Springfield, Ill.-based insurer Horace Mann Educators Corp. announced that its net income for the third quarter and nine months ended Sept. 30, 2003, was negatively affected by approximately 57 cents per share due to adverse prior years’ development and strengthening of property and casualty claims reserves.
The company’s recently completed internal reserve studies identified $30.1 million pretax of adverse prior years’ development, which primarily relates to voluntary automobile liability claims from the 2001 and 2002 accident years. In addition to the prior years’ development, the company also strengthened current accident year reserves by approximately $8 million pretax in the third quarter.
The company has hired consultant Deloitte & Touche to conduct a review of its claims operations and reserving processes, which will include a review of claim files and claim handling processes and procedures.
Primarily as a result of the property and casualty adverse development and reserve strengthening, the company is reducing its guidance for full year 2003 net income before realized investment gains and losses to 30 cents to 40 cents per share.
Topics Profit Loss
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