AM Best Affirms Credit Ratings of Horace Mann Educators Corporation and Its Subsidiaries; Assigns Issue Credit Rating to Senior Unsecured Notes

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a" (Excellent) of the property/casualty (P/C) members of Horace Mann Insurance Group (Horace Mann), and Horace Mann Life Insurance Company (Horace Mann Life). In addition, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of "a" (Excellent) of National Teachers Associates Life Insurance Company (Addison, TX) and its affiliated entity, NTA Life Insurance Company of New York (New York, NY) (collectively referred to as NTA Life). Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of "a" (Excellent) of Madison National Life Insurance Company (Madison National Life) (Madison, WI). Additionally, AM Best has affirmed the Long-Term ICR of "bbb" (Good) of Horace Mann Educators Corporation (HMEC) (NYSE:HMN) and the Long-Term Issue Credit Rating (Long-Term IR) of "bbb" (Good) on its $250 million, 4.5% senior unsecured notes, due 2025. The outlook of these Credit Ratings (ratings) is stable. All companies are headquartered in Springfield, IL, unless otherwise specified. (See below for a detailed list of the P/C subsidiaries). Lastly, AM Best has assigned a Long-Term IR of "bbb" (Good) to the $300 million, 7.25% senior unsecured notes, due 2028 of HMEC (NYSE:HMN). The outlook assigned to this rating is stable.

The ratings of Horace Mann reflect the group's balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Horace Mann maintains the strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), which benefits from a diverse investment portfolio and conservative reserving practices. The group's operating results have struggled in recent years as it continues to be impacted by severe weather events, as well as rising loss costs, largely driven by inflation in the auto and property lines. Strong net investment income has helped offset underwriting losses. The group has taken significant rate and non-rate actions to restore profitability. The group's current underwriting activities include the writing of automobile, homeowners and supporting lines of business. The group has achieved strong brand recognition within the educator's market and benefits from significant policyholder loyalty.

The ratings of Horace Mann Life reflect its balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and appropriate ERM.

Horace Mann Life has established itself as one of the largest providers of 403 (b) tax-qualified fixed and variable annuities in the United States, focused on educators as its primary market. Horace Mann Life offers a diversified mix of life, annuities and retirement products. The company has shown consistent pre-tax operating gains over the past five years. Operating performance is enhanced by favorable persistency, cost reduction initiatives and increased agent productivity.

The ratings of NTA Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also reflect support the company receives from its parent, HMEC, and full integration of its operations.

NTA Life maintains the strongest level of risk-adjusted capitalization, as measured by BCAR. The company has reported consistent net income and strong profitability ratios. NTA Life's product mix added to Horace Mann's already diverse suite of products brings additional complementary products to better meet the needs of educators.

The ratings of Madison National Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as adequate operating performance, limited business profile and appropriate ERM. The ratings also reflect support the company receives from its parent, HMEC, and full integration of their operations. Madison National Life's products are complementary to Horace Mann's property/casualty, life and supplemental products.

Madison National Life maintains the strongest level of risk-adjusted capitalization, as measured by BCAR. The company's capital position has benefited from historically profitable operating performance. The company offers employer-sponsored benefit products, including short- and long-term disability and group life, which further enhances Horace Mann's supplemental business line by offering a full suite of group and individual products along with additional distribution capabilities.

The FSR of A (Excellent) and the Long-Term ICRs of "a" (Excellent) have been affirmed with stable outlooks for the following P/C members of Horace Mann Insurance Group:

• Horace Mann Insurance Company
• Horace Mann Property & Casualty Insurance Company
• Teachers Insurance Company

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

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