AM Best Upgrades Credit Ratings of Madison National Life Insurance Company; Affirms Credit Ratings of Horace Mann Educators Corporation and Remaining Subsidiaries

Rhea-AI Summary

AM Best Upgrades Financial Strength Rating of Madison National Life Insurance Company to A (Excellent) and Affirms Ratings of Horace Mann Insurance Group. The press release discusses the upgraded ratings of Madison National Life Insurance Company and the affirmation of ratings for Horace Mann Insurance Group by AM Best. The ratings reflect the companies' balance sheet strength, operating performance, business profile, and enterprise risk management. Horace Mann's underwriting results have been impacted by significant catastrophe losses due to severe weather events, but the group is taking actions to restore profitability.

Positive

• AM Best upgraded the Financial Strength Rating of Madison National Life Insurance Company to A (Excellent) and the Long-Term Issuer Credit Rating to 'a' (Excellent)
• Horace Mann Insurance Group's ratings were affirmed, reflecting the group's balance sheet strength and strong risk-adjusted capitalization
• The press release provides insights into the companies' operating performance, business profile, and enterprise risk management

Negative

• Underwriting results of Horace Mann Insurance Group have been impacted by significant catastrophe losses due to severe weather events
• Combined ratios are being pressured by rising loss costs, largely driven by inflation in the auto and property lines

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” (Excellent) from “a-” (Excellent) of Madison National Life Insurance Company (Madison National Life) (Madison, WI). At the same time, AM Best has affirmed the FSR of A (Excellent) and the 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). Lastly, 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 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).

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 enterprise risk management (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.

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 ERM.

Horace Mann maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which benefits from a diversified investment portfolio and conservative reserving practices. Operating performance has been driven by consistent net investment income, mostly offset by underwriting losses in the group’s property/casualty operations over the last 18 months. Underwriting results continue to be impacted by significant catastrophe losses due to severe weather events. Additionally, combined ratios are being pressured by rising loss costs, largely driven by inflation in the auto and property lines. The group is taking significant underwriting and rate actions to restore profitability.

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. The company continues to report solid net income over the past five years, which has contributed to capital and surplus growth. Operating performance is enhanced by favorable persistency, cost reduction initiatives and increased agent productivity. Horace Mann Life offers a diversified mix of life, annuities and retirement products.

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 very strong 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 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
• Horace Mann Lloyds

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230810459701/en/

Joni Cerbone

Senior Financial Analyst

+1 908 882 1690

joni.cerbone@ambest.com

Christopher Sharkey

Associate Director, Public Relations

+1 908 882 2310

christopher.sharkey@ambest.com

Rosemarie Mirabella

Director

+1 908 882 2125

rosemarie.mirabella@ambest.com

Al Slavin

Senior Public Relations Specialist

+1 908 882 2318

al.slavin@ambest.com

Source: AM Best

FAQ

What are the upgraded ratings of Madison National Life Insurance Company by AM Best?

AM Best upgraded the Financial Strength Rating of Madison National Life Insurance Company to A (Excellent) and the Long-Term Issuer Credit Rating to 'a' (Excellent)

What are the affirmed ratings for Horace Mann Insurance Group by AM Best?

Horace Mann Insurance Group's ratings were affirmed, reflecting the group's balance sheet strength and strong risk-adjusted capitalization

How has Horace Mann Insurance Group's underwriting performance been affected?

Horace Mann's underwriting results have been impacted by significant catastrophe losses due to severe weather events, but the group is taking actions to restore profitability