Best Assigns Debt, Financial Strength Ratings to Horace Mann

A.M. Best Co. announced that it has assigned indicative ratings of “bbb-” to unsecured senior debt, “bb+” to subordinated debt and “bb” to preferred stock to Horace Mann Educators recently filed $300 million universal shelf offering.

Best also said it has affirmed Horace Mann’s existing debt and “A-” (Excellent) financial strength ratings for both its P/C and life/health operations. All the ratings have a stable outlook.

“The shelf offering allows Horace Mann to periodically sell debt securities, common stock, preferred stock and other securities, with net proceeds to be used to reduce outstanding debt or for general corporate purposes,” said the bulletin.

Best added that it “views favorably Horace Mann’s strict expense management and strengthened underwriting standards in the property/casualty operations.” Concerning the company’s life/health operations, Best said it “views favorably its solid marketing niche in the educators’ market place, consistently positive operating performance and the ongoing success in growing agent productivity.” The rating also “recognizes the establishment of its independent annuity field force.”

The rating agency noted, however, that “these strengths are partially offset by the aggressive underwriting leverage position maintained in the property/casualty operations and the decline in operating performance in recent years that was primarily influenced by prior year adverse loss reserve development.”

It concluded that although “the capital position of the property/casualty operations has declined, it is supportive of the Excellent rating level.”