Horace Mann Educators HMN Form 10-Q filing Q2 FY2026

PART I: FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ITEM 1. I Consolidated Financial Statements

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

Horace Mann Educators Corporation 1 Second Quarter 2026 Form 10-Q

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

Horace Mann Educators Corporation 2 Second Quarter 2026 Form 10-Q

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

Horace Mann Educators Corporation 3 Second Quarter 2026 Form 10-Q

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

Horace Mann Educators Corporation 4 Second Quarter 2026 Form 10-Q

HORACE MANN EDUCATORS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - Basis of Presentation and Significant Accounting Policies

Business

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

The Company conducts and manages its business in four reporting segments: (1) Property & Casualty, (2) Life & Retirement, (3) Supplemental & Group Benefits and (4) Corporate & Other.

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in conformity with GAAP, but are not required for interim reporting purposes, have been omitted. These Consolidated Financial Statements and Notes thereto should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Part II - Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year.

The accompanying Consolidated Financial Statements and Notes thereto are unaudited and reflect all adjustments (generally consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position, results of operations and cash flows for the interim periods. The Company's significant accounting policies are summarized in Part II - Item 8, Note 1 of the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

In the quarter ended June 30, 2025, the Company recorded a reduction in net investment income due to an immaterial out-of-period correction of an error related to private debt securities associated with the Company’s limited partnership investments. The $8.1 million after tax ($10.2 million pre-tax) adjustment decreases net income for the following segments: Life & Retirement $5.3 million; and Supplemental & Group Benefits, $2.8 million.

The Company has reclassified the presentation of certain prior period information to conform to the current year's presentation.

Consolidation

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

Use of Estimates

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

The most significant critical accounting estimates include valuation of hard-to-value fixed maturity securities, evaluation of credit loss impairments for fixed maturity securities, valuation of future policy benefit reserves, and valuation of liabilities for property and casualty unpaid claims and claim expense reserves.

Horace Mann Educators Corporation 5 Second Quarter 2026 Form 10-Q

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

Future Adoption of New Accounting Standards

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This guidance will improve the disclosures regarding a public business entity’s expenses by requiring (1) disclosure of the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption, (2) inclusion of certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements, (3) disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and (4) disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The amendments in this guidance will be effective for the Company for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The guidance will have no net impact on the Company's consolidated financial position, results of operations, or cash flows.

Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use-Software. This guidance requires capitalization of costs associated with software developed for internal use once management has authorized and committed to funding the software project and when it is probable the project will be completed and used to perform the function intended.

The amendments in this guidance will be effective for the Company for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements and disclosures, but does not expect the standard will have a material impact on our financial statements.

NOTE 2 - Investments

Net Investment Income

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

(1) In the second quarter of 2025, the Company recorded a reduction in net investment income due to an immaterial out-of-period correction of an error. See additional disclosure contained in Note 1 of the June 30, 2026 Form 10-Q.

Horace Mann Educators Corporation 6 Second Quarter 2026 Form 10-Q

NOTE 2 - Investments (continued)

Net Investment Gains (Losses)

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

The Company may, from time to time, sell fixed maturity securities subsequent to the reporting date but prior to the issuance of the financial statements that were in an unrealized loss position at the reporting date. Such sales are generally driven by issuer-specific developments or other changes in facts and circumstances occurring after the reporting date that result in a reassessment of the Company’s investment strategy or risk profile for a particular security.

The Company’s assessment of its intent and ability to hold fixed maturity securities is made as of the reporting date based on information available at that time. Accordingly, any subsequent sales do not contradict the Company’s conclusion at the reporting date that it neither intended to sell, nor more likely than not required to sell, those securities before recovery of their amortized cost basis. These subsequent developments are not considered conditions that existed as of the reporting date.

Net Investment Gains (Losses) by Transaction Type

The breakdown of net investment gains (losses) by transaction type for the following periods were as follows:

Allowance for Credit Loss Impairments on Fixed Maturity Securities

The following table presents changes in the allowance for credit loss impairments on fixed maturity securities classified as available for sale for the category of other asset-backed securities (no other categories of fixed maturity securities have an allowance for credit loss impairments):

Horace Mann Educators Corporation 7 Second Quarter 2026 Form 10-Q

NOTE 2 - Investments (continued)

Fixed Maturity Securities

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

Horace Mann Educators Corporation 8 Second Quarter 2026 Form 10-Q

NOTE 2 - Investments (continued)

The following table presents the fair value and gross unrealized losses for fixed maturity securities in an unrealized loss position as of June 30, 2026 and December 31, 2025, respectively. The Company views the decrease in fair value of all of the fixed maturity securities with unrealized losses as of June 30, 2026 as due to factors other than a credit loss. As of June 30, 2026, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell the fixed maturity securities with unrealized losses before a recovery of the amortized cost basis. In reaching our conclusion that an allowance for credit is unnecessary, we considered the factors described in the evaluation of credit loss impairments for fixed maturity securities critical accounting estimate in our Annual Report on Form 10-K. In the current three months ended June 30, 2026, the performance of fixed maturity securities has been impacted by the change in interest rates, specifically interest rates being at relatively high levels compared to interest rates at the time of acquisition of the securities. In consideration of the factors, we expect to receive cash flows sufficient to recover the entire amortized cost basis of the securities in the following table.

Horace Mann Educators Corporation 9 Second Quarter 2026 Form 10-Q

NOTE 2 - Investments (continued)

With regards to fixed maturity securities that had gross unrealized losses more than 12 months, the number of positions by their respective credit ratings were as follows:

Fixed maturity securities with an investment grade rating represented 97.7% of the gross unrealized losses as of June 30, 2026. For the same reasons discussed above, we expect to receive cash flow sufficient to recover the entire amortized cost basis of the securities in the previous table.

Maturities of Fixed Maturity Securities

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

Horace Mann Educators Corporation 10 Second Quarter 2026 Form 10-Q

NOTE 2 - Investments (continued)

Sales of Fixed Maturity and Equity Securities

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

Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities

The following table reconciles net unrealized investment gains (losses) on fixed maturity securities, net of tax, included in AOCI:

Limited Partnership Interests

Investments in limited partnership interests are predominantly accounted for using the equity method of accounting (EMA) and include interests in commercial mortgage loan funds, real estate equity funds, private equity funds, infrastructure equity funds, infrastructure debt funds and other funds. In addition, we have one limited partnership investment accounted for at fair value using the fair value option (FVO). Principal factors influencing carrying amount appreciation or depreciation include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. The carrying amounts of limited partnership interests were as follows:

(1) Other funds consist primarily of limited partnership interests in corporate mezzanine and private credit funds.

Horace Mann Educators Corporation 11 Second Quarter 2026 Form 10-Q

NOTE 2 - Investments (continued)

Offsetting of Assets and Liabilities

The Company's derivatives are subject to enforceable master netting arrangements. Collateral support agreements associated with each master netting arrangement provides that the Company will receive or pledge financial collateral in the event minimum thresholds have been reached. The Company’s reverse repurchase agreements are also subject to enforceable master netting arrangements but there was no offsetting in their presentation in the Company’s Consolidated Balance Sheets. Information regarding the Company's derivatives is contained in Part II - Item 8, Note 4 in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The following table presents instruments that were subject to a master netting arrangement for the Company.

Reverse Repurchase Agreements

Periodically, in connection with reverse repurchase agreements, the Company transfers primarily U.S. government, government agency and corporate securities and receives cash. For reverse repurchase agreements, the Company receives cash in an amount equal to at least 95% of the fair value of the securities transferred, and the agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary. The Company accounts for reverse repurchase agreements as secured borrowings. The securities transferred under reverse repurchase agreements are included in Fixed maturity securities with the obligation to repurchase those securities reported in Other liabilities on the Company's Consolidated Balance Sheets. The fair value of the securities transferred was $0.0 million as of June 30, 2026 and December 31, 2025. The obligation for securities sold under reverse repurchase agreements was a net amount of $0.0 million as of June 30, 2026 and December 31, 2025.

Deposits

As of June 30, 2026 and December 31, 2025, fixed maturity securities with a fair value of $24.8 million and $26.3 million were on deposit with governmental agencies as required by law in various states for which the insurance subsidiaries of HMEC conduct business. In addition, as of June 30, 2026 and December 31, 2025, fixed maturity securities with a fair value of $1,153.1 million and $1,107.1 million, respectively, were on deposit with the Federal Home Loan Bank of Chicago (FHLB) as collateral for amounts subject to funding agreements, advances and borrowings which were equal to $1,069.5 million as of June 30, 2026 and $1,039.5 million as of December 31, 2025. The deposited securities are reported as Fixed maturity securities on the Company’s Consolidated Balance Sheets.

NOTE 3 - Fair Value of Financial Instruments

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

Information regarding the three-level fair value hierarchy presented below and the valuation methodologies utilized by the Company to estimate fair values at each reporting date is included in Part II - Item 8, Note 3 of the

Horace Mann Educators Corporation 12 Second Quarter 2026 Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

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

The following table presents the Company's fair value hierarchy for financial assets and financial liabilities measured and carried at fair value on a recurring basis. During the six months ended June 30, 2026 and 2025, there were no transfers between Level 1 and Level 2. As of June 30, 2026, Level 3 invested assets comprised 7.4% of the Company’s total investment portfolio at fair value.

(1) Excludes limited partnerships that are measured at estimated fair value using the NAV per share (or its equivalent) as a practical expedient. As of June 30, 2026, the fair value of such investments was $26.9 million.

(2) Separate Account variable annuity assets represent contractholder funds invested in various actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Separate Account variable annuity liabilities are equal to the estimated fair value of the Separate Account variable annuity assets.

(3) Represents embedded derivatives related to fixed indexed annuity and indexed universal life products reported in Future policy benefit reserves and Other policyholder funds as well as net MRBs reported in Policyholders' account balances in the Company's Consolidated Balance Sheets.

Horace Mann Educators Corporation 13 Second Quarter 2026 Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

Changes in Level 3 Fair Value Measurements

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

(1) Represents embedded derivatives related to fixed indexed annuity and indexed universal life products reported in Future policy benefit reserves and Other policyholder funds as well as net MRBs reported in Policyholders' account balances in the Company's Consolidated Balance Sheets.

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

(3) Transfers into and out of Level 3 during the three and six months ended June 30, 2026 were related to changes in the primary pricing source or changes in observability of external information used in determining fair value. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

Horace Mann Educators Corporation 14 Second Quarter 2026 Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

(1) Represents embedded derivatives related to fixed indexed annuity and indexed universal life products reported in Future policy benefit reserves and Other policyholder funds as well as net MRBs reported in Policyholders' account balances in the Company's Consolidated Balance Sheets.

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

(3) Transfers into and out of Level 3 during the three and six months ended June 30, 2025 were related to changes in the primary pricing source or changes in observability of external information used in determining fair value. The Company's policy is to recognize transfers into and out of the levels as having occurred at the end of the reporting period in which the transfers were determined.

For the three and six months ended June 30, 2026, the Company had net gains of $0.0 million and $0.2 million with respect to Level 3 financial assets. For the three and six months ended June 30, 2025, the Company had net losses of $0.9 million and net gains of $4.9 million with respect to Level 3 financial assets.

For the three and six months ended June 30, 2026, the Company had net losses of $3.7 million and $4.9 million, respectively, that were included in net income that were attributable to changes in the fair value of Level 3 financial liabilities. For the three and six months ended June 30, 2025, the Company had net losses of $3.7 million and $5.6 million, respectively, that were included in net income and attributable to changes in the fair value of Level 3 financial liabilities.

Horace Mann Educators Corporation 15 Second Quarter 2026 Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

Level 3 Assets and Liabilities by Price Source

The table below presents the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources:

(1) Represents embedded derivatives related to fixed indexed annuity and indexed universal life products reported in Future policy benefit reserves and Other policyholder funds as well as net MRBs reported in Policyholders' account balances in the Company's Consolidated Balance Sheets.

External pricing sources for securities represent prices from prior transactions or unadjusted third-party pricing information where pricing inputs are not readily available. For annual reporting periods, certain Level 3 securities are valued with assistance from an independent third-party valuation specialist. During interim reporting periods, the Company updates those valuations using internally developed estimates that are based on the same valuation methodologies and significant assumptions applied by the independent valuation specialist, adjusted as appropriate for current market conditions and security-specific information.

Horace Mann Educators Corporation 16 Second Quarter 2026 Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

Quantitative Information about Level 3 Fair Value Measurements

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

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

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

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

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

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

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

The valuation techniques and significant unobservable inputs used in the fair value measurement for financial assets and financial liabilities classified as Level 3 are subject to the processes as described in Part II - Item 8, Note 3 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Generally, valuation techniques for corporate bonds include using discounted cash flow techniques where the unobservable input is the yield.

Horace Mann Educators Corporation 17 Second Quarter 2026 Form 10-Q

NOTE 3 - Fair Value of Financial Instruments (continued)

Financial Instruments Not Carried at Fair Value

The Company has various other financial assets and financial liabilities used in the normal course of business that are not carried at fair value, but for which fair value disclosure is required. These financial assets and financial liabilities are further described in Part II - Item 8, Note 3 in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The following table presents the carrying amount and fair value of the Company’s financial assets and financial liabilities not carried at fair value and the level within the fair value hierarchy at which such financial assets and liabilities are categorized.

Horace Mann Educators Corporation 18 Second Quarter 2026 Form 10-Q

NOTE 4 - Short-Duration Insurance Contracts

Property & casualty Unpaid Claims and Claim Expense Reserves

The following table is a summary reconciliation of the beginning and ending property & casualty unpaid claims and claim expense reserves for the periods indicated. The table presents reserves on both a gross and net (after reinsurance) basis. The total net property & casualty insurance claims and claim expense incurred amounts are reflected in the Consolidated Statements of Operations and Comprehensive Income (Loss). The end of period gross reserves (before reinsurance balances and reinsurance recoverable balances) are reflected on a gross basis in the Consolidated Balance Sheets. Also included in property & casualty claims expense reserves are legacy commercial line exposures, which are included in the Corporate & Other segment for segment reporting purposes.

(1) Reserves net of expected reinsurance recoverables.

(2) Shows the amounts by which the Company increased (decreased) its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs - also known as prior years' reserve development.

The Company recognized $6.6 million and $11.6 million of net favorable prior years' reserve development for the three and six months ended June 30, 2026. There was $5.5 million and $10.8 million of net favorable prior years' reserve development for the three and six months ended June 30, 2025. The net favorable development for the six months ended June 30, 2026 was primarily a result of favorable loss trends in auto and property for accident years 2025 and prior. The net favorable development for the six months ended June 30, 2025 was primarily a result of favorable loss trends in auto and property for accident years 2024 and prior.

Group Benefits Unpaid Claims and Claim Expense Reserves

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

Horace Mann Educators Corporation 19 Second Quarter 2026 Form 10-Q

NOTE 4 - Short-Duration Insurance Contracts (continued)

(1) Reserves net of expected reinsurance recoverables.

(2) Shows the amounts by which the Company increased (decreased) its reserves in each of the periods indicated for claims occurring in previous periods to reflect subsequent information on such claims and changes in their projected final settlement costs - also known as prior years' reserve development.

Net favorable prior years' reserve development for Group Benefits was $1.6 million and $4.3 million for the three and six months ended June 30, 2026. There was $3.0 million and $2.6 million of net favorable prior years' reserve development for the three and six months ended June 30, 2025. The favorable development for the six months ended June 30, 2026 was primarily the result of favorable loss trends in group life for loss years 2025 and prior. The favorable development for the six months ended June 30, 2025 was primarily the result of favorable loss trends in group life and disability for loss years 2024 and prior.

Reconciliation of Property & Casualty and Group Benefits Unpaid Claims and Claim Expense Reserves to the Consolidated Balance Sheets

(1) This line includes Life & Retirement, Supplemental, and other certain group benefit reserves.

Note 5 - Long-Duration Insurance Contracts

Liability for Future Policy Benefits

As of and for the three and six months ended June 30, 2026 and 2025, the Company updated the net premium ratio when updating for actual historical experience for the quarter; future cash flow assumptions were reviewed but not changed.

The following tables summarize balances and changes in LFPB for traditional and limited-pay contracts.

Horace Mann Educators Corporation 20 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

The balances of and changes in LFPB as of and for the three months ended June 30, 2026 were as follows:

(1) Experience Life contains both whole life and term elements.

(2) As of June 30, 2026, the net LFPB for Supplemental Health was $64.7 million for cancer, $17.2 million for accident, $21.0 million for disability and $80.9 million for other supplemental health policies.

(3) Issuances are calculated at present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new policies issued during the current period.

(4) Interest accruals represent the interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(5) Net premiums collected represent the product of the current period net premium ratio and the gross premiums collected during the period of in force business.

(6) Benefit payments represent the release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal and maturity payments based on revised expected assumptions.

Horace Mann Educators Corporation 21 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

The balances of and changes in LFPB as of and for the six months ended June 30, 2026 were as follows:

(1) Experience Life contains both whole life and term elements.

(2) As of June 30, 2026, the net LFPB for Supplemental Health was $64.7 million for cancer, $17.2 million for accident, $21.0 million for disability and $80.9 million for other supplemental health policies.

(3) Issuances are calculated at present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new policies issued during the current period.

(4) Interest accruals represent the interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(5) Net premiums collected represent the product of the current period net premium ratio and the gross premiums collected during the period of in force business.

(6) Benefit payments represent the release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal and maturity payments based on revised expected assumptions.

Horace Mann Educators Corporation 22 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

The balances of and changes in LFPB as of and for the year ended December 31, 2025 were as follows:

(1) Experience Life contains both whole life and term elements.

(2) As of December 31, 2025, the net LFPB for Supplemental Health was $66.0 million for cancer, $17.9 million for accident, $21.3 million for disability and $81.5 million for other supplemental health policies.

(3) Issuances are calculated at present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new policies issued during the current period.

(4) Interest accruals represent the interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(5) Net premiums collected represent the product of the current period net premium ratio and the gross premiums collected during the period of in force business.

(6) Benefit payments represent the release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal and maturity payments based on revised expected assumptions.

Horace Mann Educators Corporation 23 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

The following table reconciles the net LFPB to LFPB in the Consolidated Balance Sheets. DPL for single premium and immediate annuity products is presented together with LFPB in the Consolidated Balance Sheets:

(1) Reconciling items primarily relate to products not in scope of ASU 2018-12 and return of premium reserves.

The following table summarizes the amount of revenue and interest related to traditional and limited-payment contracts recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss):

Horace Mann Educators Corporation 24 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for traditional and limited-payment contracts:

For the six months ended June 30, 2026 and for the year ended December 31, 2025, net premiums exceeded gross premiums for several cohorts in the Whole Life and Term Life product lines. This resulted in an immaterial change to current period benefit expense for both periods.

The following table summarizes the ranges of actual experience and expected experience for mortality and lapses of LFPB:

Horace Mann Educators Corporation 25 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

The following table provides the weighted-average durations of LFPB, in years:

The following table provides ranges of the weighted-average interest rates for LFPB:

Horace Mann Educators Corporation 26 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

Liability for Policyholders' Account Balances

The Company recognizes a liability for policyholders' account balances. The following tables summarize balances of and changes in policyholders' account balances:

(1) Represents the Policy Account feature embedded in our Experience Life suite of products.

(2) Premiums received represents premiums collected from policyholder during the period of in force business.

(3) Surrenders and withdrawals represent reductions to the policyholders' account balance due to policyholders surrendering the policy or withdrawing funds from the account balance.

(4) Benefit payments represent benefits due under contract that were paid to a policyholder during the periods.

(5) Interest credited represents interest earned and credited to policyholders' account balance during the periods.

(6) Net amount at risk represents guaranteed benefit amounts less current policyholders' account balance at the reporting date.

Horace Mann Educators Corporation 27 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

(1) Represents the Policy Account feature embedded in our Experience Life suite of products.

(2) Premiums received represents premiums collected from policyholder during the period of in force business.

(3) Surrenders and withdrawals represent reductions to the policyholders' account balance due to policyholders surrendering the policy or withdrawing funds from the account balance.

(4) Benefit payments represent benefits due under contract that were paid to a policyholder during the periods.

(5) Interest credited represents interest earned and credited to policyholders' account balance during the periods.

(6) Net amount at risk represents guaranteed benefit amounts less current policyholders' account balance at the reporting date.

Horace Mann Educators Corporation 28 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

The following table reconciles policyholders' account balances to the policyholders' account balance liability in the Consolidated Balance Sheets:

(1) Reconciling items primarily relate to FIA reserves net of account balances, miscellaneous fixed annuity reserves, personal promise accounts and MRBs.

The following tables present the gross account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums:

(1) Excludes products not containing a fixed guaranteed minimum crediting rate.

Separate Account Liabilities

Separate account assets and liabilities consist of investment accounts established and maintained by the Company for certain variable contracts. Some of these variable contracts include minimum guarantees such as GMDBs that guarantee a minimum payment to the policyholder in the event of death.

The assets that support variable contracts are measured at fair value and are reported as separate account assets on the Consolidated Balance Sheets. An equivalent amount is reported as separate account liabilities. MRB assets and liabilities for minimum guarantees are valued and presented separately from separate account assets and separate account liabilities. MRBs are discussed further in the market risk benefits section of this Note to the Consolidated Financial Statements. Policy charges assessed against the policyholders for mortality,

Horace Mann Educators Corporation 29 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

administration and other services are included in the life premiums and contract charges line item on the Consolidated Statements of Operations and Comprehensive Income (Loss).

The following table presents the balances of and changes in the Separate Account variable annuity liabilities presented in the Consolidated Balance Sheets(1):

(1) The Separate Account variable annuity liabilities are backed by, and are equal to, the Separate Account variable annuity assets that represent contractholder funds invested in various actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access.

Market Risk Benefits

The following table presents the balances of and changes in MRBs associated with deferred variable annuities as of and for the three months ended June 30, 2026 and 2025, respectively:

(1) Reflects interest accruals and effect of changes in interest rates, equity markets, equity index volatility and future assumptions.

(2) Balance, end of period, before the effect of changes in the instrument-specific credit risk.

(3) Net amount at risk represents the current guaranteed benefit less current account balance at the reporting date.

The following table presents MRBs by amounts in an asset position and amounts in a liability position. The net liabilities (assets) are included in Policyholders' account balances presented in the Consolidated Balance Sheets.

Horace Mann Educators Corporation 30 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

Deferred Acquisition Costs

The following tables roll-forward DAC for the periods indicated:

Horace Mann Educators Corporation 31 Second Quarter 2026 Form 10-Q

NOTE 5 - Long-Duration Insurance Contracts (continued)

The following table presents a reconciliation of DAC to the Consolidated Balance Sheets:

(1) Reconciling item relates to DAC associated with the Property & Casualty reporting segment.

The assumptions used to amortize DAC were consistent with the assumptions used to estimate LFPB for traditional and limited-payment contracts. The underlying assumptions for DAC and LFPB were updated at the same time.

In the second quarter of 2026 and 2025, the Company conducted a review of all significant assumptions and did not make any changes to future assumptions because actual experience for mortality and lapses was materially consistent with underlying assumptions.

Horace Mann Educators Corporation 32 Second Quarter 2026 Form 10-Q

NOTE 6 - Reinsurance

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

(1) Direct amount is net of the annuity reinsurance transaction accounted for using the deposit method.

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

Horace Mann Educators Corporation 33 Second Quarter 2026 Form 10-Q

Note 7 - Segment Information

The Company conducts and manages its business through 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). The Company does 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 reporting segments, but classifies those items in the fourth reporting segment, Corporate & Other. Corporate & Other includes capital raising activities (including debt financing and related interest expense), net investment gains (losses), certain public company expenses and other corporate-level transactions including termination of defined benefit plans and the early retirement offering. In addition to these transactions, Corporate & Other also includes legacy commercial claims.

The accounting policies of the reporting segments are the same as those described in Note 1-Basis of Presentation and Significant Accounting Policies. Expense allocations are based on certain assumptions and estimates primarily related to direct cost, revenue and activity; methodologies are applied consistently. Stated segment operating results would change if different methods were applied.

The Company’s Chief Executive Officer is the chief operating decision maker (CODM), responsible for reviewing financial performance and making decisions regarding the allocation of resources for the reporting segments. The Company measures and analyzes segment performance based on core earnings which differs from total income as presented in our consolidated statements of operations due to excluding the after-tax impact of net investment gains (losses), discontinued operations, the after-tax impact of goodwill and intangible asset impairments, other non-recurring or infrequent items and the cumulative effect of changes in accounting principles when applicable. We believe core earnings is a better performance measure and indicator of the profitability and underlying trends in our business. The CODM considers actual-to-budget variances in core earnings on a monthly basis when making decisions about allocating capital and personnel to segments and evaluating product pricing.

Horace Mann Educators Corporation 34 Second Quarter 2026 Form 10-Q

NOTE 7 - Segment Information (continued)

Disaggregated financial information for these segments, as regularly provided to the CODM as of and for the three months ended June 30, 2026, is as follows: