Fitch Affirms Horace Mann

Fitch Ratings affirmed the senior debt ratings of Horace Mann Educators Corp. at “A-” and affirmed the “AA-” insurer financial strength (IFS) ratings on its five insurance subsidiaries. The rating outlook on the ratings has been changed to negative from stable.

Horace Mann’s ratings continue to be supported by the company’s solid risk-based capitalization and loss reserves, very strong catastrophe reinsurance protection, high quality, liquid investment portfolio and well-defined market niche. Partially offsetting factors include the very competitive nature of the personal auto and individual annuity markets where Horace Mann competes, increased financial leverage at the holding company level and investment related losses incurred during the first half of 2002.

For Horace Mann to maintain its existing ratings Fitch expects a return to the company’s 25 percent long-term financial leverage target while maintaining its existing NAIC risk-based capital ratios, the continued demonstration of better than personal lines industry underwriting performance in Horace Mann’s property casualty operations, and no unexpected deterioration in asset quality.