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 2023 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 40

Consolidated Financial Highlights 41

Consolidated Results of Operations 42

Application of Critical Accounting Estimates 45

Results of Operations by Segment 50

Property & Casualty 50

Life & Retirement 53

Supplemental & Group Benefits 56

Corporate & Other 57

Investment Results 57

Liquidity and Capital Resources 60

Future Adoption of New Accounting Standards 66

Effects of Inflation and Changes in Interest Rates 66

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, 2023 compared to the year ended December 31, 2022. For a discussion of the results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, 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, 2022, which was filed with the Securities and Exchange Commission (SEC) on February 28, 2023.

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, variable and fixed indexed annuities

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

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

•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, as well as other markets of those who serve the community.

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. 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 17 of the Consolidated Financial Statements in this Annual Report on Form 10-K for more information.

Effective January 1, 2023, the Company adopted ASU 2018-12, Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts on a modified retrospective basis. Prior year balances were recast in this Annual Report on Form 10-K to conform to ASU 2018-12 effective January 1, 2021. See Part II - Item 8, Note 1, Note 6, and Note 18 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 (0.45) (1.07) N.M.

Net income return on equity - last twelve months 4.0 % 1.6 % 2.4 pts

For 2023, net income increased $25.2 million compared the prior year primarily due to lower net investment losses and higher net investment income partially offset by higher interest credited, higher DAC amortization and a higher effective tax rate.

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

Consolidated Results of Operations

Net premiums and contract charges earned $ 1,057.1 $ 1,027.7 2.9 %

Net investment losses (24.0) (56.5) N.M.

Benefits, claims and settlement expenses 769.1 747.0 3.0 %

DAC unlocking and amortization expense 101.2 88.2 14.7 %

Intangible asset amortization expense 14.8 16.8 -11.9 %

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

Income (loss) before income taxes 53.3 16.5 N.M.

Income tax expense (benefit) 8.3 (3.3) N.M.

Net Premiums and Contract Charges Earned

For 2023, net premiums and contract charges earned increased $29.4 million as the Property & Casualty segment continues to implement rate and inflation adjustments to coverage values continue to take effect.

Net Investment Income

Total net investment income in 2023 increased $43.9 million, primarily due to higher returns on floating rate fixed maturity securities including commercial mortgage loan funds partially offset by lower returns on limited partnership interests in various equity funds. The annualized investment yield on the portfolio excluding limited partnership interests* was as follows:

Year Ended December 31,

During 2023, 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 intended allocation to this portion of our portfolio to increase yields while balancing protection and risk.

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

Net Investment Losses

For 2023, net investment losses decreased $32.5 million. The breakdown of net investment gains (losses) by transaction type were as follows:

($ in millions) Year Ended December 31,

Credit loss and intent-to-sell impairments $ (7.1) $ (10.7)

Sales and other, net (25.0) (17.8)

Change in fair value - equity securities 7.9 (33.2)

Change in fair value and losses realized on settlements - derivatives 0.2 5.2

Net investment losses $ (24.0) $ (56.5)

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 2023, other income increased $4.5 million primarily due to an indemnification agreement associated with the employer-sponsored business line.

Benefits, Claims and Settlement Expenses

For 2023, benefits, claims and settlement expenses increased 3% as higher catastrophe losses and non-catastrophe weather losses in the current year offset unfavorable prior year development recorded in 2022 in the Property & Casualty segment.

Interest Credited

For 2023, interest credited increased $32.3 million, driven primarily by higher interest rates on advances received from the Federal Home Loan Bank of Chicago (FHLB). The net dollar contribution from FHLB advances remained stable year over year as the higher interest credited rates are offset by higher earnings from the floating rate securities backing the program, although the net interest spread percentage declined slightly.

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 2.9% for 2023 and 2.5% for 2022.

Operating Expenses

For 2023, operating expenses increased $2.6 million as the impacts of inflation were partially offset by reduced expenses on a run-off block.

DAC Unlocking and Amortization Expense

For 2023, DAC unlocking and amortization expense increased $13.0 million, due to premium increases in the Property & Casualty segment driving higher DAC asset levels as well as write-offs of DAC in the Life & Retirement segment related to declines in annuity persistency.

Intangible Asset Amortization Expense

For 2023, intangible asset amortization expense decreased $2.0 million.

Interest Expense

For 2023, interest expense increased $10.3 million, primarily due to an increase in floating interest rates on the Revolving Credit Facility in the first nine months of the year and interest expense on the 2023 Senior Notes issued in September 2023.

Other Expense - Goodwill and Intangible Asset Impairments

The prior year had other expense representing 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 -

Horace Mann Educators Corporation Annual Report on Form 10-K 43

Item 8, Note 9 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, including net investment gains (losses) was 15.6% and (20.0)% for the years ended December 31, 2023 and 2022, respectively. Income from investments in tax-advantaged securities decreased the effective income tax rates by 7.5 and 39.2 percentage points for 2023 and 2022, respectively. The goodwill and intangible asset impairment charges in the Life & Retirement segment decreased the effective income tax rate by 9.3 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 is not an applicable corporation in 2023. In making such determination, the group has relied upon guidance issued by the U.S Treasury Department during 2023.

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.

As of December 31, 2023, our federal income tax returns for years prior to 2020 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 2024

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

Consolidated Results

At the time of issuance of this Annual Report on Form 10-K, we estimate that 2024 full year net income will be within a range of $3.00 to $3.30 per diluted share, generating a core return on equity* near 9%. These results anticipate the following:

•8% to 9% increase in Net premiums and contract charges earned driven by Property & Casualty rate actions

•Between $465 million and $475 million of Net investment income, including approximately $105 million of accreted investment income on the deposit asset on reinsurance in the Life & Retirement segment. This anticipates strong returns from our commercial mortgage loan portfolio as well as returns for our limited partnerships moving toward their historic averages

•Approximately 5.5% increase in total Operating expense

•Approximately $35 million in corporate Interest expense included in results for the Corporate & Other segment

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Property & Casualty Segment

In 2024, net income for Property & Casualty is anticipated to be in the range of $36 million to $41 million. Our outlook anticipates:

•Combined ratio near 100%

•Catastrophe loss assumption of approximately $80 million or around 11% of net earned premiums – in line with five-year average and consistent with historical frequencies and current severities applied to modeled exposures

We anticipate achieving our longer-term Property & Casualty combined ratio target of 95-96% in 2025.

Life & Retirement Segment

In 2024, net income for Life & Retirement is anticipated to be in the range of $77 million to $81 million. Our outlook anticipates:

•Spread on the fixed annuity business above the target range of 220 to 230 basis points

•Mortality modestly higher than 2023

Supplemental & Group Benefits Segment

In 2024, net income for Supplemental & Group Benefits is anticipated to be in the range of $47 million to $50 million. Our outlook anticipates:

•Claims utilization for supplemental and disability products returning to near pre-pandemic levels, leading to a segment benefit ratio closer to longer-term target of 43%

•Pretax profit on revenue of between 20% and 21%

As described in Critical Accounting Estimates, certain of our significant accounting measurements require the use of estimates and assumptions. As additional information becomes available, adjustments may be required. Those adjustments are charged or credited to net income for the period in which the adjustments are made and may impact actual results compared to our estimates above. Additionally, see forward-looking information in Part I - Items 1 and 1A of this Annual Report on Form 10-K concerning other important factors that could impact actual results. Our projections due not include a forecast of net investment gains (losses), which can vary substantially from one period to another and may have a significant impact on net income.

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

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•Valuation of future policy benefit reserves

•Valuation of liabilities for property and casualty unpaid claims and claim expense reserves

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 price that would be received in an orderly transaction between market participants at the measurement date. We obtain prices from third-party valuation service providers, our investment managers, and custodian bank, each of which use a variety of valuation service providers, broker quotes, and modeled prices. When necessary, we also internally model securities to develop a price. Differences in prices between the sources that we consider reliable are researched and we use the price that we consider most representative of an exit price in determining the fair value. Typical inputs used by these pricing sources include, but are not limited to, reported trades, broker quotes, yield curves, and involve the benchmarking of similar securities, rating designations, sector groupings, issuer spreads and/or estimated cash flows, prepayment speeds and default rates, among others, in determining the inputs to the prices. 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 using observable inputs. Approximately 87.7% of the fixed maturity securities portfolio, based on fair value, was priced through valuation services or priced using observable inputs as of December 31, 2023.

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 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 at the measurement date. When the valuation service providers cannot provide prices, the investment managers obtain price quotes from brokers, which may be binding or non-binding price quotes. For those securities where the investment manager cannot obtain broker quotes, they will model the security, generally using cash flows discounted at the appropriate current market rate. Valuation service provides' 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 may include: benchmark yield, liquidity premium, prepayment speeds and default rates, spreads, weighted average life and credit rating. The cash flows are based on the contractual terms of the individual security and are adjusted for the inputs and assumptions as appropriate, and the cash flows are then discounted by the yield as determined by the assumptions. 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 or additional inputs may be necessary.

As part of determining the fair value of fixed maturity securities, including hard-to-value fixed maturity securities, we address the estimation uncertainty in the fair value estimates through our valuation processes. The uncertainty is caused by the availability and observability of the fair value, and more specifically the inputs to fair value, of individual securities. We assess whether individual prices have become stale, are using appropriate methodologies and assumptions, exceed certain acceptable thresholds as compared to previous prices and alternative pricing sources, and how those prices are developed and assessed when provided by valuation service providers. In addition, we may evaluate prices for individual securities by comparing the prices to broker prices or prices based on internal models.

Individual fixed maturity securities may have variability based on security specific inputs and characteristics, but overall our portfolio duration is approximately 6.0 years, meaning a 100 basis point increase in yield would result in a 6% decrease in the fair value of fixed maturity securities. As of December 31, 2023, Level 3 invested assets comprised 9.5% 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 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 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

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the consummation of a transaction with an unrelated third party or when a credit loss allowance transaction is recorded. We evaluate fixed maturity securities where fair value is below amortized cost on a quarterly basis to determine if a credit loss allowance is necessary. 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 where fair value is below amortized cost, 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 is written-off and the amortized cost basis of the security is written down to the fair value, with the 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 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 effective interest rate and are compared to the amortized cost basis of the security. The determination of whether we expect to received cash flow sufficient to recover the entire amortized cost basis of the security 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 for fixed-rate securities. We will then review the assumptions/methodologies for reasonableness. The information reviewed 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, and the value of underlying collateral. 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.

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. Subsequent changes in the anticipated recoveries, limited by the amount of previous taken credit allowances, are recorded through changes in the allowance for credit losses and recognized through net investment loss.

When a security is disposed or deemed uncollectible and written-off, we reverse amounts previously recognized in the credit loss allowance through net investment loss.

Valuation of Future Policy Benefit Reserves

The Company adopted ASU 2018-12 for Liabilities for future policy benefits (LFPB) on a modified retrospective basis such that those balances were adjusted to conform to ASU 2018-12 on January 1, 2021.

The LFPB represents the cost of claims, minus projected future net premiums, that we estimate we will eventually pay to our policyholders and the related expenses for our traditional and limited-payment long duration contracts. Liabilities for future policy benefits are initially established in the same period in which we issue a policy, and equal the difference between projected future policy benefits and projected future net premiums, allowing a margin for expenses and profit. The liabilities for future policy benefits build up and release over time, based on the emergence of cash flows, including premiums received and claims paid, and updated expectations for future cash flows.

Horace Mann Educators Corporation Annual Report on Form 10-K 47

The liabilities are estimated using assumptions that include discount rate, mortality, morbidity, lapses, and expenses. For traditional and limited-payment contracts, a standard discount rate is 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 is updated quarterly. 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.

The LFPB is sensitive to the discount rate. The potential effect of a decrease of 50 basis points in the discount rate as of December 31, 2023 would result in an increase to the liability for future policy benefits of approximately $100 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 of approximately $90 million.

Cash flow assumptions are reviewed and updated, as needed, at least annually. Mortality, morbidity, lapse, and expense assumptions used in cash flow modeling are based on judgments that consider our historical experience, industry data, and other factors. On a quarterly basis, cohort level cash flow measures are updated based on the emergence of actual experience. The updated cash flows, based on experience emergence and any assumption updates, are used to determine the updated net premiums, the portion of the gross premium required to provide for all benefits and expenses, excluding acquisition costs or any costs that are required to be charged to expense as incurred. The updated net premium ratio is used to calculate the updated liability for future policy benefits as of the beginning of the quarter, at the original discount rate. To the extent the present value of future benefits and expenses exceeds the present value of future gross premiums, an immediate charge is recognized in net income, such that net premiums are set equal to gross premiums. The potential impact of increasing (decreasing) our long-term mortality assumption by 5% is an increase (decrease) to the LFPB of approximately $8 million. The potential impact of increasing (decreasing) our long-term lapse assumption by 10% is a decrease (increase) to the LFPB of approximately $1 million. The potential impact of increasing (decreasing) our long-term morbidity assumption by 5% in an increase (decrease) to the LFPB of approximately $4 million.

See Part II – Item 8, Note 6 of the Consolidated Financial Statements in this Annual Report on Form 10-K for more information.

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 5 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

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 claim frequency for unpaid losses is a reasonably likely scenario based on recent experience and would result in a change in the estimated direct reserves of approximately $6.3 million for long-tail liability related exposures

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(auto liability coverages) and approximately $2.0 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, 2023, the impact of a reserve re-estimation resulting in a 1.0% increase in net reserves would be a decrease of approximately $2.5 million in net income. A reserve re-estimation resulting in a 1.0% decrease in net reserves would increase net income by approximately $2.5 million.

No prior years' reserve development was recorded in 2023. 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.

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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 section 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 17 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

2023 net loss reflected the following factors:

•Increases in average written premium per policy

•Higher net investment income on limited partnership portfolio

•Higher catastrophe losses

•No prior years' reserve development in the current year

•Continued elevated underlying auto and property loss ratios* due to non-catastrophe weather

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

($ in millions, unless otherwise indicated) Year Ended December 31, 2023-2022

Financial Data:

Net premiums written*:

Change in unearned net premiums (38.8) (9.3) N.M.

Incurred claims and claims expenses:

Claims occurring in the current year 557.0 512.3 8.7 %

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

Total claims and claim expenses incurred 557.0 534.3 4.2 %

Operating expenses, including DAC amortization 174.6 166.9 4.6 %

Underwriting gain (loss) (86.0) (93.0) 7.5 %

Income (loss) before income taxes (45.3) (58.2) 22.2 %

Operating Statistics:

Auto

Loss and loss adjustment expense ratio 84.4 % 91.8 % -7.4 pts

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

Catastrophe losses 2.7 % 1.8 % 0.9 pts

Underlying combined ratio* 109.0 % 110.0 % -1.0 pts

Property

Loss and loss adjustment expense ratio 89.5 % 80.7 % 8.8 pts

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

Underlying combined ratio* 78.8 % 78.2 % 0.6 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 51

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.

Including a profit of $8.8 million in the fourth quarter, the Property & Casualty segment’s net loss for the full year 2023 reflected elevated catastrophe and non-catastrophe weather activity for much of the year. Property & Casualty net premiums written were up 10.8% for the year and segment net investment income was up 20.7% for the year.

On a reported basis, the 7.3 point decrease in the auto combined ratio in 2023 was mainly attributable to a 1.1 point decrease in the auto underlying loss ratio* and an 7.2 point decrease in prior years' reserve development. Unfavorable prior years' auto reserve development of $28.0 million was reported in 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 7.3 points in 2023, partially driven by catastrophe and non-catastrophe weather activity. In addition, favorable prior years' reserve development of $6.0 million benefited the prior year reported property combined ratio by 2.8 points.

In 2023, total Property & Casualty net premiums written* increased $66.9 million as rate actions and inflation adjustments to coverage values for property more that offset declines in risks in force. Retention remains strong.

In 2023, auto net premiums written* increased $45.1 million, primarily due to rate actions partially offset by the continuing decline in auto risks in force. For 2023, average auto net premium written and average net premium earned increased 13.1% and 8.2%, respectively. Property and other net premiums written* increased $21.8 million due to increases in average net premium written and average net premium earned which increased 11.5% and 9.9% respectively, as rate actions and inflation adjustments to coverage values continue to take effect. The number of educator risks has been at or above 80% relative to overall 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.

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

Life & Retirement

2023 net income reflected the following factors:

•9.3% increase in net investment income due to higher returns on floating rate securities

•Decline of 28 basis points in the annualized net interest spread due to lower returns on the limited partnership fund investments and lower spread on the FHLB funding agreements year over year

•Higher DAC amortization due to write-offs related to declines in annuity persistency

•Flat mortality costs

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

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

Life & Retirement

Net premiums written and contract deposits* $ 573.3 $ 544.8 5.2 %

Net premiums and contract charges earned 151.7 144.0 5.3 %

Intangible asset amortization expense 0.2 1.1 -81.8 %

Life policies in force (in thousands) 162 162 — %

Life persistency - LTM 95.7 % 96.0 % -0.3 pts

Annuity contracts in force (in thousands) 223 228 -2.2 %

Horace Mann Retirement Advantage® contracts in force (in thousands) 19 17 11.8 %

Cash value persistency - LTM 91.5 % 93.7 % -2.3 %

The Life & Retirement segment net income rose 12.1% in 2023 reflecting higher net investment income. Net investment income rose 9.3% for the full-year as higher returns on floating rate securities more than offset lower returns from limited partnerships. The annualized net interest spread in our fixed annuity business was 218 basis points for the full year compared to 246 basis points in 2022, largely due to lower limited partnership returns as well as higher FHLB borrowing costs as credit spreads tightened year over year. The net dollar contribution from our FHLB funding agreements remained stable compared with 2022, with FHLB interest expense reflected in interest credited. In addition, 2022 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 2023, net annuity contract deposits* for variable and fixed annuities increased 6.2% for the year to $455.9 million. Educators continue to begin their relationship with Horace Mann through 403(b) retirement savings products, including the company’s attractive annuity products, which provide encouraging cross-sell opportunities. Cash value persistency remained strong at 91.5%.

Life annualized sales were $9.3 million for the year. Life insurance in force rose to $20.5 billion at year-end.

Horace Mann currently has $5.2 billion in annuity assets under management, including $2.2 billion of fixed annuities, $2.6 billion of variable annuities and $0.4 billion of fixed indexed annuities. Assets under administration, which includes Horace Mann Retirement Advantage® and other advisory and recordkeeping assets, were up 7.0%, benefiting from the strong equity markets.

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

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 $494.2 million of the Life & Retirement investment portfolio and related investable cash flows will be reinvested at current market rates.

Interest rates remained high throughout 2023. 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 new insurance cash flows and reinvested cash flows at higher yields, which should be a benefit to net investment income, but the higher interest rates have caused net unrealized investment losses in the 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 $1.9 million in year one and $5.7 million in year two, reducing the annualized net interest spread by approximately 7 basis points and 20 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 $2.4 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, 2023

Total Deferred Annuities Deferred Annuities atMinimum Crediting Rate

Guaranteed minimum crediting rates:

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

Supplemental & Group Benefits

2023 net income reflected the following factors:

•Decline in premium due to run-off of an indemnified block of employer-sponsored products; net premiums earned increased 1.9% excluding the run-off

•Higher net investment income

•Benefit ratios reflecting utilization closer to pre-pandemic levels

•Increased level of operating expenses reflecting a higher allocation of corporate expenses

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

Supplemental & Group Benefits

Net premiums and contract charges earned $ 259.8 $ 275.5 -5.7 %

Benefits, settlement expenses and change in reserves 88.9 91.2 -2.5 %

Interest credited 3.9 1.3 N.M.

Intangible asset amortization expense 14.6 15.7 -7.0 %

Operating expense ratio(2) 38.4 % 35.0 % 3.4 pts

Pretax profit margin(3) 24.3 % 28.5 % -4.2 pts

Worksite direct products benefits ratio 29.1 % 23.0 % 6.1 pts

Worksite direct premium persistency (rolling 12 months) 91.4 % 90.4 % 1.0 pts

Employer-sponsored products benefits ratio 41.4 % 41.8 % -0.4 pts

(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.

2023 net income for the Supplemental & Group Benefits segment was $54.9 million. Segment net premiums earned and benefits expense declined due to an indemnified block that is in run-off. The full-year benefit ratio for the worksite direct product line continued to increase toward the longer-term target although utilization remains below historical levels. The full-year benefit ratio for the employer-sponsored product lines was in line with the prior year but also remains below the longer-term target. Segment net investment income rose 16.8% for the

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

full-year reflecting higher returns on floating rate securities. The non-cash impact of amortization of intangible assets under purchase accounting reduced full-year 2023 core earnings by $14.6 million, pretax, compared to $15.7 million in 2022.

Total segment sales for the year were $26.2 million, up 62.7% over the prior year, with worksite direct supplemental product sales of $15.1 million and employer-sponsored products of $11.1 million. Persistency remains relatively stable for the segment.

Corporate & Other

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

Net investment losses, pretax (24.0) (56.5) N.M.

Net investment losses, after tax (18.8) (44.5) N.M.

For 2023, the net loss decreased $19.6 million, primarily due to lower net investment losses partially offset by an increase in interest expense on the Revolving Credit Facility and the 2023 Senior Notes. The outstanding balance on the Revolving Credit Facility was fully paid off on September 15, 2023 following the issuance of the 2023 Senior Notes.

Investment Results

Total net investment income includes net investment income from our investment portfolio as well as accreted investment income from the deposit asset on reinsurance related to our reinsured block of approximately $2.4 billion of fixed annuity liabilities related to legacy individual annuities written in 2002 or earlier.

Net investment income - investment portfolio $ 339.9 $ 297.4 14.3 %

Investment income - deposit asset on reinsurance 104.9 103.5 1.4 %

Pretax net investment losses (24.0) (56.5) N.M.

For the full year, total net investment income rose 11.0% and net investment income on the managed portfolio increased 14.3%. The full-year increase reflected the benefit of the higher interest rate environment on floating rate investments. Investment yield on the portfolio excluding limited partnership interests was 4.9%, with new money yields continuing to exceed portfolio yields in the core fixed maturity securities portfolio.

For 2023, pretax net investment losses decreased $32.5 million primarily due to changes in fair values of equity securities. Pretax net unrealized investment losses on fixed maturity securities as of December 31, 2023 were $417.6 million compared to pretax net unrealized investment losses of $571.9 million as of December 31, 2022, reflecting much tighter credit spreads across most asset classes, as the 10-year U.S. Treasury yield ended mostly flat, up only 1 basis point.

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

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, 2023

Number ofIssuers FairValue AmortizedCost orCost Pretax NetUnrealizedLoss

Fixed maturity securities

Corporate bonds

Mortgage-backed securities

U.S. Government and federally sponsored agencies 236 430.4 472.9 (42.5)

Government bonds

Equity securities

Non-redeemable preferred stocks 20 $ 68.3

Common stocks 4 1.4

Closed-end fund 1 16.5

Total equity securities 25 $ 86.2

(1)The All other corporates category contains 18 additional industry sectors. Food and beverage, broadcasting and media, telecommunications, technology and retail represented $212.7 million of fair value at December 31, 2023, with the remaining 13 sectors each representing less than $34.9 million.

(2)As of December 31, 2023, 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, 43.3% are tax-exempt and 75.8% 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, 2023.

(4)Based on fair value, 92.3% 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, DBRS, A.M. Best, Egan Jones and Kroll).

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

As of December 31, 2023, our diversified fixed maturity securities portfolio consisted of 3,587 investment positions, issued by 2,340 entities, and totaled approximately $5.2 billion in fair value. This portfolio was 92.6% 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, 2023, 92.1% 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, 2023

Percentof TotalFairValue FairValue AmortizedCost, net

Fixed maturity securities

Equity securities

AAA — —

AA — —

A — —

B — —

CCC or lower — —

Total equity securities 100.0 % $ 86.2

(1)Ratings are as assigned by a NRSRO when available. If no rating is available from a NRSRO, then a rating provided by the investment manager 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, 2023, the AA rated fair value amount included $388.8 million of U.S. Government and federally sponsored agency securities and $639.6 million of mortgage-backed and other asset-backed securities issued by U.S. Government and federally sponsored agencies.

(3)This category primarily represents private placement and municipal securities not rated by a NRSO.

As of December 31, 2023, the fixed maturity securities portfolio had $480.5 million of pretax gross unrealized investment losses on $3,894.7 million of fair value related to 2,500 positions. Of the investment positions with gross unrealized investment losses, there were 405 securities trading below 80.0% of the carrying amount as of December 31, 2023. 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 a rise in U.S. Treasury rates. Credit spreads have been volatile over the same time period, widening by over 60 basis points in October 2022, but only 6 basis points over the two-year period. The 10-year U.S. Treasury yield increased by

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

one basis point at December 31, 2023 compared to December 31, 2022. Additionally, credit spreads tightened during the same time period, with investment grade and high yield tighter by 32 and 146 basis points, respectively. The stability in Treasury yields allowed the significantly tighter credit spreads to drive positive performance across most asset classes. Investment grade and high yield total returns for the year ended December 31, 2023 were up 8.52% and 13.44%, respectively. During the same time period, the Bloomberg Barclays Index Yield-to-Worst for Investment Grade fell 36 basis points, ending at 5.06%, while the High Yield Index fell 137 basis points to 7.59%. The Company's portfolios generated a reduction in net unrealized investment losses as the result of tighter credit spreads.

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, 2023. 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 2 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 $ 302.1 $ 171.5 76.2 %

Net cash used in investing activities (107.4) (214.6) -50.0 %

Net cash provided by (used in) financing activities (207.8) (47.8) 334.7 %

Net increase (decrease) in cash (13.1) (90.9) N.M.

Cash at beginning of year 42.8 133.7 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 2023, net cash provided by operating activities increased $130.6 million. Fluctuations in net cash provided by operating activities are primarily due to timing of premium and investment income collections and benefits and claims payments.

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

60 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, finance-type reinsurance agreements, fluctuations in book overdraft balances, and borrowings, repayments and repurchases related to debt facilities.

For 2023, net cash used in financing activities increased $160.0 million, primarily due to a $70.2 million cash outflow for reverse repurchase agreements compared to a $70.2 million cash inflow in the prior year. An increase in the net cash inflows from FHLB funding agreements was offset by an increase in net cash outflows on annuity contracts.

On September 15, 2023, we issued $300.0 million aggregate principal amount of 7.25% Senior Notes due September 15, 2028 (2023 Senior Notes) and used the net proceeds to fully repay the $249.0 million of outstanding borrowings under our Revolving Credit Facility. The remaining net proceeds from the issuance of the 2023 Senior Notes were available for general corporate purposes.

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

Principal repayment on FHLB funding agreements (189.5) (149.0) (40.5) 27.2 %

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

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 ☑

62 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, 2023, we held $1.1 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 2024 from all of our insurance subsidiaries without prior regulatory approval is approximately $112.3 million, excluding the impact and timing of prior year dividends, of which $127.5 million was paid during the year ended December 31, 2023. We anticipate that our sources of capital will continue to generate sufficient capital to meet the needs for business growth, debt interest payments, shareholder dividends and our share repurchase program. Additional information is contained in Part II - Item 8, Note 13 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

Total capital was $1,721.3 million as of December 31, 2023, including $546.0 million of long-term debt. Total debt represented 31.7% of total capital including net unrealized investment losses on fixed maturity securities (26.9% of total capital excluding net unrealized investment losses on fixed maturity securities and net reserve remeasurements attributed to discount rates*) as of December 31, 2023, which was slightly above our long-term target of 25.0%.

Shareholders' equity was $1,175.3 million as of December 31, 2023, including net unrealized investment losses on fixed maturity securities and net reserve remeasurements attributed to discount rates. The market value of our common stock and the market value per share were $1,335.4 million and $32.70, respectively, at December 31, 2023. Book value per share was $28.78 as of December 31, 2023 ($36.29 excluding net unrealized investment losses on fixed maturity securities and net reserve remeasurements attributed to discount rates*).

Additional information regarding net unrealized investment gains (losses) on fixed maturity securities as of December 31, 2023 is included in Part II - Item 7, Results of Operations by Segment and Part II - Item 8, Note 2 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

Total shareholder dividends paid were $53.9 million for the year ended December 31, 2023. In 2023, the Board declared regular quarterly dividends of $0.33 per share. Compared to the full year per share dividends paid in 2022 of $1.28, the total 2023 dividends paid per share of $1.32 represented an increase of 3.1%.

On May 25, 2022, our Board of Directors authorized a share repurchase program allowing repurchases of up to $50 million (2022 Program) to begin following the completion of the $50 million repurchase plan that was authorized on September 30, 2015 (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

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

the third quarter of 2022, the 2015 Program was completed and we began repurchasing shares under the 2022 Program. During 2023, we repurchased 196,934 shares of our common stock at an average price per share of $32.85 under the Programs. In total and through December 31, 2023, 1,907,976 shares have been repurchased under the 2015 and 2022 Programs at an average price of $34.49 per share. The repurchase of shares was funded through use of cash. As of December 31, 2023, $34.9 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

Revolving Credit Facility Variable 2026 $ — $ 249.0

Long-term debt(1)

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

On September 15, 2023, we issued $300.0 million aggregate principal amount of 7.25% senior notes (2023 Senior Notes), which will mature on September 15, 2028, issued at a discount resulting in an effective yield of 7.29%. Interest on the 2023 Senior Notes is payable semi-annually at a rate of 7.25%. The 2023 Senior Notes are redeemable in whole or in part, at any time, at our option, at a redemption price equal to the greater of (1) 100% of the principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted, on a semi-annual basis, at the Treasury yield (as defined in the indenture) plus 45 basis points, plus, in either of the above cases, accrued interest to the date of redemption. The 2023 Senior Notes are traded in the open market (HMN 7.25).

The net proceeds from the sale of the 2023 Senior Notes were used to fully repay the $249.0 million balance on the Revolving Credit Facility with remaining net proceeds from the sale to be used for general corporate purposes.

As of December 31, 2023, we had outstanding $250.0 million aggregate principal amount of 4.50% Senior Notes (2015 Senior Notes), which will mature on December 1, 2025, issued at a discount resulting in an effective yield of 4.53%. Interest on the 2015 Senior Notes is payable semi-annually at a rate of 4.50%. Detailed information regarding the redemption terms of the 2015 Senior Notes is contained in the Part II - Item 8, Note 10 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022. The 2015 Senior Notes are traded in the open market (HMN 4.50).

As of December 31, 2023, 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.

Effective July 12, 2021, we, as borrower, amended our Credit Agreement (Revolving Credit Facility). The amended Revolving Credit Facility increased the amount available on the senior revolving credit facility from $225.0 million to $325.0 million. Terms and conditions of the amended Revolving Credit Facility are substantially consistent with the prior agreement, with an interest rate based on SOFR plus 115 basis points plus the applicable benchmark adjustment spread. The amended Revolving Credit Facility expires on July 12, 2026.

As of December 31, 2023 we had no borrowings outstanding on the Revolving Credit Facility. 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, 2023.

We had no obligation for securities sold under reverse repurchase agreements at December 31, 2023 compared to $70.2 million as of December 31, 2022.

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

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 and no securities associated with the registration statement have been issued. At the time of issuance of this Annual Report on Form 10-K, we expect to file another "universal shelf" registration statement on Form S-3 with the SEC in March 2024.

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, with an assigned rating of A (Excellent). Assigned ratings and respective affirmation/review dates as of February 17, 2024 were as follows:

Insurance Financial Affirmed/

Strength Ratings (Outlook) Debt Ratings (Outlook) Reviewed

A.M. Best

HMEC (parent company) N.A. bbb (stable) 8/10/2023

HMEC's Life & Retirement subsidiaries A (stable) N.A. 8/10/2023

HMEC's Property & Casualty subsidiaries A (stable) N.A. 8/10/2023

HMEC's Supplemental & Group Benefits subsidiaries

Madison National Life Insurance Company A (stable) N.A. 8/10/2023

National Teachers Associates Life Insurance Company A (stable) N.A. 8/10/2023

Fitch

HMEC (parent company) BBB (stable) 8/17/2023

HMEC's Life Group A (stable) 8/17/2023

HMEC's P&C Group A (negative) 8/17/2023

Moody's

HMEC (parent company) Baa2 (negative) 7/28/2023

HMEC's Life Group A2 (negative) 5/31/2023

S&P A (stable) BBB (stable) 1/30/2024

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.

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

Future Adoption of New Accounting Standards

We have not yet adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures or ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures because the adoption dates have not occurred. For a discussion of these new accounting standards, see Part II - Item 8, Note 1 of the Consolidated Financial Statements in this Annual Report on Form 10-K.

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 $2.4 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.

For further discussion regarding the potential future impacts of inflation and changes in interest rates, see Part I – Item 1A - Risk Factors.

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, 2023, approximately 12.2% of the fixed maturity securities portfolio supported Property & Casualty, 75.7% supported Life & Retirement, and 12.1% supported Supplemental & Group Benefits. For

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

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.

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, 2023, the duration of the fixed maturity securities portfolio was estimated to be approximately 6.0 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 $79.0 million after tax, or 6.5%. 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 $57.7 million after tax, or 4.8%. 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 2024 and 2025 would decrease by approximately $7.1 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.

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

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.

ITEM 8. I Financial Statements and Supplementary Data

HORACE MANN EDUCATORS CORPORATION

INDEX TO FINANCIAL INFORMATION

Page

Consolidated Balance Sheets 72

Consolidated Statements of Operations and Comprehensive Income (Loss) 73

Consolidated Statements of Changes in Shareholders' Equity 74

Consolidated Statements of Cash Flows 75

Notes to Consolidated Financial Statements 76

Note 1 - Basis of Presentation and Significant Accounting Policies 76

Note 2 - Investments 91

Note 3 - Fair Value of Financial Instruments 97

Note 4 - Derivatives 105

Note 5 - Short-Duration Insurance Contracts 106

Note 6 - Long-Duration Insurance Contracts 117

Note 7 -Reinsurance and Catastrophes 128

Note 8 - Deposit Asset on Reinsurance 130

Note 9 - Goodwill and Intangible Assets 130

Note 11 - Income Taxes 135

Note 12 - Shareholders' Equity and Share-Based Compensation 137

Note 13 - Statutory Information and Dividend Restrictions 139

Note 14 - Contingencies and Commitments 140

Note 16 - Supplemental Consolidated Cash and Cash Flow Information 142

Note 17 - Segment Information 143

Note 18 - Prior Period Consolidated Financial Statements 144

68 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, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, 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, 2023, 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 27, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for the Liability for Future Policy Benefits, Deferred Acquisition Costs, and Market Risk Benefits effective January 1, 2023, with a transition date of January 1, 2021, due to the adoption of Accounting Standard Update (ASU) No. 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (ASU No. 2018-12).

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 69

Fair value for hard-to-value fixed maturity securities

As discussed in Note 3 to the consolidated financial statements, as of December 31, 2023, 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, 2023, the estimated fair value of fixed maturity securities was $5,235.3 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 5 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 $312.8 million for property and casualty unpaid claims and claim expense reserves as of December 31, 2023.

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 actuarial standards of practice.

•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.

70 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.

/s/ KPMG LLP

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

Chicago, Illinois

February 27, 2024

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

HORACE MANN EDUCATORS CORPORATION

CONSOLIDATED BALANCE SHEETS

($ in millions, except share data)

December 31,

Assets

Investments

Equity securities at fair value, (cost $86.2 and $99.6) 86.2 99.6

Short-term and other investments 228.8 180.0

Deferred policy acquisition costs 336.3 330.6

Reinsurance balances receivable 480.5 468.0

Separate Account variable annuity assets 3,294.1 2,792.3

Liabilities and Shareholders' Equity

Policy liabilities

Unpaid claims and claim expenses 581.7 564.0

Short-term debt — 249.0

Separate Account variable annuity liabilities 3,294.1 2,792.3

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

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

Net unrealized investment losses on fixed maturity securities (328.3) (449.6)

Net reserve remeasurements attributable to discount rates 21.9 59.0

Net funded status of benefit plans (7.6) (8.8)

Total liabilities and shareholders' equity $ 14,049.9 $ 13,306.1

(1)Recast for the adoption of ASU 2018-12. See Note 1 of the Consolidated Financial Statements

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

72 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

Benefits, losses and expenses

Intangible asset amortization expense 14.8 16.8 13.0

Other expense - goodwill and intangible asset impairments — 4.8 —

Net income 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 1.2 1.4 1.0

(1)Recast for the adoption of ASU 2018-12. See Note 1 of the Consolidated Financial Statements

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

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

HORACE MANN EDUCATORS CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

($ in millions, except per share data)

Year Ended December 31,

Common stock, $0.001 par value

Beginning balance $ 0.1 $ 0.1 $ 0.1

Options exercised — — —

Conversion of common stock units — — —

Conversion of restricted common stock units — — —

Additional paid-in capital

Share-based compensation expense 8.8 8.2 7.7

Retained earnings

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

Change in net funded status of benefit plans 1.2 1.4 1.0

Treasury stock, at cost

Treasury stock acquired - share repurchase authorization (6.5) (24.0) (5.3)

(1)Recast for the adoption of ASU 2018-12. See Note 1 of the Consolidated Financial Statements

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

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

HORACE MANN EDUCATORS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

Year Ended December 31,

Cash flows - operating activities

Depreciation and intangible asset amortization 26.2 27.6 18.4

Share-based compensation expense 9.5 8.9 8.4

Other expense - goodwill impairments — 4.8 —

Changes in:

Amounts due under reinsurance agreements (12.5) (309.8) 7.4

Other operating assets and liabilities 53.9 (109.4) 4.5

Cash flows - investing activities

Equity securities purchases (2.5) (5.2) (46.1)

Equity securities sales and repayments 18.7 12.0 4.7

Limited partnership interests purchases (207.2) (356.4) (320.6)

Limited partnership interests sales 41.4 66.6 86.5

Change in short-term and other investments, net (39.8) 40.0 (8.8)

Acquisition of business, net of cash acquired — (164.4) —

Net cash used in investing activities (107.4) (214.6) (302.0)

Cash flows - financing activities

Dividends paid to shareholders (53.9) (52.6) (51.4)

Proceeds from issuance of 2023 Senior Notes due 2028 297.7 — —

Principal borrowings on Revolving Credit Facility — — 114.0

FHLB borrowings — — 5.0

Principal repayment on Revolving Credit Facility (249.0) — —

Principal repayment on FHLB borrowings — (5.0) (54.0)

Treasury stock acquired (6.5) (24.0) (5.3)

Proceeds from exercise of stock options — — 0.3

Withholding tax payments on RSUs tendered (1.8) (2.4) (2.0)

Annuity contracts: variable, fixed and FHLB funding agreements

Life policy accounts deposits, withdrawals, and surrenders 8.6 7.8 5.1

Change in deposit asset on reinsurance (123.6) (67.0) (39.2)

Net increase (decrease) in reverse repurchase agreements (70.2) 70.2 —