate, changes in billing patterns by providers and changes in claim management practices such as hospital bill audits. Since our analysis considers a variety of outcomes related to these factors, we do not believe that any reasonably likely change in these factors will have a material effect.

With regards to our group disability line of business, the two “primary” assumptions on which disability policy benefits and claims are based are: (i) morbidity levels; and (ii) recovery rates. If morbidity levels increase, for example due to an epidemic or a recessionary environment, we would increase reserves because there would be more new claims than expected. With regards to the assumed recovery rate, if disabled lives recover more quickly than anticipated then the existing claims reserves would be reduced; if less quickly, the existing claims reserves would be increased. Advancements in medical treatments could affect future recovery, termination, and mortality rates.

Our liabilities for unpaid claims and claim expense reserves for Group Benefits were as follows:

($ in millions) December 31, 2022

Case Reserves IBNR Reserves Total(1)

Specialty health $ — $ 17.0 $ 17.0

(1)These amounts are gross, before reduction for ceded reinsurance reserves.

Favorable prior years' reserve re-estimates increased pretax income in 2022 by approximately $11.1 million, primarily the result of favorable loss trends in specialty health and group disability for loss years 2021 and prior.

Valuation of Certain Investment Contracts and Policy Reserves

Liabilities for future benefits on annuity and life policies are established in amounts adequate to meet the estimated future obligations on policies in force.

Liabilities for future benefits on deferred annuity contracts, excluding fixed indexed annuity (FIA) products, are carried at accumulated policyholder values without reduction for potential surrender or withdrawal charges. Liabilities for FIA products are bifurcated into an embedded derivative and a host contract. The embedded derivative is recognized at fair value and is reported in Other policyholder funds on the Consolidated Balance Sheets, and is determined using the option budget method. The host contract is accounted for as a debt

Horace Mann Educators Corporation Annual Report on Form 10-K 51

instrument with the initial amount determined as the consideration amount less the initial embedded derivative, as described above. Any discount to the minimum account value is accreted over the life of the products using the effective yield method. Key assumptions used in the estimation of the liabilities for FIA products include the risk free interest rate, the value of options currently in force, the future expected option budget based on product pricing targets, mortality and lapses.

Liabilities for future benefits on payout annuity contracts are determined as the present value of expected future benefit payments. Key assumptions used in the calculation include the future investment yield and mortality, for those contracts with life contingencies.

Liabilities for future policy benefits on supplemental insurance policies are computed using the net level premium method and are based on assumptions as to future investment yields, morbidity, mortality, persistency, expenses and other assumptions based on our experience, including provisions for adverse deviation. Mortality, morbidity and lapse assumptions for all policies have been based on standard actuarial tables which are modified as appropriate to reflect our own experience. In the event actual experience is worse than the assumptions, additional reserves may be required. This would result in recognition of a loss in the period for which the increase in reserves occurred.

Liabilities for future policy benefits on life insurance policies, excluding indexed universal life (IUL) products, are computed using the net level premium method and are based on assumptions as to future investment yield, mortality and lapses. Mortality and lapse assumptions for all policies have been based on actuarial tables which are consistent with our own experience. In the event actual experience is worse than the assumptions, additional reserves may be required. This would result in recognition of a loss in the period for which the increase in reserves occurred. Also, see Part II - Item 8, Note 1 of the Consolidated Financial Statements in this Annual Report on Form 10-K. Liabilities for IUL products are bifurcated into an embedded derivative and a host contract. The embedded derivative is recognized at fair value and is set equal to the fair value of the current call options purchased to hedge the liability. The host contract is measured using the retrospective deposit method which is equal to the account balance.

Valuation of Long-Duration Contracts Under the New Accounting Guidance in ASU 2018-12

In August 2018, the FASB issued targeted improvements to the accounting and disclosure guidance for long-duration insurance contracts (i.e., ASU 2018-12). The guidance in ASU 2018-12 (ASU) significantly changes how insurers account for long-duration insurance contracts. The Company will adopt the ASU effective January 1, 2023, using the modified retrospective transition method and apply the guidance as of January 1, 2021 (and record transition adjustments as of January 1, 2021) in the Company’s 2023 consolidated financial statements.

Under ASU 2018-12, a liability for future policy benefits, which is the present value of estimated future policy benefits to be paid to or on behalf of policyholders and certain related expenses less the present value of estimated future net premiums to be collected from policyholders, is accrued as premium revenue is recognized. The liability was estimated using assumptions that include discount rate, mortality, lapses, and expenses. The discount rate assumption was sourced from Bloomberg and other assumptions were based on judgments that consider our historical experience, industry data, and other factors.

For traditional and limited-payment contracts, contracts were grouped into cohorts by contract type and issue year. The liability was adjusted for differences between actual and expected experience. We reviewed our historical and future cash flow assumptions and updated the net premium ratio used to calculate the liability each time the assumptions were changed. These updated cash flows were used to calculate the revised net premiums and net premium ratio, which was used to derive an updated liability for future policy benefits as of the transition date and subsequent periods, discounted at the original contract issuance discount rate. This amount was then compared to the carrying amount of the liability as of that same date, before the updating of cash flow assumptions, to determine the change in liability estimate.

For traditional and limited-payment contracts, a standard discount rate was used to remeasure the liabilities that is equivalent to market level yields for upper-medium-grade (low credit risk) fixed income instruments. The discount rate assumption will be updated quarterly and used to remeasure the liability at the reporting date, with the resulting change reflected in other comprehensive income. For liability cash flows that are projected beyond the duration of market-observable level yields for upper-medium-grade (low credit risk) fixed income instruments, we use the last market-observable level yield and use linear interpolation to determine yield assumptions for durations that do not have market-observable yields.

52 Annual Report on Form 10-K Horace Mann Educators Corporation

We estimated that the transition date impact from remeasuring the liability for future policy benefits (LFPB) should result in a decrease in accumulated other comprehensive income (AOCI) of $499.3 million. This is due primarily to updating the LFPB discount rate assumptions previously locked-in for reserves held at the transition date to rates determined by reference to the transition date market level yields for upper-medium-grade (low credit risk) fixed income instruments as of December 31, 2020. As of December 31, 2022, the inception to date increase in AOCI from the use of a current market rate is estimated to be in the range of $55 million to $65 million.

Based on the reserves as of the transition date, the potential effect of a decrease of 50 basis points in the discount rate would result in an increase to the liability for future policy benefits by approximately $166 million and the potential effect of an increase of 50 basis points in the discount rate would result in a decrease to the liability for future policy benefits by approximately $148 million.

See Part II – Item 8, Note 1 of the Consolidated Financial Statements in this Annual Report on Form 10-K for more information.

Valuation of Assets Acquired and Liabilities Assumed under Purchase Accounting

In accounting for the acquisition of Madison National Life Insurance Company, Inc. (Madison National), assets acquired and liabilities assumed are recognized based on estimated fair values as of the date of acquisition. The excess of the purchase price when compared to the fair value of the net tangible and identifiable intangible assets acquired is recognized as goodwill. A significant amount of judgment is involved in estimating the individual fair values of tangible assets, intangible assets, and other assets and liabilities. We used all available information to make these fair value determinations and engaged third-party consultants for valuation assistance. The fair value of assets and liabilities as of the acquisition date were estimated using a combination of approaches, including the income approach, which requires us to project future cash flows and apply an appropriate discount rate; the cost approach, which required estimates of replacement costs and depreciation and obsolescence estimates; and the market approach. The estimates used in determining fair values were based on assumptions believed to be reasonable but which are inherently uncertain. Accordingly, actual results may differ materially from the projected results used to determine fair value.

The value of customer relationships acquired intangible asset was valued based on the actuarial appraisal method net of VOBA. This represents expected future premiums arising from ongoing relationships and includes assumed growth in premium in the first projection year as well as all premiums in projection years two through ten. The valuation of Madison National's policy reserves represents the present value of expected future benefits and expenses associated with the policies, valued using the actuarial appraisal approach to project and discount the future cash flows to estimate fair value.

The valuation of the assets acquired and liabilities assumed of Madison National required management to make multiple judgments and assumptions. Assumptions included future policy and contract charges, premiums, morbidity and mortality, and persistency by product, as well as expenses, investment returns, growth rates and other factors. One of the most significant inputs in these calculations is the discount rate used to arrive at the present value of the net cash flows. Actual experience on the purchased business may vary from these projections and the recovery of the net assets recorded is dependent upon the future profitability of the related business.

Horace Mann Educators Corporation Annual Report on Form 10-K 53

Results of Operations by Segment

Consolidated financial results primarily reflect the results of Property & Casualty, Life & Retirement, and Supplemental & Group Benefits reporting segments as noted in the Introduction and Outlook for 2023 sections of this MD&A, as well as the Corporate & Other reporting segment. These segments are defined based on financial information management uses to evaluate performance and to determine the allocation of resources.

The determination of segment data is described in more detail in Part II - Item 8, Note 19 of the Consolidated Financial Statements in this Annual Report on Form 10-K. The following sections provide analysis and discussion of results of operations for each of the reporting segments as well as investment results.

Property & Casualty

2022 net loss reflected the following factors:

•Significant increase in the auto loss ratio reflecting the impact on severity of overall inflation, including higher medical costs, increased usage of medical services and the current judicial environment

•Significant decrease in net investment income due to lower than historical returns on limited partnership interests in the current year versus outsized returns on limited partnership interests in the prior year

•Significant unfavorable prior years' reserve development in the current year versus favorable prior years' reserve development in the prior year

54 Annual Report on Form 10-K Horace Mann Educators Corporation

The following table provides certain financial information for Property & Casualty for the years indicated.

($ in millions, unless otherwise indicated) Year Ended December 31, 2022-2021

Financial Data:

Net premiums written*:

Change in unearned net premiums (9.3) 9.6 N.M.

Incurred claims and claims expenses:

Prior years' reserve development(1) 22.0 (7.2) N.M.

Total claims and claim expenses incurred 534.3 447.9 19.3 %

Operating expenses, including DAC amortization 166.9 164.8 1.3 %

Underwriting gain (loss) (93.0) 4.7 N.M.

Income (loss) before income taxes (58.2) 70.2 N.M

Net income (loss) (44.4) 57.0 N.M.

Core earnings (loss)* (44.4) 57.0 N.M.

Operating Statistics:

Auto

Loss and loss adjustment expense ratio 91.8 % 69.4 % 22.4 pts

Prior years' reserve development(1) 7.2 % -1.2 % 8.4 pts

Catastrophe losses 1.8 % 1.6 % 0.2 pts

Property

Loss and loss adjustment expense ratio 80.7 % 78.5 % 2.2 pts

Prior years' reserve development(1) -2.8 % -1.0 % -1.8 pts

Catastrophe losses 33.4 % 33.6 % -0.2 pts

Underlying combined ratio* 78.2 % 72.8 % 5.4 pts

Risks in force (in thousands)

(1) (Favorable) unfavorable.

(2) Includes assumed risks in force of 4.

Horace Mann Educators Corporation Annual Report on Form 10-K 55

Catastrophe losses incurred were as follows:(1)

($ in millions) Year Ended December 31,

Three months ended

(1) See Part I - Item 1 - Reporting Segments - Property & Casualty for further details regarding catastrophe losses for the past five years.

On a reported basis, the 22.9 point increase in the auto combined ratio in 2022 was mainly attributable to a 13.8 point increase in the auto underlying loss ratio* and an 8.4 point unfavorable increase in prior years' reserve development. Although frequency continues to trend back up toward pre-pandemic levels as miles driven continues to increase, higher severity is the primary driver of the increase in auto loss costs. This reflects the challenges being faced by the entire industry, including the unprecedented level of inflation that is driving higher replacement costs; the trend toward more severe accidents; and increased usage and costs of medical services. We continue to implement rate and other underwriting changes that address these trends. Unfavorable prior years' auto reserve development of $28.0 million was reported for 2022, reflecting the impact on severity of overall inflation, including higher medical costs, increased usage of medical services and the current judicial environment.

The reported property combined ratio increased 3.4 points in 2022, driven by frequency and severity of fire losses and non-weather losses related to water that continue to be above prior years. Favorable prior years' reserve development of $6.0 million benefited the reported property combined ratio by 2.8 points for 2022.

In 2022, total Property & Casualty net premiums written* increased $9.7 million as rate actions and inflation adjustments to coverage values for property more that offset declines in risks in force. The benefit of stronger retention is being offset by new business volumes that still remain below historical levels due to the lingering effect of the pandemic on sales*.

In 2022, auto net premiums written* decreased $0.5 million, primarily due to the continuing decline in auto risks in force partially offset by rate actions taken in the third and fourth quarters. For 2022, average net premium written and average net premium earned increased 2.7% and 0.2%, respectively. Planned auto rate changes will average a total of 18% to 20% in 2023 supplemented by non-rate underwriting actions. The number of educator risks has been over 80% relative to overall auto risks in force over the past two years.

In 2022, property and other net premiums written* increased $10.2 million due to increases in average net premium written and average net premium earned which increased 8.4% and 5.7% respectively, as inflation adjustments to coverage values continue to take effect. With inflationary pressure continuing, we expect rate actions in property of 12% to 15% over the next four quarters. When combined with the impact of "inflation guard", these actions should result in an increase in average renewal premium by 17% to 20% in 2023. The number of educator risks has been at or above 80% relative to overall property risks in force over the past two years.

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

56 Annual Report on Form 10-K Horace Mann Educators Corporation

Life & Retirement

2022 net income reflected the following factors:

•A decline of 44 basis points in the annualized net interest spread on fixed annuities

•Volatility in financial markets leading to unfavorable DAC unlocking and lower charges and fees earned on variable annuities and asset-based accounts

•Life results benefited from lower mortality costs during 2022

Horace Mann Educators Corporation Annual Report on Form 10-K 57

The following table provides certain information for the Life & Retirement segment for the years indicated.

Life & Retirement

Net premiums written and contract deposits* $ 544.8 $ 563.0 -3.2 %

Net premiums and contract charges earned 145.3 144.2 0.8 %

DAC amortization expense, excluding DAC unlocking 27.7 27.0 2.6 %

DAC unlocking(1) 5.1 (1.5) N.M.

Intangible asset amortization expense 1.1 1.3 -15.4 %

Other expenses - goodwill and intangible asset impairments 4.8 — N.M.

Life policies in force (in thousands) 162 163 -0.6 %

Life persistency - LTM 96.0 % 96.5 % -0.5 pts

Annuity contracts in force (in thousands) 228 230 -0.9 %

Horace Mann Retirement Advantage® contracts in force (in thousands) 17 15 13.3 %

Cash value persistency - LTM 93.7 % 94.4 % -0.7 %

(1) (Favorable) unfavorable.

For 2022, life annualized sales* were slightly higher and life persistency remained strong at 96.0%. Life & Retirement net income reflected an after-tax impairment charge of $3.8 million for goodwill and intangible assets due to lower than anticipated revenues associated with the BCG business of the Retirement operating segment.

For 2022, net annuity contract deposits* for variable and fixed annuities decreased $19.5 million, or 4.3%, from strong prior year levels. Educators continue to begin their relationship with Horace Mann through 403(b) retirement savings products, including attractive annuity products, which provide encouraging cross-sell opportunities. Cash value persistency remained strong at 93.7%.

As of December 31, 2022, annuity assets under management were down $461.4 million, or 8.6%, compared to a year ago primarily due to market depreciation. Assets under administration, which includes Horace Mann Retirement Advantage® and other advisory and recordkeeping assets, were down $1.3 billion, or 14.2%, from a year ago largely due to the effect of equity market performance on assets under management. The full-year 2022 annualized net interest spread on fixed annuities, excluding reinsurance, decreased 44 basis points, primarily reflecting lower net returns from the investment portfolios.

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 $649.8 million of the Life & Retirement investment portfolio and related investable cash flows will be reinvested at current market rates.

58 Annual Report on Form 10-K Horace Mann Educators Corporation

Interest rates rose swiftly throughout 2022. However, the risk of a deep recession or shock to the economy, such as a global pandemic, could result in a return to historically low interest rates. The current environment of higher interest rates have afforded us the opportunity to invest insurance cash flows and reinvested cash flows at higher yields, which could be a benefit to net investment income, but the higher interest rates have caused an increase to both realized investment losses when securities are sold, and to net unrealized investment losses in the remaining portfolios.

As a general guideline, based on our existing policies and investment portfolio, the impact from a 100 basis point decline in the average reinvestment rate would reduce Life & Retirement net investment income by approximately $2.5 million in year one and $7.5 million in year two, reducing the annualized net interest spread by approximately 9 basis points and 25 basis points in the respective periods, compared to the current period annualized net interest spread. 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.

We reinsure a $2.5 billion block of in force fixed annuities with a minimum crediting rate of 4.5% which 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 guaranteed minimum crediting rates for deferred annuity account values excluding the reinsured block is shown below.

($ in millions) December 31, 2022

Total Deferred Annuities Deferred Annuities atMinimum Crediting Rate

Guaranteed minimum crediting rates:

Horace Mann Educators Corporation Annual Report on Form 10-K 59

Supplemental & Group Benefits

2022 net income reflected the following factors:

•Inclusion of results from the newly acquired employer-sponsored business

•Sales* of worksite direct products were up $2.8 million, or 43.8%, and sales* of employer-sponsored products added another $6.9 million

•The benefit ratio on worksite direct products decreased sequentially due to a higher level of reserves released on lapsed policies

The following table provides certain information for Supplemental & Group Benefits for the years indicated.

Supplemental & Group Benefits

Net premiums and contract charges earned $ 275.5 $ 128.0 115.2 %

Other income (13.4) 2.6 N.M.

Benefits, settlement expenses and change in reserves 99.8 41.0 143.4 %

Interest credited 1.3 0.3 N.M.

Intangible asset amortization expense 15.7 11.7 34.2 %

Operating expense ratio(2) 35.2 % 28.4 % 6.8 pts

Worksite direct products benefits ratio 30.1 % 31.9 % -1.8 pts

Worksite direct premium persistency (rolling 12 months) 90.4 % 92.5 % -2.1 pts

Employer-sponsored products benefits ratio 41.9 % — % N.M.

(1) Ratio of benefits to net premiums earned.

(2) Ratio of operating expenses to total revenues.

(3) Ratio of income before income taxes to total revenues.

For 2022, total sales* were $16.1 million. Sales of worksite direct products* were $9.2 million representing an increase of 41.5%. Worksite direct persistency, while down slightly, still remains very strong at 90.4%. Sales of employer-sponsored products* added another $6.9 million.

60 Annual Report on Form 10-K Horace Mann Educators Corporation

The current year includes the results from the newly acquired employer-sponsored business which is driving increases in (1) benefits, settlement expenses and change in reserves, (2) operating expenses (includes DAC unlocking and amortization), and (3) intangible asset amortization expense. The non-cash impact of amortization of intangible assets under purchase accounting reduced pretax net income by $15.7 million and $11.7 million in 2022 and 2021, respectively. Pretax profit margin reflects a combination of worksite direct and employer-sponsored products.

Corporate & Other

The following table provides certain financial information for Corporate & Other for the years indicated.

Net investment losses, pretax (56.5) (11.0) N.M.

Net investment losses, after tax (44.5) (8.6) N.M.

For 2022, the net loss increased due to net investment losses which are mainly from changes in fair values of equity securities and realized losses on disposition of fixed maturity securities as well as an increase in interest expense on the Revolving Credit Facility.

Investment Results

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 $2.5 billion of fixed annuity liabilities related to legacy individual annuities written in 2002 or earlier.

Net investment income - investment portfolio $ 297.4 $ 321.4 -7.5 %

Investment income - deposit asset on reinsurance 103.5 101.1 2.4 %

Pretax net investment losses (56.5) (11.0) N.M.

For 2022, net investment income from our investment portfolio decreased $24.0 million, primarily due to yields on our portfolio of limited partnership interests returning to near-historical averages. In 2021, returns on our portfolio of limited partnership interests were well above historical averages. Investment yields on our portfolio excluding limited partnership interests, remained near 4.25% for 2022, with new money yields continuing to exceed yields in our core fixed maturity securities portfolio.

For 2022, pretax net investment losses increased $45.5 million primarily due to changes in fair values of equity securities and realized losses on disposition of fixed maturity securities. Pretax net unrealized investment losses on fixed maturity securities as of December 31, 2022 were $571.9 million compared to pretax net unrealized investment gains of $441.6 million as of December 31, 2021, reflecting a 236 basis point increase in the 10-year U.S. Treasury yield partially offset by wider credit spreads across most asset classes.

Horace Mann Educators Corporation Annual Report on Form 10-K 61

Fixed Maturity and Equity Securities Portfolios

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

($ in millions) December 31, 2022

Number ofIssuers FairValue AmortizedCost orCost Pretax NetUnrealizedLoss

Fixed maturity securities

Corporate bonds

Mortgage-backed securities

U.S. Government and federally sponsored agencies 242 370.2 416.5 (46.3)

Government bonds

Equity securities

Non-redeemable preferred stocks 26 $ 81.8

Common stocks 5 1.1

Closed-end fund 1 16.7

Total equity securities 32 $ 99.6

(1)The All Other Corporates category contains 18 additional industry classifications. Food and beverage, natural gas, telecommunications, broadcasting and media, and industry manufacturing represented $226.1 million of fair value as of December 31, 2022, with the remaining 13 classifications each representing less than $211.0 million.

(2)As of December 31, 2022, 100% were investment grade, with an overall credit rating of AA+, and the positions were well diversified by property type, geography and sponsor.

(3)Holdings are geographically diversified, 45.1% are tax-exempt and 74.4% 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- as of December 31, 2022.

(4)Based on fair value, 93.5% of the collateralized loan obligation securities were rated investment grade based on ratings assigned by a nationally recognized statistical ratings organization (NRSRO - S&P, Moody's, Fitch, Dominion, A.M. Best, Morningstar, Egan Jones and Kroll).

62 Annual Report on Form 10-K Horace Mann Educators Corporation

As of December 31, 2022, our diversified fixed maturity securities portfolio consisted of 3,724 investment positions, issued by 2,421 entities, and totaled approximately $5.2 billion in fair value. This portfolio was 92.0% investment grade, based on fair value, with an average credit quality rating of A+. Our investment guidelines target single corporate issuer concentrations to 0.5% of invested assets for AA or AAA 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. As of December 31, 2022, 91.6% of these combined portfolios were investment grade, based on fair value, with an overall average credit 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) December 31, 2022

Percentof TotalFairValue FairValue AmortizedCost, net

Fixed maturity securities

CCC or lower — 1.5 1.6

Equity securities

AAA — —

AA — —

A — —

B — —

CCC or lower — —

Total equity securities 100.0 % $ 99.6

(1)Ratings are as assigned by a NRSRO when available. If no rating is available from a NRSO, then an internally developed rating is used. Ratings for publicly traded securities are determined when the securities are acquired and are updated monthly to reflect any changes in ratings.

(2)As of December 31, 2022, the AA rated fair value amount included $342.6 million of U.S. Government and federally sponsored agency securities and $561.0 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 a NRSO.

As of December 31, 2022, the fixed maturity securities portfolio had $606.9 million of pretax gross unrealized investment losses on $4,267.9 million of fair value related to 3,102 positions. Of the investment positions with gross unrealized investment losses, there were 547 securities trading below 80.0% of the carrying amount as of December 31, 2022. See Part II - Item 8, Note 3 of the Consolidated Financial Statements in this Annual Report on Form 10-K for more information.

There has been a significant increase in interest rates since December 31, 2021, driven mostly by increases in U.S. Treasury rates, though credit spreads also widened. The 10-year U.S. Treasury yield increased 236 basis points for the year ended December 31, 2022, rising from 1.51% as of December 31, 2021 to 3.87% as of December 31, 2022. Additionally, credit spreads widened during the same time period, with investment grade

Horace Mann Educators Corporation Annual Report on Form 10-K 63

and high yield wider by 40 and 171 basis points, respectively. These upward movements in rates caused market yields in our investment portfolios to rise sharply, with downward pressure on prices. Investment grade and high yield total returns for the year ended December 31, 2022 were down 15.4% and 11.2%, respectively. The Bloomberg Barclays Index Yield-to-Worst for Investment Grade rose 3.1% for the year ended December 31, 2022, ending at 5.4%, while the High Yield Index rose 4.8% to 9.0%. The Company's portfolios generated sizable unrealized investment losses as a result of sharp increases in interest rates.

We view the pretax gross unrealized investment losses of all our fixed maturity securities as of December 31, 2022 as temporary. Future changes in circumstances related to these and other securities could require subsequent recognition of impairment.

Liquidity and Capital Resources

Our liquidity and access to capital were not materially impacted by inflation or changes in interest rates during the year ended December 31, 2022. For further discussion regarding the potential future impacts of inflation and changes in interest rates, see Part I – Item 1A - Risk Factors and Part II – Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations - Effects of Inflation and Changes in Interest Rates of this Annual Report on Form 10-K.

Investments

Information regarding our investment portfolio, which is comprised primarily of investment grade, fixed maturity securities, is presented in Part II - Item 7, Results of Operations by Segment, Part I - Item 1, Investments and in Part II - Item 8, Note 3 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

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 and acquisitions, 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

Net cash provided by operating activities $ 171.5 $ 204.9 -16.3 %

Net cash used in investing activities (214.6) (302.0) -28.9 %

Net cash provided by (used in) financing activities (47.8) 208.5 -122.9 %

Net increase (decrease) in cash (90.9) 111.4 N.M.

Cash at beginning of year 133.7 22.3 N.M.

Operating Activities

As a holding company, we conduct our principal operations in the personal lines portion 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 2022, net cash provided by operating activities decreased $33.4 million, primarily due to higher claims paid on insurance policies and lower 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

64 Annual Report on Form 10-K Horace Mann Educators Corporation

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.

Investing activities includes our acquisition of Madison National in 2022.

Financing Activities

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

For 2022, net cash provided by financing activities decreased $256.3 million, primarily due to a $182.0 million net decrease in cash inflows from advances received under FHLB funding agreements and a $114.0 million net increase in principal borrowings on the Revolving Credit Facility in 2021 due to the acquisition of Madison National as well as an increase in cash outflows of $18.7 million related to the acquisition of treasury stock partially offset by a net increase in cash inflows of $70.2 million from reverse repurchase agreements in 2022.

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

Principal repayment on FHLB funding agreements (149.0) (362.0) 213.0 -58.8 %

Horace Mann Educators Corporation Annual Report on Form 10-K 65

Liquidity Sources and Uses

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

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 ☑ ☑ ☑ ☑

Proceeds from sales of investments ☑ ☑ ☑ ☑

Proceeds from FHLB borrowing and funding agreements ☑ ☑ ☑

Proceeds from reverse repurchase agreements ☑ ☑ ☑

Intercompany loans ☑ ☑ ☑ ☑

Capital contributions from parent ☑ ☑ ☑

Dividends or return of capital from subsidiaries ☑

Tax refunds/settlements ☑ ☑ ☑ ☑

Proceeds from periodic issuance of additional securities ☑

Proceeds from debt issuances ☑

Proceeds from revolving credit facility ☑

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 ☑ ☑ ☑

Payment of operating costs and expenses ☑ ☑ ☑ ☑

Payments to purchase investments ☑ ☑ ☑ ☑

Repayment of FHLB borrowing and funding agreements ☑ ☑ ☑

Repayment of reverse repurchase 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 repayments ☑

Repayment on revolving credit facility ☑

Payments related to employee benefit plans ☑

Payments for business acquisitions ☑

66 Annual Report on Form 10-K Horace Mann Educators Corporation

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.

As of December 31, 2022, we held $0.9 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 which is needed to adequately fund and support business growth, primarily based on risk-based capital formulas including those developed by the NAIC. 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 service and retire debt, pay dividends to our shareholders, fund growth initiatives, 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, which include our Revolving Credit Facility, as well as issuances of various securities. The insurance subsidiaries are subject to various regulatory restrictions which 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 2023 from all of our insurance subsidiaries without prior regulatory approval is approximately $110.3 million, excluding the impact and timing of prior year dividends, of which $179.9 million was paid during the year ended December 31, 2022. 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 14 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

Total capital was $1,586.2 million as of December 31, 2022, including $498.0 million of short-term and long-term debt. Total debt represented 31.4% of total capital including net unrealized investment losses on fixed maturity securities (25.6% of total capital excluding net unrealized investment losses on fixed maturity securities*) as of December 31, 2022, which was slightly above our long-term target of 25.0%.

Shareholders' equity was $1,088.2 million as of December 31, 2022, including net unrealized investment losses on fixed maturity securities of $356.9 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 $1,528.6 million and $37.37, respectively, at December 31, 2022. Book value per share was $26.60 as of December 31, 2022 ($35.33 excluding net unrealized investment losses on fixed maturity securities*).

Additional information regarding net unrealized investment gains (losses) on fixed maturity securities as of December 31, 2022 is included in Part II - Item 7, Results of Operations by Segment and Part II - Item 8, Note 3 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

Total shareholder dividends paid were $52.6 million for the year ended December 31, 2022. In 2022, the Board declared regular quarterly dividends of $0.32 per share. Compared to the full year per share dividends paid in 2021 of $1.24, the total 2022 dividends paid per share of $1.28 represented an increase of 3.2%.

On May 25, 2022, our Board of Directors authorized a share repurchase program allowing repurchases of up to $50 million (i.e., the 2022 Program) to begin following the completion of the $50 million repurchase plan that was authorized on September 30, 2015 (i.e., the 2015 Program). Both Programs authorize the repurchase of our common shares in open market or privately negotiated transactions, from time to time, depending on market conditions. The Programs do not have expiration dates and may be limited or terminated at any time without notice. During the third quarter of 2022, the 2015 Program was completed and we began repurchasing shares

Horace Mann Educators Corporation Annual Report on Form 10-K 67

under the 2022 Program. During 2022, we repurchased 670,816 shares of our common stock at an average price per share of $35.82 under the Programs. In total and through December 31, 2022, 1,711,042 shares have been repurchased under the 2015 and 2022 Programs at an average price of $34.31 per share. The repurchase of shares was funded through use of cash. As of December 31, 2022, $41.3 million remained authorized for future share repurchases under the 2022 Program.

The following table summarizes our debt obligations.

($ in millions) InterestRates FinalMaturity December 31,

Short-term debt

Long-term debt(1)

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

As of December 31, 2021, we had outstanding $250.0 million aggregate principal amount of 4.50% Senior Notes (Senior Notes), which 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 Part II - Item 8, Note 10 of the Consolidated Financial Statements in this Annual Report on Form 10-K. The Senior Notes are traded in the open market (HMN 4.50).

As of December 31, 2022, we had no 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. The $5.0 million FHLB borrowings that was outstanding as of December 31, 2021 is reported as Long-term debt in the Consolidated Balance Sheet.

Effective July 12, 2021, we, as borrower, amended our Credit Agreement (Revolving Credit Facility). The amended Revolving Credit Facility increased the amount available 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 amended Revolving Credit Facility, 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. Terms and conditions of the amended Revolving Credit Facility are substantially consistent with the prior agreement, with an interest rate based on LIBOR plus 115 basis points. The amended Revolving Credit Facility expires on July 12, 2026.

On December 31, 2021, we utilized $114.0 million of the Revolving Credit Facility to fund a portion of the acquisition of Madison National that occurred effective January 1, 2022, resulting in a remaining capacity of $76.0 million. We expect that the unused portion of the Revolving Credit Facility will be available for ongoing working capital, capital expenditures and general corporate expenditures. The unused portion of the Revolving Credit Facility is subject to a variable commitment fee, which was 0.15% on an annual basis as of December 31, 2022.

Beginning in the second quarter of 2022, we entered into reverse repurchase agreements to sell securities for cash. Such reverse repurchase agreements are primarily used as a financing tool for general corporate purposes and may be used as a tool to enhance yield on the investment portfolio. In connection with reverse repurchase agreements, we transfer primarily U.S. government, government agency and corporate securities and receive cash in an amount equal to at least 95% of the fair value of the securities transferred, and the agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary. The securities transferred under reverse repurchase agreements are included in Fixed maturity securities with the obligation to repurchase those securities reported in Other liabilities in our Consolidated Balance Sheets. The fair value of the securities transferred was $73.9 million as of December 31, 2022 and $0 as of December 31, 2021.

68 Annual Report on Form 10-K Horace Mann Educators Corporation

The obligation for securities sold under reverse repurchase agreements was a net amount of $70.2 million as of December 31, 2022 and $0 as of December 31, 2021.

To provide additional capital management flexibility, we filed a "universal shelf" registration statement on Form S-3 with the 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 Annual Report on Form 10-K.

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 remains effective indefinitely. No securities associated with the registration statement have been issued at the time of issuance of this Annual Report on Form 10-K.

Financial Ratings

Our principal insurance subsidiaries are rated by A.M. Best Company, Inc. (A.M. 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.

All four agencies currently have assigned the same insurance financial strength ratings to our Property & Casualty and Life insurance subsidiaries. Only A.M. Best currently rates our Supplemental & Group Benefits subsidiaries. A.M. Best currently rates our NTA Life subsidiary at the same level as our Property & Casualty and Life & Retirement subsidiaries A (Excellent), and our Madison National subsidiary is rated A- (Excellent). Assigned ratings and respective affirmation/review dates as of February 17, 2023 were as follows:

Insurance Financial Affirmed/

Strength Ratings (Outlook) Debt Ratings (Outlook) Reviewed

A.M. Best

HMEC (parent company) N.A. bbb (stable) 7/28/2022

HMEC's Life & Retirement subsidiaries A (stable) N.A. 7/28/2022

HMEC's Property & Casualty subsidiaries A (stable) N.A. 7/28/2022

HMEC's Supplemental & Group Benefits subsidiaries

Madison National Life Insurance Company A- (stable) N.A. 7/28/2022

National Teachers Associates Life Insurance Company A (stable) N.A. 7/28/2022

Moody's

HMEC (parent company) Baa2 (stable) 8/3/2022

HMEC's P&C Group A2 (stable) 8/3/2022

S&P A (stable) BBB (stable) 2/7/2023

Reinsurance Programs

Information regarding the reinsurance programs for our Property & Casualty, Life & Retirement and Supplemental & Group Benefits segments is located in Part I - Item 1, Reporting Segments of this Annual Report on Form 10-K.

Future Adoption of New Accounting Standards

We have not yet adopted ASU 2018-12, Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts because the adoption date has not occurred. For a discussion of

Horace Mann Educators Corporation Annual Report on Form 10-K 69

this new accounting standard, see Part II - Item 8, Note 1 of the Consolidated Financial Statements in this Annual Report on Form 10-K. The effect of implementing certain accounting standards on our financial results and financial condition is often based in part on market conditions at the time of implementation of the standard and other factors that we are unable to determine prior to implementation. For this reason, we are sometimes unable to estimate the effect of certain pending accounting standards until the relevant authoritative body finalizes these standards or until we implement them.

Effects of Inflation and Changes in Interest Rates

Our operating results are affected significantly in at least three ways by changes in interest rates and inflation and the recent elevated inflation levels we are experiencing are likely to persist for some time. First, inflation directly affects Property & Casualty claims costs. Second, the investment income earned on our investment portfolio and the fair value of the investment portfolio are related to the yields available in the fixed income markets. An increase in interest rates will decrease the fair value of the investment portfolio, but will increase investment income as investments mature and proceeds are reinvested at higher rates. Third, as interest rates increase, competitors will typically increase crediting rates on annuity contracts and life insurance products with account values, and may lower premium rates on property and casualty lines to reflect the higher yields available in the market. The risk of inflation on Property & Casualty claim costs is managed through pricing and rate. The risk of interest rate fluctuation is managed through asset/liability management techniques, including cash flow analysis. In addition, an annuity reinsurance agreement we entered which reinsures a $2.5 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.

ITEM 7A. 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 Part II - Item 7, Results of Operations by Segment of this Annual Report on Form 10-K regarding net investment gains (losses).

Significant changes in interest rates expose us to the risk of experiencing losses or earning a reduced level of investment income based on the difference between the interest rates earned on our investments and the credited interest rates on our insurance liabilities. Also, see Part II - Item 7, Results of Operations by Segment of this Annual Report on Form 10-K 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 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 our contractholders, and not by us. Certain fees that we earn from variable annuity deposits are based on the market value of the funds deposited.

Through active investment management, we invest available funds with the objective of funding future obligations to policyholders, subject to appropriate risk considerations, and maximizing shareholder value. This objective is met through investments that (1) have similar characteristics to the liabilities they support, (2) are diversified among industries, issuers and geographic locations, and (3) are predominantly investment-grade fixed maturity securities classified as available for sale. As of the time of issuance of this Annual Report on Form 10-K, derivatives are only used to manage the interest crediting rate risk within our FIA and IUL products. As of December 31, 2022, approximately 10.6% of the fixed maturity securities portfolio supported Property & Casualty, 76.4% supported Life & Retirement, and 13.0% supported Supplemental & Group Benefits. For discussions regarding our investments see Part II - Item 7, Results of Operations by Segment of this report regarding net investment gains (losses) and Part I - Item 1, Investments of this Annual Report on Form 10-K.

70 Annual Report on Form 10-K Horace Mann Educators Corporation

Our Life & Retirement earnings are affected by the spreads between investment yields and rates credited or accruing on fixed annuity and life insurance liabilities with account values. Although credited rates on fixed annuities may be changed annually (subject to minimum guaranteed rates), competitive pricing and other factors, including the impact on the level of surrenders and withdrawals, may limit our ability to adjust or maintain crediting rates at levels necessary to avoid narrowing of spreads under certain market conditions. However, because of the annuity reinsurance transaction, the spread in our retained annuity business is achieving our targeted returns and new business is priced to do so as well. Also, see Part II - Item 7, Results of Operations by Segment of this Annual Report on Form 10-K regarding interest credited to policyholders.

Using financial modeling and other techniques, we regularly evaluate the appropriateness of investments relative to the characteristics of the liabilities that they support. Simulations of cash flows generated from existing business under various interest rate scenarios measure the potential gain or loss in fair value of interest rate sensitive assets and liabilities. Such estimates are used to closely match the duration of assets to the duration of liabilities. The overall duration of liabilities of our multiline insurance operations combines the characteristics of our long duration annuity and interest rate sensitive life liabilities with our short duration non-interest rate sensitive Property & Casualty liabilities. Overall, as of December 31, 2022, the duration of the fixed maturity securities portfolio was estimated to be approximately 6.4 years and the duration of our insurance liabilities and debt was estimated to be approximately 6.5 years.

Life & Retirement operations participate in the cash flow testing procedures imposed by statutory insurance regulations, the purpose of which is to ensure that such liabilities are adequate to meet our obligations under a variety of interest rate scenarios. Based on these procedures, our assets and the investment income expected to be received on such assets are adequate to meet the insurance policy obligations and expenses of our insurance activities in all but the most extreme circumstances.

We periodically evaluate our sensitivity to interest rate risk. Based on commonly used models, we project the impact of interest rate changes, assuming a wide range of factors, including duration and prepayment, on the fair value of assets and liabilities. Fair value is estimated based on the net present value of cash flows or duration estimates. Based on the most recent study, assuming an immediate decrease of 100 basis points in interest rates, the fair value of our assets and liabilities would both increase, the net of which would result in a increase in shareholders' equity of approximately $41.9 million after tax, or 2.2%. Assuming an immediate increase of 100 basis points in interest rates, the fair value of our assets and liabilities would both decrease, the net of which would result in a decrease in shareholders' equity of approximately $94.0 million after tax, or 5.0%. In each case, these changes in interest rates assume a parallel shift in the yield curve. While we believe that these assumed market rate changes are reasonably possible, actual results may differ, particularly as a result of any actions that we would take to attempt to mitigate such hypothetical losses in fair value of shareholders' equity.

Interest rates rose swiftly throughout 2022. However, the risk of a deep recession or shock to the economy, such as a global pandemic, could result in a return to historically low interest rates. The current environment of higher interest rates have afforded us the opportunity to invest insurance cash flows and reinvested cash flows at higher yields, which could be a benefit to net investment income, but the higher interest rates have caused an increase to both realized investment losses when existing securities are sold, and to net unrealized investment losses in the remaining portfolios.

As a general guideline, we estimate that pretax net income in 2023 and 2024 would decrease by approximately $7.6 million for each 100 basis point decline in reinvestment rates, before assuming any reduction in annuity crediting rates on in force contracts. In addition, declining interest rates also could negatively impact the recoverability of goodwill and certain intangible assets, due to the impacts on the estimated fair value of our reporting units.

We have been and continue to be proactive in our investment strategies, product designs and crediting rate strategies to mitigate the risk of unfavorable consequences in this type of interest rate environment without venturing into asset classes or individual securities that would be inconsistent with our investment guidelines. Lowering interest crediting rates on annuity contracts and cap and participation rates on fixed indexed annuity contracts can help offset decreases in investment margins on some products. Our ability to lower interest crediting rates could be limited by competition, regulatory approval or contractual guarantees of minimum rates and may not match the timing or magnitude of changes in investment yields.

Based on our overall exposure to interest rate risk, we believe that these changes in interest rates would not materially affect our consolidated near-term financial position, results of operations or cash flows.

Horace Mann Educators Corporation Annual Report on Form 10-K 71

ITEM 8. I Financial Statements and Supplementary Data

HORACE MANN EDUCATORS CORPORATION

INDEX TO FINANCIAL INFORMATION

Page

Consolidated Balance Sheets 76

Consolidated Statements of Operations and Comprehensive Income (Loss) 77

Consolidated Statements of Changes in Shareholders' Equity 78

Consolidated Statements of Cash Flows 79

Notes to Consolidated Financial Statements 80

Note 1 - Basis of Presentation and Significant Accounting Policies 80

Note 2 - Acquisitions 94

Note 3 - Investments 95

Note 4 - Fair Value of Financial Instruments 102

Note 5 - Derivatives 110

Note 6 - Deposit Asset on Reinsurance 112

Note 7 - Goodwill and Intangible Assets 112

Note 8 - Unpaid Claims and Claim Expense Reserves 115

Note 9 - Reinsurance and Catastrophes 126

Note 11 - Income Taxes 129

Note 12 - Operating Leases 132

Note 13 - Shareholders' Equity and Share-Based Compensation 133

Note 14 - Statutory Information and Dividend Restrictions 136

Note 15 - Retirement Plans and Other Postretirement Benefits 136

Note 16 - Contingencies and Commitments 141

Note 18 - Supplemental Consolidated Cash and Cash Flow Information 144

Note 19 - Segment Information 144

72 Annual Report on Form 10-K Horace Mann Educators Corporation

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Horace Mann Educators Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Horace Mann Educators Corporation and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes and financial statement schedules I to IV (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Horace Mann Educators Corporation Annual Report on Form 10-K 73

Fair value for hard-to-value fixed maturity securities

As discussed in Note 4 to the consolidated financial statements, as of December 31, 2022, the Company has recorded an estimated fair value for fixed maturity securities, of which a portion represents securities that are hard-to-value, which are primarily securities that use Level 3 (unobservable) inputs. The Company estimates the fair value of hard-to-value fixed maturity securities, which includes securities that do not have observable market-based inputs or prices or that trade in markets that are less liquid. The Company uses judgment to determine the appropriate inputs and assumptions used to estimate the fair value of these hard-to-value securities. As of December 31, 2022, the estimated fair value of fixed maturity securities was $5,185.0 million.

We identified the assessment of the Company’s estimate of the fair value of hard-to-value fixed maturity securities as a critical audit matter. Significant measurement uncertainty associated with the fair value of such securities existed because the markets for the hard-to-value securities are less liquid and there is a lack of observable marked-based inputs. As such, there was a high degree of subjectivity and judgment in evaluating the fair value and, specifically, the benchmark yield used in the valuation. Additionally, evaluation of the benchmark yield used in the estimation of fair value required specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter. We, with involvement of valuation professionals with specialized skills and knowledge, evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to measure fair value of hard-to-value securities. This included controls related to the Company’s selection of pricing assumptions, including the benchmark yield used to value hard-to-value fixed maturity securities. We involved valuation professionals with specialized skills and knowledge, who assisted in:

•developing an independent range of fair value estimates using information from the Company, market data sources, models, and key assumptions derived by the valuation professional for a selection of securities.

•comparing the Company’s fair value estimates of hard-to-value securities to our independent range of fair value estimates for the same selection of securities.

Valuation of the liability for property and casualty unpaid claims and claim expense reserves

As discussed in Notes 1 and 8 of the consolidated financial statements, the Company employs actuarial techniques to estimate the liability for property and casualty unpaid claims and claim expense reserves (reserves). The Company develops reserves based on the application of actuarial methods and best estimate assumptions to historical claim experience. The reserves are continually updated by the Company as experience develops and new information becomes known. The Company recorded an estimated liability of $287.9 million for property and casualty unpaid claims and claim expense reserves as of December 31, 2022.

We identified the assessment of the estimate of reserves as a critical audit matter because it involved estimation uncertainty. Complex auditor judgment and specialized skills and knowledge were required in evaluating the selected methods and certain assumptions used to develop the estimate of reserves for certain lines of business representing higher estimation uncertainty, including the selection of development factors and changes in claim frequency and severity trends. Additionally, subjective auditor judgment was required to assess the selected assumptions as there exists a range of potential inputs and the assumptions are sensitive to variation, such that minor changes in the assumptions could affect the reserves recorded by the Company.

The following are the primary procedures we performed to address this critical audit matter. We, with involvement of actuarial professionals with specialized skills and knowledge, evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process for the development of the estimate of reserves. This included controls related to the methods and assumptions used for the Company’s best estimate. We also involved actuarial professionals with specialized skills and knowledge, who assisted in:

•evaluating the Company’s reserving methods, procedures, key assumptions, and judgments by comparing to generally accepted actuarial standards.

•developing an independent range of reserves for certain lines of business that were determined to represent higher estimation uncertainty based on actuarial methodologies and assumptions in order to evaluate the Company’s consolidated reserves.

74 Annual Report on Form 10-K Horace Mann Educators Corporation

•assessing movement of the Company’s recorded reserves within the range of independent reserves for certain lines of business.

•examining the Company's methods, certain assumptions, and results of their internal actuarial analyses for certain lines of business that were determined to represent higher estimation uncertainty in order to evaluate the Company's consolidated reserves.

Fair value of customer relationships acquired in the Madison National business combination

As discussed in Notes 2 and 7 to the consolidated financial statements, the Company acquired Madison National Life Insurance Company, Inc. (Madison National) in a business combination. As a result of the transaction, the Company acquired the assets and assumed the liabilities of Madison National. The Company uses judgment to determine the appropriate assumptions used to estimate the fair value of customer relationships acquired. The acquisition-date fair value of the customer relationships acquired was valued based on the actuarial appraisal method and was included in total intangible assets acquired of $59.4 million.

We identified the assessment of the fair value of customer relationships acquired in the Madison National business combination as a critical audit matter. There was a high degree of subjective auditor judgment in evaluating certain assumptions used to estimate the fair value of customer relationships acquired, including specialized skills and knowledge in the evaluation of the selection of the discount rate assumption used to estimate the acquisition-date fair value of acquired customer relationships. Changes in the discount rate assumption could affect the fair value of the customer relationships acquired balance recorded by the Company. Specialized skills and knowledge were required to assess the selection of the discount rate assumption used to estimate fair value.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls, with the involvement of actuarial and valuation professionals, when appropriate, over the Company’s process to select the discount rate assumption.

We involved actuarial professionals with specialized skills and knowledge to assist in assessing the discount rate assumption used by the Company by comparing to other insurance acquisitions for similar businesses.

We involved valuation professionals with specialized skills and knowledge to assist in assessing the discount rate assumption used by the Company by comparing to publicly available market data for comparable entities.

/s/ KPMG LLP

KPMG LLP

We have served as the Company’s auditor since 1989.

Chicago, Illinois

February 28, 2023

Horace Mann Educators Corporation Annual Report on Form 10-K 75

HORACE MANN EDUCATORS CORPORATION

CONSOLIDATED BALANCE SHEETS

($ in millions, except share data)

December 31,

Assets

Investments

Equity securities at fair value 99.6 147.2

Limited partnership interests 983.7 712.8

Short-term and other investments 319.3 350.2

Deferred policy acquisition costs 433.1 248.0

Reinsurance balances receivable 506.2 153.2

Separate Account variable annuity assets 2,792.3 3,441.0

Liabilities and Shareholders' Equity

Policy liabilities

Investment contract and policy reserves $ 6,968.0 $ 6,577.8

Unpaid claims and claim expense reserves 585.1 425.9

Separate Account variable annuity liabilities 2,792.3 3,441.0

Preferred stock, $0.001 par value, authorized1,000,000 shares; none issued — —

Accumulated other comprehensive income (loss), net of tax:

Net funded status of benefit plans (8.8) (10.2)

Total liabilities and shareholders' equity $ 13,446.8 $ 14,383.9

The accompanying Notes are an integral part of these Consolidated Financial Statements.

76 Annual Report on Form 10-K Horace Mann Educators Corporation

HORACE MANN EDUCATORS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

($ in millions, except per share data)

Year Ended December 31,

Statements of Operations

Revenues

Net premiums and contract charges earned $ 1,029.0 $ 889.6 $ 930.7

Net investment losses (56.5) (11.0) (2.3)

Benefits, losses and expenses

DAC unlocking and amortization expense 98.7 94.7 99.9

Intangible asset amortization expense 16.8 13.0 14.4

Other expense - goodwill and intangible asset impairments 4.8 — 10.0

Income tax expense (benefit) (9.3) 32.1 26.3

Net income (loss) per share

Weighted average number of shares and equivalent shares

Statements of Comprehensive Income (Loss)

Other comprehensive income (loss), net of tax:

Change in net funded status of benefit plans 1.4 1.0 (0.4)

The accompanying Notes are an integral part of these Consolidated Financial Statements.