Horace Mann Educators Corp (HMN) 2024 Q2 法說會逐字稿

Good morning, and welcome to the Horace Mann second-quarter 2024 earnings conference call. (Operator Instructions) Also, please be aware that today's call is being recorded. I would now like to turn the call over to Brendan Dawal, Vice President, Investor Relations. Please go ahead.

早安，歡迎參加 Horace Mann 2024 年第二季財報電話會議。（操作員說明）另外，請注意，今天的通話正在錄音。我現在想將電話轉給投資者關係副總裁 Brendan Dawal。請繼續。

Thank you. Welcome to Horace Mann's discussion of our second quarter results. Yesterday, we issued our earnings release, 10-Q, investor supplement and investor presentation. Copies are available on the Investors page on our website.

謝謝。歡迎來到 Horace Mann 對我們第二季業績的討論。昨天，我們發布了收益報告、10-Q、投資者補充資料和投資者介紹。副本可在我們網站的投資者頁面上找到。

Marita Zuraitis, President and Chief Executive Officer and Bret Conklin, Executive Vice President and Chief Financial Officer will give the formal remarks on today's call. With us for Q&A, we have Matt Sharpe, Steve McAnena, Ryan Greenier and Mark Desrochers.

總裁兼執行長 Marita Zuraitis 和執行副總裁兼財務長 Bret Conklin 將在今天的電話會議上發表正式演講。與我們一起進行問答的有 Matt Sharpe、Steve McAnena、Ryan Greenier 和 Mark Desrochers。

Before turning it over to Marita, I want to note that our presentation today includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The company cautions investors that any forward-looking statements include risks and uncertainties and are not guarantees of future performance. These forward-looking statements are based on management's current expectations, and we assume no obligation to update them.

在將其交給 Marita 之前，我想指出，我們今天的簡報包含 1995 年《私人證券訴訟改革法案》中定義的前瞻性陳述。該公司提醒投資者，任何前瞻性陳述都包含風險和不確定性，並非對未來績效的保證。這些前瞻性陳述是基於管理階層目前的預期，我們不承擔更新它們的義務。

Actual results may differ materially due to a variety of factors, which are described in our news release and SEC filings. In our prepared remarks, we use some non-GAAP measures. Reconciliations of these measures to the most comparable GAAP measures are available in our investor supplement. I'll now turn the call over to Marita.

由於多種因素，實際結果可能會存在重大差異，這些因素在我們的新聞稿和 SEC 文件中進行了描述。在我們準備好的評論中，我們使用了一些非公認會計準則衡量標準。我們的投資者補充資料中提供了這些指標與最具可比性的 GAAP 指標的調節表。我現在將電話轉給瑪麗塔。

Thanks, Brendan, and good morning, everyone. Yesterday, we reported second-quarter core earnings of $0.20 per diluted share, a significant improvement over prior year and in line with our pre-announcement. Total revenues were up 9% with net premiums and contract deposits earned up 8%.

謝謝，布倫丹，大家早安。昨天，我們報告了第二季稀釋後每股核心收益為 0.20 美元，比去年有顯著改善，與我們的預先公告一致。總收入成長 9%，淨保費和合約存款收入成長 8%。

Our property and casualty profitability restoration strategy remains on track to reach an underwriting profit in 2024 and target profitability in 2025. Our agency force is driving profitable growth in both our retail and worksite divisions.

我們的財產和意外傷害獲利能力復原策略仍有望在 2024 年實現承保利潤，並在 2025 年實現獲利目標。我們的代理隊伍正在推動零售和工作場所部門的獲利成長。

Property and casualty sales were up 37%; supplemental and group benefit sales were up 20%. These results underscore our confidence in achieving our objective of a double-digit shareholder return on equity in 2025.

財產和意外傷害銷售額成長 37%；補充和團體福利銷售額增加了 20%。這些結果凸顯了我們對實現 2025 年兩位數股東股本回報率目標的信心。

As we noted in our pre-announcement, in the first half of 2024, we recorded some mark-to-market valuation adjustments related to our commercial mortgage loan fund portfolio. The CML portfolio is roughly 9% of our total investments and is held within our life and retirement and supplemental and group benefits portfolios. Bret will give more details, as well as the specific accounting requirements later in the call.

正如我們在預先公告中指出的，2024 年上半年，我們記錄了一些與商業抵押貸款基金投資組合相關的按市值計價的估值調整。CML 投資組合約占我們總投資的 9%，屬於我們的人壽、退休、補充和團體福利投資組合。布雷特將在稍後的電話會議中提供更多細節以及具體的會計要求。

First, I want to take a step back to provide some perspective on our year-over-year investment results. In the first half of 2024, total net investment on the managed portfolio rose more than 3% over prior year, despite the returns on commercial mortgage loan funds that were meaningfully below historical averages. The core fixed maturity portfolio is performing very well in the high interest rate environment.

首先，我想退後一步，對我們的同比投資結果提供一些看法。2024 年上半年，儘管商業抵押貸款基金的回報率明顯低於歷史平均水平，但管理投資組合的淨投資總額比上一年增長了 3% 以上。核心固定期限投資組合在高利率環境下表現非常出色。

At the end of the second quarter, our pre-tax investment yield rose to 4.46% and new money rates exceeded the portfolio book yield by 163 basis points. Even with the revised outlook for commercial mortgage loan funds in 2024, we expect higher total net investment income for the full year on the strength of our core managed portfolio performance.

第二季末，我們的稅前投資收益率升至4.46%，新貨幣利率超出投資組合帳面收益率163個基點。即使對 2024 年商業抵押貸款基金的前景進行了修訂，我們預計，憑藉我們核心管理投資組合的表現，全年的總淨投資收入將會更高。

While the valuation pressure in the commercial mortgage loan portfolio has impacted reported investment income, we do expect to see a tailwind in investment income as market factors impacting the commercial real estate sector begin to recover. Most importantly, these valuation marks have not impacted cash returns on this portfolio, which remains strong at about 7.5%.

雖然商業抵押貸款組合的估值壓力影響了報告的投資收益，但隨著影響商業房地產行業的市場因素開始復甦，我們預計投資收益將出現順風。最重要的是，這些估值並未影響該投資組合的現金回報率，該投資組合仍保持在 7.5% 左右的強勁水平。

Today, I want to focus my remarks on the strength of our underlying business, the results we are seeing from a fully engaged and more productive agency force, and the value we are providing to our educator and employer customers.

今天，我想重點談談我們基礎業務的實力、我們從充分參與和更俱生產力的代理商中看到的成果，以及我們為教育者和雇主客戶提供的價值。

In Property and casualty, we continue to make progress towards our objective of an underwriting profit in 2024. Our reported combined ratio of 111.5%, which reflects expected second quarter seasonality, improved 13 points over prior year. We also recorded favorable prior year development, a net $6.2 million reserve release, primarily related to lower-than-expected severity in auto physical damage claims from accident year 2023.

在財產和意外險方面，我們繼續朝著 2024 年實現承保利潤的目標取得進展。我們報告的綜合成本率為 111.5%，反映了預期的第二季季節性因素，比去年同期提高了 13 個百分點。我們還記錄了上一年的良好發展，淨釋放了 620 萬美元的準備金，這主要與 2023 年事故年的汽車物理損壞索賠嚴重程度低於預期有關。

The auto combined ratio for the quarter was 97.2%, which includes 6.2 points from the favorable prior year development. We continue to see physical damage trends moderating and feel confident in our ability to reach target profitability in 2025.

本季汽車綜合成本率為 97.2%，較上年同期成長 6.2 個百分點。我們繼續看到實體損壞趨勢有所緩和，並對我們在 2025 年實現獲利目標的能力充滿信心。

We continue to successfully implement our auto and property rate plans and will monitor and respond to trends as necessary. We are at rate adequacy in the vast majority of our book and have line of sight to reach rate adequacy in the remainder. In addition, we continue to react to state-level loss trends with additional rate filings as necessary.

我們將繼續成功實施我們的汽車和房地產費率計劃，並將根據需要監控和應對趨勢。我們在本書的絕大多數內容中都達到了利率充足性，並且有能力在其餘部分達到利率充足性。此外，我們將繼續根據需要進行額外的費率備案，以應對州級損失趨勢。

As we've noted before, second quarter historically comprises about half of our full year catastrophe load. The $41 million in losses from 28 PCS declared catastrophes in the second quarter stemmed primarily from record severe convective storm activity across the country. These losses were slightly lower compared to catastrophes in second quarter 2023 but continue to trend above our 5- and 10-year historical averages, in line with industry experience.

正如我們之前指出的，從歷史上看，第二季度的災難負荷約佔全年災難負荷的一半。第二季 28 起 PCS 宣布的災難造成 4,100 萬美元的損失，主要是由於全國創紀錄的嚴重對流風暴活動。與 2023 年第二季的災難相比，這些損失略低，但繼續高於我們的 5 年和 10 年歷史平均水平，這與行業經驗一致。

We have implemented new roof rating schedules which are effective at policy renewal in 6 of our most wind prone states. Our first look at the potential impact this quarter appeared favorable with close to $1 million in estimated cost savings. As a reminder, we expect the full impact of this program to be about 3 points on the property loss ratio when earned in through all applicable 12-month policies.

我們實施了新的屋頂評級計劃，該計劃在 6 個最易風的州更新政策時有效。我們對本季潛在影響的初步觀察似乎是有利的，預計可節省近 100 萬美元的成本。提醒一下，我們預計該計劃對透過所有適用的 12 個月保單賺取的財產損失率的全面影響約為 3 個百分點。

In life and retirement, we continue to see educators respond positively to our value proposition and our core product offerings. This segment remains a cornerstone of our value proposition for educators to protect what they have today and prepare for a successful tomorrow.

在生活和退休生活中，我們繼續看到教育工作者對我們的價值主張和核心產品做出積極回應。這部分仍然是我們為教育工作者保護他們今天所擁有的東西並為成功的明天做好準備的價值主張的基石。

We are able to partner with employers to bring financial wellness and retirement planning resources to educators, including 403(b) plans and our retirement advantage mutual fund platform. 403(b) plans are how many educators are introduced to Horace Mann and enable us to cross sell complementary products to new customers. These core 403(b) product deposits have increased 6% year-to-date and have a healthy sales pipeline.

我們能夠與雇主合作，為教育工作者提供財務健康和退休規劃資源，包括 403(b) 計畫和我們的退休優勢共同基金平台。 403(b) 計畫是向 Horace Mann 介紹多少教育工作者，並使我們能夠向新客戶交叉銷售補充產品。這些核心 403(b) 產品存款今年迄今已增加 6%，並且擁有健康的銷售管道。

Against this backdrop, we’re realizing improvements in the number and quality of leads our internal teams are providing to agents. We upgraded our website, improved our online quoting functionality, and tested a number of digital marketing programs. We're now working to scale up the most successful approaches in the back half of the year and into 2025.

在此背景下，我們的內部團隊向代理商提供的銷售線索的數量和品質都在不斷提高。我們升級了網站，改進了線上報價功能，並測試了一些數位行銷計劃。我們現在正在努力在今年下半年和 2025 年推廣最成功的方法。

Taken altogether, the result is strong retail sales growth from an engaged agency plan. Auto sales were up 29% in the second quarter; life sales were up 27%. Our close ratios remain consistent with historic levels. The growth is coming from more agencies writing more policies and writing higher premium policies.

總而言之，參與的代理計劃帶來了強勁的零售銷售成長。第二季汽車銷量成長29%；壽險銷售額增加了 27%。我們的接近比率與歷史水準保持一致。這一增長來自於更多的機構承保更多的保單以及保費更高的保單。

In the first half of 2024 average agency income increased 14% over prior year. Our retail distribution recruiting is strong and slightly ahead of our plans. We are seeing more new agents reach key milestones faster, which speaks to the quality and productivity level of our agency force.

2024 年上半年，平均代理收入比上年成長 14%。我們的零售分銷招聘勢頭強勁，略高於我們的計劃。我們看到越來越多的新代理商更快達到關鍵里程碑，這說明了我們代理隊伍的品質和生產力水平。

Similar to retail, our worksite division has realized productivity increases in the agency force. Worksite direct sales are up 14%. Notably, recent sales results have even surpassed NTAs pre-pandemic levels.

與零售業類似，我們的工作現場部門已經實現了代理隊伍生產力的提升。工地直接銷售額成長 14%。值得注意的是，最近的銷售業績甚至超過了 NTA 疫情前的水平。

Customers and agents are responding well to recent product enhancements, to our offerings, and we continue to update our product set to meet customer needs. Benefits utilization continues to remain below pre-pandemic levels but is trending towards our long-term target of 43% on a sequential basis.

客戶和代理商對最近的產品增強和我們的產品反應良好，我們將繼續更新我們的產品集以滿足客戶需求。福利利用率繼續低於大流行前的水平，但環比趨向於我們 43% 的長期目標。

In the employer-sponsored business, our number of covered lives is 830,000, a 2% increase over prior year. As we've noted before, this business has a longer sales cycle up to 18 months and sales quarter to quarter can be lumpy. We continue to leverage our existing broker partnerships to expand distribution and are focused on adding more partners.

在雇主資助業務中，我們的承保人數為 83 萬人，比前一年增加 2%。正如我們之前指出的，該業務的銷售週期較長，長達 18 個月，每季的銷售可能不穩定。我們繼續利用現有的經紀商合作夥伴關係來擴大分銷，並致力於增加更多合作夥伴。

Before I turn the call over to Bret, I want to reiterate how well positioned Horace Mann is to reach our goals of an expanded share of the education market and a sustainable double-digit ROE in 2025 and beyond. Our diversified business model provides strong, steady earnings.

在我把電話轉給 Bret 之前，我想重申 Horace Mann 在實現我們擴大教育市場份額和 2025 年及以後可持續兩位數 ROE 的目標方面處於多麼有利的地位。我們多元化的業務模式提供了強勁、穩定的效益。

With the broader P&C earnings pressure facing the industry over the past few years, we've been able to consistently report income on a consolidated basis. And while life and retirement earnings have been lower in the first half of 2024 due to lower net investment income, we anticipate eventual recovery of most of the CML mark-to-market valuation adjustments.

由於過去幾年該行業面臨更廣泛的財產和意外險盈利壓力，我們能夠持續地在合併基礎上報告收入。儘管由於淨投資收入下降，2024 年上半年人壽和退休收入有所下降，但我們預計 CML 的大部分按市值計價的估值調整最終將恢復。

To put it more simply, we have a clear line of sight to target profitability in all segments in 2025, and we are growing profitably across the business. This is the basis of our current view of company value. One of the levers to create further shareholder value is to buy back shares when we believe market conditions are favorable, and we believe that has been the case recently. So far in 2024, we've bought back 230,987 shares at a total cost of $7.7 million.

更簡單地說，我們對 2025 年所有細分市場的獲利目標有明確的目標，並且我們整個業務的獲利都在成長。這是我們目前公司價值觀的基礎。創造進一步股東價值的槓桿之一是在我們認為市場條件有利時回購股票，我們相信最近的情況就是如此。2024 年到目前為止，我們已回購 230,987 股股票，總成本為 770 萬美元。

In addition, I want to touch on some of the activities we've been doing in schools to bookend the summer. Before the school year ended, we completed an entire month of teacher appreciation activities, including exclusive virtual events with celebrities and entertainers who thanked teachers directly. Our website traffic doubled over the beginning of the year, and we were able to follow-up with thousands of educators who wanted to hear more about Horace Mann.

此外，我想談談我們在學校為暑期結束所做的一些活動。在學年結束之前，我們完成了整整一個月的老師感謝活動，包括由名人和藝人直接感謝老師的獨家虛擬活動。我們的網站流量在今年年初翻了一番，我們能夠追蹤數千名希望了解更多關於 Horace Mann 的教育工作者。

As our educators head back to school this month, our agents will be there right alongside them. Our aim for the third quarter is to help educators be set for success both professionally and personally.

當我們的教育工作者本月返回學校時，我們的代理將在他們身邊。我們第三季的目標是幫助教育工作者在專業和個人方面取得成功。

We are confident in our ability to increase our share of the education market, precisely because we're here for educators and we know how to help them succeed better than anyone else. Thanks. And with that, I'll turn the call over to Bret.

我們對增加教育市場份額的能力充滿信心，正是因為我們為教育工作者服務，我們知道如何比其他人更好地幫助他們取得成功。謝謝。然後，我會將電話轉給布雷特。

Thanks, Marita. Second quarter core earnings were $8.4 million or $0.2 per diluted share, a significant increase from $0.03 a year ago. Our P&C profitability restoration strategy remains on track to return underwriting profit in 2024 and reach target profitability in 2025. We're also seeing strong growth momentum across the segments.

謝謝，瑪麗塔。第二季核心收益為 840 萬美元，即稀釋後每股收益 0.2 美元，較去年同期的 0.03 美元大幅成長。我們的財產和意外傷害獲利能力復原策略仍有望在 2024 年恢復承保利潤，並在 2025 年達到獲利目標。我們也看到各個細分市場的強勁成長動能。

As we noted in our pre-announcement, we now expect a full year core EPS of $2.40 to $2.70 primarily due to lower than anticipated income on our commercial mortgage loan funds as well as first half catastrophes that were above our 5-year exposure weighted average.

正如我們在預先公告中指出的那樣，我們現在預計全年核心每股收益為2.40 美元至2.70 美元，主要是由於我們的商業抵押貸款基金收入低於預期，以及上半年災難風險高於我們的5年風險敞口加權平均值。

Today, I'll start my remarks with more detail on investments and then speak to the performance of each of the three segments. Within our $7 billion investment portfolio, over 80% of our assets are invested in our fixed income portfolios, which have a weighted average credit rating of A-plus.

今天，我將首先詳細介紹投資，然後談談這三個部門各自的表現。在我們 70 億美元的投資組合中，超過 80% 的資產投資於固定收益投資組合，這些投資組合的加權平均信用評級為 A+。

These portfolios have clearly benefited from the higher interest rate environment and are performing above our expectations. At the end of the second quarter, our core new money yield was 5.88%, well above the core pretax yield of 4.25%. The portfolio is concentrated in investment grade corporates, municipals, and high-quality agency and agency MBS securities.

這些投資組合顯然受益於較高的利率環境，且表現超出了我們的預期。第二季末，我們的核心新貨幣殖利率為5.88%，遠高於核心稅前殖利率4.25%。該投資組合集中於投資等級企業、市政債券以及高品質機構和機構 MBS 證券。

We have $627 million or about 9% of our portfolio in commercial mortgage loan funds. We hold these assets in fund structures across a diverse group of managers to provide access to broader markets, geographies, property types, borrowers, and loan types versus the direct loan origination strategy used by many of our life industry peers.

我們有 6.27 億美元，約占我們投資組合的 9% 是商業抵押貸款基金。我們將這些資產以基金結構形式持有在不同的管理者群體中，以提供進入更廣泛的市場、地理、財產類型、借款人和貸款類型的機會，而不是我們許多壽險行業同行所使用的直接貸款發放策略。

We therefore follow the equity method of accounting for these funds. Essentially, we're booking quarterly adjustments based on current real estate property valuations that have a one-quarter lag and can be impacted by market factors like interest rates and the level of real estate transactions.

因此，我們採用權益法對這些資金進行會計處理。本質上，我們根據當前的房地產估值進行季度調整，該估值有四分之一的滯後，並且可能受到利率和房地產交易水平等市場因素的影響。

Most of the underlying loans within these funds have maturities of five years or less. If loans that have been mark-to-market mature and potentially pay off or refinance at par, we would expect to see a tailwind in investment income. Most importantly, as Marita mentioned, these valuation marks have not impacted cash returns on this portfolio, which remains strong at about 7.5%.

這些基金中的大多數基礎貸款的期限均為五年或更短。如果以市值計價的貸款到期並有可能以面額償還或再融資，我們預期投資收入將出現順風車。最重要的是，正如 Marita 所提到的，這些估值標記並未影響該投資組合的現金回報率，該投資組合仍保持在 7.5% 左右的強勁水平。

The majority of our total commercial real estate exposure is in multifamily and industrial, both of which are generally performing well. We continue to monitor office exposure closely, which represents less than 3% of the total investment portfolio. These investments are concentrated in senior commercial mortgage loan funds.

我們的商業房地產投資總額中的大部分是多戶型和工業型房地產，這兩種房地產的整體表現都不錯。我們繼續密切監控辦公室投資，該投資佔總投資組合的比例不到 3%。這些投資集中於高級商業抵押貸款基金。

It is primarily well amenitized, well located in generally newer construction Class A exposure. What this means for 2024 is overall net investment income that is slightly higher than 2023 compared to the high-single digit increase we assumed in our original guidance. As I previously mentioned, valuations are based on market factors, and we see the potential for an investment's tailwind in the future.

它主要設施齊全，位置優越，位於較新的建築 A 級暴露區。這意味著 2024 年的整體淨投資收益將略高於 2023 年，而我們在最初的指導中假設的高個位數成長。正如我之前提到的，估值是基於市場因素，我們看到了未來投資順風車的潛力。

The commercial mortgage loan funds report on a one quarter lag. So we have some early insight into Q3 returns. Right now, we expect $10million to $12 million of net investment income from CML's in the second half of 2024, a notable increase from the $ 4 million of net investment income in the first half of the year.

商業抵押貸款基金報告滯後一個季度。因此，我們對第三季的回報有了一些初步了解。目前，我們預計 2024 年下半年 CML 的淨投資收益將達到 1,000 萬至 1,200 萬美元，較上半年的 400 萬美元淨投資收益顯著增加。

This is due to a lower level of negative valuation adjustments across the funds. As a result, we expect CML income to remain below historical averages on a full year basis. We expect further improvement in 2025.

這是由於各基金的負估值調整水準較低。因此，我們預計 CML 全年收入將繼續低於歷史平均值。我們預計 2025 年將有進一步改善。

Turning to the business segment performance, property and casualty, net written premiums rose nearly 17% to $199 million, primarily on premium increases implemented over the past 18 months. The reported combined ratio of 111.5 improved 13 points over prior year including 3.5 points of favorable prior year reserve development. The $6.2 million reserve release is primarily related to auto physical damage claims from accident year 2023.

至於財產和意外險業務部門的業績，淨承保保費增長了近 17%，達到 1.99 億美元，這主要是由於過去 18 個月實施的保費增長。報告的綜合成本率為 111.5，比上年提高 13 個百分點，其中上年儲備發展有利 3.5 個百分點。620 萬美元的準備金釋放主要與 2023 年事故年的汽車物理損壞索賠有關。

Catastrophe losses of $41 million added almost 23 points to the reported combined ratio compared to over 26 points a year ago. We have mentioned before that second quarter typically accounts for about half of our full year cat load.

4,100 萬美元的巨災損失使報告的綜合成本率增加了近 23 個百分點，而一年前則超過 26 個百分點。我們之前提到過，第二季通常占我們全年貓負載的一半左右。

Second quarter losses were above our 5-year and 10-year historic averages. This is consistent with the broader industry, which experienced record levels of severe convective storm activity.

第二季虧損高於 5 年和 10 年歷史平均值。這與更廣泛的行業是一致的，該行業經歷了創紀錄的嚴重對流風暴活動。

In auto, net written premiums of $122 million increased 15% over prior year, primarily on rate actions. The combined ratio of 97.2 improved 17 points over prior year. In terms of loss cost trends, we saw favorable severity trends in the quarter.

汽車領域的淨承保保費為 1.22 億美元，比上年增長 15%，主要是由於費率調整。綜合成本率為 97.2，較上年提高 17 個百分點。就損失成本趨勢而言，我們在本季看到了有利的嚴重趨勢。

Frequency was unfavorable on a quarterly basis, but flat year-to-date. Policyholder retention remains strong at 86.6% despite substantial rate increases.

按季度來看，頻率不利，但今年迄今持平。儘管保費大幅上漲，保單持有人保留率仍維持在 86.6% 的強勁水準。

In property, net written premiums were $77 million, a 20% increase over prior year. The combined ratio reflected cat losses that were below prior year but elevated compared to our historical averages. Despite higher premiums, our policyholder retention remains strong at 90%.

在財產方面，淨承保保費為 7,700 萬美元，比上年增長 20%。綜合成本率反映出巨災損失低於去年，但高於我們的歷史平均值。儘管保費較高，但我們的保單持有人保留率仍高達 90%。

Looking ahead to the full year, we slightly narrowed our P&C earnings guidance range to $36 million to $39 million to adjust for first half results primarily on higher cat costs. We continue to expect to reach a segment underwriting profit in 2024.

展望全年，我們將財產和意外險獲利指引範圍略微縮小至 3,600 萬美元至 3,900 萬美元，以對上半年業績進行調整，主要是由於巨災成本上升。我們繼續預期 2024 年將實現分部承保獲利。

Turning to life and retirement, core earnings of $12 million were below prior year by 29% due to lower than anticipated income on our commercial mortgage loan funds and higher interest credited. In the retirement business, deposits in our core 403(b) products have increased 6% year-to-date and accounts on our fee based mutual fund platform Retirement Advantage surpassed $20,000.

就生活和退休而言，由於我們的商業抵押貸款基金收入低於預期且記入利息較高，核心收入為 1,200 萬美元，比去年同期下降了 29%。在退休業務方面，我們核心 403(b) 產品的存款今年迄今已成長 6%，我們的收費共同基金平台 Retirement Advantage 上的帳戶超過 20,000 美元。

As Marita mentioned, our retirement products are a cornerstone of Horace Mann's value proposition, an important entry point to the education market. Annualized life sales increased 27% over prior year.

正如 Marita 所提到的，我們的退休產品是 Horace Mann 價值主張的基石，是教育市場的重要切入點。年化壽險銷售額較上年成長 27%。

Mortality costs for the quarter were comparable to the prior year and persistency remains strong at about 96%. For the full year outlook, we have adjusted life and retirement segment earnings down to a range of $50 million to $56 million due to lower expected net investment income related to the commercial mortgage loan funds.

本季的死亡率與去年同期相當，且持續性仍保持在 96% 左右的強勁水平。對於全年展望，由於與商業抵押貸款基金相關的預期淨投資收入較低，我們將人壽和退休部門的收益下調至 5,000 萬美元至 5,600 萬美元的範圍。

Turning to worksite, in the supplemental and group benefits segment, earnings of $14 million were above prior year by 19% on higher net investment income and lower policyholder benefits utilization. Premiums and contract charges earned were $64 million down slightly from prior year. The blended benefits ratio of 39% was below prior year, but trending toward our target of 43% on a sequential basis.

說到工作場所，在補充和團體福利部分，由於淨投資收入增加和保單持有人福利利用率降低，收入為 1,400 萬美元，比上年同期增長 19%。賺取的保費和合約費用比上年略有下降 6,400 萬美元。39% 的混合福利比率低於去年，但環比趨向於我們 43% 的目標。

Sales were up 20% mostly on the strength of the worksite direct line. Our employer sponsored sales were up as well, but like the broader group benefits industry our second quarter generally has light sales volume.

銷售額成長了 20%，這主要得益於工地直線電話的力量。我們的雇主贊助的銷售額也有所增長，但與更廣泛的團體福利行業一樣，我們第二季度的銷售額普遍較低。

For the full year, we have adjusted our supplemental and group benefit segment up to an earnings range of $49 million to $52 million which is mostly due to lower benefits utilization in the first half of the year. While we continue to expect, utilization will return to pre pandemic levels, the pace is slower than we originally anticipated.

就全年而言，我們已將補充和團體福利部分的盈利範圍調整至 4900 萬美元至 5200 萬美元，這主要是由於上半年福利利用率較低。雖然我們繼續預期利用率將恢復到疫情前的水平，但速度比我們最初預期的要慢。

As we move into the back half of the year, we continue to prioritize long-term shareholder value creation. At our targeted profitability across the segments, Horace Mann is capable of generating about $50 million in excess capital above what we pay in shareholder dividends in interest expense annually.

隨著下半年的到來，我們繼續優先考慮創造長期股東價值。按照我們各部門的目標獲利能力，Horace Mann 能夠產生約 5,000 萬美元的超額資本，高於我們每年以利息支出支付的股東股息。

Our first priority remains on funding profitable growth. Second, we are committed to increasing the annual shareholder dividend as we have for the past 16 years. Third, we opportunistically buy back shares when market conditions are favorable.

我們的首要任務仍然是為獲利成長提供資金。其次，我們致力於像過去 16 年一樣增加年度股東股利。第三，當市場條件有利時，我們會擇機回購股票。

Year-to-date, through August 2, we have repurchased approximately 231,000 shares at a cost of $7.7 million. We have about $28 million remaining on our current share repurchase authorization.

今年迄今，截至 8 月 2 日，我們已回購約 231,000 股股票，成本為 770 萬美元。我們目前的股票回購授權還剩約 2800 萬美元。

In closing, Horace Mann has a clear line of sight to target profitability across our segments, a strong balance sheet, and solid growth momentum. With these pieces in place, we are well positioned to expand our market share and achieve a 10% shareholder return on equity in 2025. Thank you. Operator, we're ready for questions.

最後，霍勒斯·曼 (Horace Mann) 對我們各部門的獲利目標有著清晰的目標、強勁的資產負債表和穩健的成長勢頭。有了這些措施，我們就可以擴大市場份額，並在 2025 年實現 10% 的股東股本回報率。謝謝。接線員，我們準備好回答問題了。

(Operator Instructions) Meyer Shields, KBW.

（操作員說明）Meyer Shields，KBW。

Great. Good morning, everyone. I wanted to ask a question based on Bret's comments because when we look at, I guess, the rate of earned rate increase or the pace of earned rate increase and what seems to be decelerating severity trends, I-would have expected the underlying accident year loss ratio in auto to improve by a little bit more than it had. I was hoping you could talk through I think it's the frequency issue that probably opposed that. I was hoping you could add a little detail to what's going on there.

偉大的。大家早安。我想根據布雷特的評論提出一個問題，因為當我們看到，我想，賺取率增加的速度或賺取率增加的速度以及似乎正在減速的嚴重趨勢時，我會預期潛在的事故年份汽車的損耗率比以前有所改善。我希望你能談談，我認為可能是頻率問題反對這一點。我希望你能為那裡發生的事情添加一些細節。

Sure, Meyer. This is Mark. I'll take that question. When we look at auto frequency, the accident frequency in the quarter was a bit elevated compared to 2023. I think it's primarily attributable to the fact that spring break across much of the country was a little bit later this year. So some of what would normally come as accident frequency in the first quarter leaked into the second quarter. I think that's a little bit exacerbated by the fact that we have our educator niche.

當然，邁耶。這是馬克。我來回答這個問題。從汽車頻率來看，本季的事故頻率與 2023 年相比略有上升。我認為這主要是因為今年全國大部分地區的春假推遲了一些。因此，一些通常在第一季出現的事故頻率洩漏到了第二季。我認為，由於我們擁有教育工作者的定位，這種情況有點加劇。

But if you look at the first half of the year in aggregate, accident frequency is pretty much flat year-over-year. And if we look at severity, the metal coverages are definitely coming down. I think on the bodily injury and side, we continue to see trends in the kind of mid- to high single digits, somewhat a function of continued social inflation. But in the aggregate, auto loss costs for the first half of the year, about 5% over where they were in 2023, which is pretty much dead on to what we expected.

但如果從今年上半年的整體情況來看，事故發生頻率與去年同期大致持平。如果我們考慮嚴重性，金屬覆蓋率肯定會下降。我認為在身體傷害方面，我們繼續看到中高個位數的趨勢，這在某種程度上是持續社會通貨膨脹的結果。但總體而言，今年上半年的汽車損失成本比 2023 年高出約 5%，幾乎完全符合我們的預期。

Okay. That's very helpful. I guess a follow-up question on that. I guess the delta between filed rate increases on the liability side and on the metal side or the physical damage side, is that changing as we see the physical damage trends abate?

好的。這非常有幫助。我想對此有一個後續問題。我猜想責任方面和金屬方面或物理損壞方面的歸檔率增加之間的增量是否會隨著我們看到物理損壞趨勢減弱而改變？

I think it likely will, Meyer, but right now, I mean most of our rate has been primarily across the board, across all coverages. There are some differences but not material differences as of yet. But I think as we get into next year and we feel strong about our profitability trajectory and you get to more inflationary type rate changes, you'll see it match up, I think, much more closely with the underlying coverage inflation.

我認為可能會，邁耶，但現在，我的意思是我們的大部分費率主要是全面的，涵蓋所有覆蓋範圍。存在一些差異，但目前還沒有實質差異。但我認為，當我們進入明年時，我們對我們的獲利軌跡感到強烈，並且您會看到更多的通膨型利率變化，我認為，您會發現它與潛在的覆蓋通膨更加緊密地匹配。

Certainly, as this year's data gets worked into the pipes.

當然，隨著今年的數據進入管道。

A timeline of the mark to market accreting back to par, I guess maybe the right way to ask is the duration of the real estate portfolio.

我想也許正確的詢問方式是房地產投資組合的持續時間。

Sure. Meyer, this is Ryan. I think you're asking about the timeline of when we think we're going to see some of that recovery in the unrealized. We put a little more detail in the investor presentation on the commercial mortgage loan portfolio this quarter. It's on slides 36 and 37.

當然。邁耶，這是瑞安。我想你問的是我們認為何時會看到一些未實現的復甦的時間表。我們在本季的商業抵押貸款投資組合投資者演示中提供了更多細節。它位於幻燈片 36 和 37 上。

And you can see that about two-thirds of our CML portfolio will mature over the next 18 months. So as a reminder, with equity method of accounting, we've taken a valuation adjustment real time, one quarter lag to every single loan in that limited -- mortgage loan fund portfolio. That's 249 of them.

您可以看到，我們的 CML 投資組合中約三分之二將在未來 18 個月內成熟。因此，提醒一下，透過權益會計法，我們對有限的抵押貸款基金投資組合中的每筆貸款進行了即時估值調整，滯後四分之一。那是 249 個。

And clearly, many of them, the vast majority, continue to perform well. And you can see that in the cash yield statistics that we put out on that slide for you. There's a significant delta between the cash yield and the net investment income, and the net investment income reflects those unrealized adjustments.

顯然，他們中的許多人（絕大多數）繼續表現良好。您可以在我們為您提供的幻燈片上的現金收益率統計數據中看到這一點。現金收益率與投資淨收益之間存在顯著差異，淨投資收益反映了這些未實現的調整。

So with two-thirds of them maturing over the next 18 months, we feel good that there's a tailwind there that will play in. Our estimate for second half is conservative. And so I think you're going to see more of that in 2025 or later, but we feel confident about the trajectory.

因此，隨著其中三分之二的產品在未來 18 個月內成熟，我們感到很高興，因為那裡將有一股順風車發揮作用。我們對下半年的估計是保守的。因此，我認為您會在 2025 年或以後看到更多這樣的情況，但我們對發展軌跡充滿信心。

Fantastic. Thank you so much. And I apologize for my phone.

極好的。太感謝了。我為我的手機道歉。

Wilma Burdis, Raymond James.

威爾瑪·布爾迪斯，雷蒙德·詹姆斯。

Hey, good morning. Could you just talk about the trajectory of the interest rates that are factored into the current CML portfolio valuation? And maybe just talk about the expectation for rate cuts that's baked into that assumption? Thanks.

嘿，早安。您能否談談目前 CML 投資組合估值中考慮的利率軌跡？也許只是談談融入這假設的降息預期？謝謝。

Sure, Wilma. This is Ryan. Thanks again for the question. Our commercial mortgage loan portfolio is primarily floating rate exposure over 80% of the loans, close to 85% are floating rate. And that has certainly helped cash yields. But the inverse of that is it puts pressure on the valuation, on cap rates of the underlying portfolio -- the underlying loans, the properties supporting the loans.

當然，威爾瑪。這是瑞安。再次感謝您的提問。我們的商業抵押貸款組合主要是浮動利率，超過80%的貸款，接近85%是浮動利率。這無疑有助於提高現金收益率。但相反的是，它給估值、基礎投資組合（基礎貸款、支持貸款的房產）的上限利率帶來壓力。

As we move into what will likely be a moderating interest rate environment that will be a tailwind for the commercial real estate market. It will provide some relief on the debt service coverage numbers as well as help support cap rates for the underlying properties.

隨著我們進入可能溫和的利率環境，這將成為商業房地產市場的順風。它將在一定程度上減輕償債覆蓋率，並有助於支持基礎資產的上限利率。

So we're not necessarily counting on that. We have a lot of confidence in the underlying fundamentals of the properties. And as I just said to Meyer, we expect a lot of this unrealized marks to come back as they mature, which is over the next -- two thirds of the portfolio matures over the next 18 months.

所以我們不一定指望這一點。我們對這些房產的基本面充滿信心。正如我剛才對 Meyer 所說的那樣，我們預計許多未實現的標記將在未來成熟時回歸——三分之二的投資組合將在未來 18 個月內成熟。

Okay. Thank you. And then could you talk about what drove the favorable prior year developments? And is that something that we could see continuing into the second half of the year? Thanks.

好的。謝謝。那麼您能談談是什麼推動了前一年的有利發展嗎？我們可以看到這種情況會持續到今年下半年嗎？謝謝。

Sure, Wilma. This is Bret. And as usual, let me just start out by as it relates to the P&C reserves. I think most know that we take a very conservative stance as it relates to our P&C reserving, withholding our reserves at the upper half of the actuarial range.

當然，威爾瑪。這是布雷特。和往常一樣，讓我先從財產和意外保險儲備金開始。我想大多數人都知道，我們在財產和意外險準備金方面採取非常保守的立場，將我們的準備金保留在精算範圍的上半部。

I would also add that we remain very comfortable with our aggregate reserve levels. And to your point, on the PYD that we recorded in the second quarter, obviously, we were encouraged by the emerging favorable trends that we're beginning to see.

我還要補充一點，我們對我們的總儲備水準仍然非常滿意。就您而言，就我們在第二季度記錄的 PYD 而言，顯然，我們對我們開始看到的新興有利趨勢感到鼓舞。

And I think it was in my prepared remarks in the auto claims development pattern, specifically in the auto physical damage coverage. So with that, let me turn it over to Mark who can kind of talk about the more specifically about the trends that we're seeing.

我認為這是我在汽車索賠發展模式中準備好的評論，特別是在汽車物理損壞保險方面。那麼，讓我把它交給馬克，他可以更具體地談論我們所看到的趨勢。

Absolutely. I mean, all that development essentially came out of essentially collision and auto property damage, which are short tailed lines. As those claims are closing, what we're finding is the severity on them has dropped precipitously from where we thought it was at the time when reserves were set.

絕對地。我的意思是，所有這些發展本質上都是源於碰撞和汽車財產損失，這些都是短尾線。隨著這些索賠的結束，我們發現它們的嚴重性已從我們設定儲備金時的預期急劇下降。

So at that time, we were still dealing with the tail end of mid- to high-single digit severity trends. And now as they're settling out, we're seeing trends that are more in the very low single digits and that's really what's driving that prior year development. So we have a very high level of confidence, that we're right on these numbers.

所以當時，我們仍在處理中高個位數嚴重性趨勢的尾端。現在，隨著他們的解決，我們看到趨勢更多地處於非常低的個位數，這確實是推動前一年發展的因素。因此，我們非常有信心，我們對這些數字的判斷是正確的。

Yeah. And I can't sit here and guarantee what's going to happen in the second half of this year, but I would just say this, if the trends continue to be favorable as Mark just described, it would not surprise me if we would have development. But to say that we will or we won't, I can't do that. But we feel very good about where we're at currently and the trends that we're seeing.

是的。我不能坐在這裡保證今年下半年會發生什麼，但我只想說，如果趨勢繼續像馬克剛才描述的那樣有利，如果我們能夠取得發展，我不會感到驚訝。但要說我們會或不會，我不能這樣做。但我們對目前所處的位置以及所看到的趨勢感到非常滿意。

Thank you. And if I could sneak one more end, could you just talk a little bit about share repurchases? They were a bit higher in the quarter. Cats came in line, but just maybe talk about that and what we could see in the second half of the year and maybe even 25% as P&C operations normalized? Thanks.

謝謝。如果我能再偷偷說一句，你可以談談股票回購嗎？該季度的價格略高一些。貓排在隊伍中，但也許只是談談這一點，以及我們在下半年可以看到什麼，甚至隨著財產和意外傷害業務正常化，可能會增加 25%？謝謝。

Yeah, thank you. I'll let Ryan go through the details. But as we always say, share repurchase is just one piece of a very thoughtful capital management strategy. Ryan, you want to take it?

是的，謝謝。我會讓瑞安詳細介紹一下。但正如我們常說的，股票回購只是非常周到的資本管理策略的一部分。瑞恩，你想接受嗎？

Sure. Thanks for the question, Wilma. As we have a clear line of sight to returning to target profitability in 2025, that translates into about $50 million of excess capital production and that's on top of the interest expense and a pretty compelling dividend.

當然。謝謝你的提問，威爾瑪。由於我們有一個明確的目標，即在 2025 年恢復目標盈利能力，這將轉化為約 5000 萬美元的超額資本生產，這還不包括利息支出和相當引人注目的股息。

Our capital management priorities are number one, to fund profitable growth. Number two, to support that dividend. We've got a bit over 4% right now of the dividend yield and we've increased that annually over the past 16 years.

我們的資本管理優先事項是第一，為獲利成長提供資金。第二，支持股息。目前我們的股息殖利率略高於 4%，並且在過去 16 年裡我們每年都在增加。

Our approach to buybacks has historically been opportunistic and will continue to be. Like I said, we have a clear line of sight to target profitability. We feel confident in our excess capital production capabilities, and we clearly feel shares are undervalued.

我們的回購方式歷來都是機會主義的，並且將繼續如此。正如我所說，我們對獲利目標有著清晰的目標。我們對過剩的資本生產能力充滿信心，而且我們明顯感覺到股票被低估了。

And through yesterday, on a year-to-date basis, we bought back 7.7 million at an average price of $33.30. So pretty opportunistic approach to what we feel is an undervalued stock price.

截至昨天，以年初至今，我們以平均價格 33.30 美元回購了 770 萬股。對於我們認為被低估的股價來說，這是相當機會主義的做法。

Okay. Thank you.

好的。謝謝。

(Operator Instructions) And with no further questions, this will conclude our question-and-answer session. I'd like to turn the conference back over to Brendan Dawal for any closing remarks.

（操作員說明）沒有其他問題，我們的問答環節就結束了。我想將會議轉回布倫丹·達瓦爾（Brendan Dawal）發表閉幕詞。

We'd like to thank you for joining our call today. Please reach out if there are any additional questions and have a great day.

我們感謝您今天加入我們的電話會議。如果還有其他問題，請聯絡我們，祝您有美好的一天。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

會議現已結束。感謝您參加今天的演講。現在您可以斷開線路。