A.M. Best Assigns Rating to Horace Mann Educators' New Senior Notes; Affirms Financial Strength, Issuer Credit and Debt Ratings

A.M. Best Co. has assigned a rating of "bbb-" to the
$125 million 6.85% 10-year senior unsecured notes issued by Horace
Mann Educators Corporation (HMEC) (NYSE: HMN). Concurrently, A.M. Best
has affirmed the financial strength rating (FSR) of A- (Excellent) and
issuer credit ratings (ICR) of "a-" of Horace Mann Insurance Group
(Horace Mann) and its property/casualty subsidiaries. Additionally,
A.M. Best has affirmed the FSR of A- (Excellent) and ICR of "a-"of
HMEC's life/health insurance subsidiary, Horace Mann Life Insurance
Company (Horace Mann Life), as well as HMEC's ICR of "bbb-"and the
debt ratings on HMEC's outstanding securities. All the above companies
are domiciled in Springfield, IL. All ratings have a stable outlook.
(See below for a detailed list of ratings.)
   Proceeds from the notes will be used to pay off the $74 million
balance of HMEC's bank facility, which was borrowed to repurchase a
portion of its outstanding senior convertible notes due in 2032. A.M.
Best believes the approximately $50 million remaining will likely be
utilized to further reduce existing corporate debt in the near term.
HMEC's pro forma financial leverage, including the new $125 million
senior notes, is approximately 29%. Interest coverage is well within
parameters for the current rating level.
   The ratings reflect the revitalization of the property/casualty
group's capitalization driven by the corrective measures management
has taken in recent years. The 2005 operating results--although
affected by roughly $37 million in net catastrophe losses due to
hurricanes Katrina, Rita, and Wilma--have been driven by positive
underwriting results led by the private passenger auto liability and
private passenger auto physical damage lines. Performance of Horace
Mann's property book, although dampened by catastrophe losses, has
improved markedly as rate increases and continued improvements in
underwriting terms have begun to produce earning results.
   The capital position of the property/casualty operations has been
strengthened by its 2005 year-end results and is supportive of the A-
(Excellent) rating level. Horace Mann also benefits from its expertise
in personal line products for the educator market, which has enabled
it to obtain numerous endorsements from local, state and national
educational associations. In addition, distribution through exclusive
agents, many of whom are former educators, affords strong ties to
local education communities.
   The ratings also reflect Horace Mann's strict expense management
and strengthened underwriting standards, as well as its adequate loss
reserve position, which experienced little development throughout 2005
after the corrections made in 2003. Horace Mann continues to operate
through a corporate structure that affords financial flexibility as a
publicly-traded holding company with access to the capital markets,
moderate financial leverage and historically solid fixed-charge
coverage.
   Horace Mann Life's rating reflects its significant presence within
HMEC, its sound risk-adjusted capitalization on a stand-alone basis,
its overall positive statutory operating performance, increased agent
productivity and the development of an independent field force, which
complements its captive agency field force for the company's 403(b)
tax-qualified annuity products. Partially offsetting these strengths
is the impact of the persistent low interest rate environment on
Horace Mann Life's fixed annuity block--which has experienced
considerable spread compression--stock market volatility and its
impact on fee income from its variable annuity business and declining
life insurance sales trends. The rating also considers the continuing
demand on Horace Mann Life's financial resources to support
stockholder dividends to HMEC.
   The FSR of A- (Excellent) and ICRs of "a-" have been affirmed for
Horace Mann Insurance Group and its following property/casualty
subsidiaries:

   --  Horace Mann Insurance Company

   --  Horace Mann Property & Casualty Insurance Company

   --  Teachers Insurance Company

   --  Horace Mann Lloyds

   The FSR of A- (Excellent) and ICR of "a-" have been affirmed for
Horace Mann Life Insurance Company.
   The ICR of "bbb-" has been affirmed for Horace Mann Educators
Corporation.
   The following debt rating has been assigned:

   Horace Mann Educators Corporation--

   -- "bbb-" on $125 million 6.85% senior unsecured notes, due 2016

   The following debt ratings have been affirmed:

   Horace Mann Educators Corporation--

   -- "bbb-" on $75 million 6.05% senior unsecured notes, due 2015

   -- "bbb-" on $353.5 million senior unsecured convertible notes,
due 2032

   The following indicative debt ratings have been affirmed on
securities available under the $300 million shelf registration:

   Horace Mann Educators Corporation--

   -- "bbb-" on senior unsecured debt

   -- "bb+" on subordinated debt

   -- "bb" on preferred stock

   A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit A.M. Best's Web site at www.ambest.com.