Horace Mann Reports Results for Third Quarter

SPRINGFIELD, Ill., Oct. 29  /PRNewswire-FirstCall/ -- Horace Mann Educators Corporation (NYSE:HMN) today reported net losses of $30.8 million (79 cents per share) and $12.0 million (30 cents per share) for the three and nine months ended September 30, 2008, respectively, compared to net income of $18.4 million (41 cents per share) and $64.8 million ($1.45 per share) for the same periods in 2007.  Included in these amounts were net realized losses on securities of $45.2 million ($37.5 million after tax, or 96 cents per share) and $55.7 million ($44.2 million after tax, or $1.10 per share) for the three and nine months ended September 30, 2008, respectively.  In 2007, the third quarter earnings reflected net realized investment losses of $0.5 million ($0.3 million after tax, or 1 cent per share) and the nine months reflected net realized investment gains of $2.1 million ($1.4 million after tax, or 3 cents per share).  All per-share amounts are stated on a diluted basis.

"As previously announced, the continuing challenges of the financial markets had an adverse impact on Horace Mann's third quarter results, as the company recorded losses and impairment write-downs of $45 million pretax, primarily related to our holdings of Lehman Brothers, Fannie Mae, Freddie Mac and AIG.  In addition, and also consistent with previous disclosures, industry-wide catastrophe losses reduced current quarter earnings by approximately 60 cents per share, due in large part to the effect of Hurricanes Gustav and Ike, as compared to an adverse impact of approximately 15 cents per share for the third quarter of 2007," said Louis G. Lower II, President and Chief Executive Officer.  "In spite of the significant level of catastrophe losses, net income before realized investment gains and losses was 17 cents per share in the quarter and our underlying profit fundamentals remain solid.  For the current accident year and excluding catastrophes, our property and casualty combined ratio improved sequentially in the third quarter and was below prior year for both the quarter and year to date.  In addition, excluding the impact of the valuation of deferred policy acquisition costs and change in the guaranteed minimum death benefit reserve, year-to-date combined annuity and life segment earnings were comparable to a very strong prior year result.  Meanwhile, compared to last year's third quarter, average productivity of the approximately 200 agents who have completed our Agency Business School training increased over 10 percent in our lead auto and annuity lines in spite of the difficult competitive and economic environment."

"As previously indicated, our estimate of full-year 2008 net income before realized investment gains and losses is between $1.10 and $1.25 per share," Lower said.  "This projection assumes an average amount of property and casualty catastrophe losses in the fourth quarter and a relatively flat performance in the financial markets from September 30 levels."

Segment Earnings

The property and casualty segment recorded a net loss of $1.3 million for the quarter, resulting in a decrease of $11.7 million compared to the segment's net income for the same period in 2007, including a $16.9 million increase in after tax catastrophe costs.  Pretax catastrophe costs in the current quarter were $36.2 million compared to $10.3 million incurred in the third quarter of 2007.  Hurricane Gustav, at approximately $13 million pretax, and Hurricane Ike, at approximately $12 million pretax, represented the most significant third quarter catastrophe events for the company, with approximately $5 million pretax of adverse reserve development for catastrophe activity in the second quarter of 2008 also recorded in the current period. The third quarter 2008 property and casualty combined ratio was 109.7 percent, including 26.9 percentage points due to catastrophe costs, compared to 96.7 percent, including 7.7 percentage points due to catastrophe costs, in the prior year period.  Favorable prior years' reserve development totaling $6.3 million was recorded in the current quarter, which represented 4.7 percentage points on the combined ratio, compared to $3.7 million, or 2.8 percentage points on the combined ratio, recorded in the third quarter of 2007.

Annuity segment net income of $6.3 million for the quarter increased $1.1 million compared to the third quarter of 2007.  Compared to the prior year and similar to the first six months of 2008, current period improvements in the interest margin were offset by the adverse impact of the financial markets on the level of contract charges earned.  For the third quarter of 2008, the valuation of annuity deferred policy acquisition costs had a net positive impact on earnings, with the favorable impact related to the investment losses recognized in the quarter more than offsetting the adverse impact of the financial markets on variable deposit fund performance.  "Third quarter annuity net fund flows were positive and have increased sequentially over the last two quarters, while cash value persistency of 93 percent has increased steadily throughout the year," noted Lower.

Life segment net income of $4.4 million for the current quarter decreased $1.1 million compared to the same period a year earlier, as growth in earned premium and investment income was more than offset by higher mortality costs. Life persistency remained in excess of 94 percent.

Segment Revenues

The company's total premiums written and contract deposits declined 1 percent and 2 percent compared to the third quarter and first nine months of 2007, respectively, largely due to expected decreases in single premium annuity deposit receipts in 2008.

Property and casualty premiums written increased 1 percent compared to prior year, reflecting lower catastrophe reinsurance premiums and an increase in average property and auto premiums per policy.

Annuity new contract deposits decreased 5 percent and 8 percent compared to the three and nine months ended September 30, 2007, respectively. Scheduled, flexible-premium annuity deposit receipts decreased moderately compared to the prior year, while rollover deposits declined 4 percent and 16 percent compared to the third quarter and first nine months of 2007, respectively.  Life segment insurance premiums and contract deposits were comparable to the prior year.

Sales and Distribution

For the three and nine months ended September 30, 2008, total new auto sales units were 2 percent and 6 percent lower in the current periods than in the prior year, respectively.  "Third quarter true new auto sales volume improved sequentially, reflecting continued productivity gains in the current period," said Lower.  Similarly, Horace Mann agent flexible premium annuity sales were up 9 percent in the quarter and 6 percent year to date versus prior year, offset by lower independent agent sales and an expected decline in single premium rollover deposits.  "IRS transition regulations for the 403(b) annuity marketplace continue to reduce new rollover deposits industry-wide," said Lower.

The number of career agents declined 13 percent to 690 agents at September 30, 2008 compared to 12 months earlier.  "As expected, our decline in agent count primarily reflects the loss of lower-producing agents and a reduction in new agent hires as we continue to transition our hiring standards to target only those individuals we believe will be successful in the new Agency Business Model," Lower said.  Including 360 licensed producers who work for the agents, Horace Mann's total points of distribution increased to 1,050, a growth of 2 percent over prior year.  "In spite of the decline in agent count, a difficult competitive and economic environment, and our continuing actions to reduce risk exposure in hurricane-prone areas, we have recorded positive property and casualty written premium growth and only a slight decline in property and casualty policies in force this year.  Growth in Agency Business School graduate productivity, policyholder retention, and educator policies in force -- the primary focal points of our strategic initiatives -- have contributed significantly to these results."

Investment Gains and Losses

In 2008, pretax net realized investment losses were $45.2 million for the third quarter, including $33.4 million of impairment write-downs and $14.2 million of realized impairment losses on securities that were disposed of during the quarter.  Of the investment losses, $29 million ($24 million of write-downs and $5 million on disposals) were on fixed maturity and preferred stock securities of Lehman Brothers Holdings, Inc., the Federal National Mortgage Association ("Fannie Mae"), the Federal Home Loan Mortgage Corporation ("Freddie Mac"), and American International Group, Inc.  The remaining $9 million of impairment write-downs included $2 million related to securities that the Company no longer intends to hold until the value fully recovers.  An $11.5 million deferred tax allowance was established at September 30, 2008, based on an assessment that gross realized and unrealized investment gains were insufficient to offset gross unrealized investment losses.  Approximately $8.2 million of the allowance related to losses realized during the quarter on Lehman Brothers, Fannie Mae and Freddie Mac, which are considered to be permanently impaired, and was recorded as a reduction to the company's tax benefit on realized investment losses.

"While the investment losses we realized in the quarter were not insignificant, they are very manageable in terms of our ability to maintain acceptable insurance subsidiary capital and operating ratios, particularly in light of the flexibility afforded us by our existing bank credit facility," said Lower.  As previously disclosed, on October 2, 2008 the company drew down $75 million of its $125 million bank credit facility, which currently remains at the holding company level.

Net unrealized investment losses on fixed maturity and equity securities increased from $4.8 million at December 31, 2007, to $105.9 million at June 30, 2008, and totaled $271.1 million at September 30, 2008.  This dramatic and relatively recent increase in the unrealized position reflects the extreme and unprecedented widening of corporate bond spreads.  "Our considered judgment is that our unrealized balance almost exclusively reflects a remarkably disruptive credit market in a crisis mode where liquidity has been severely impaired, with spreads and prices disconnected from rational valuation across all asset classes," said Lower.  "Given our insignificant exposure to sub-prime, Alt-A and other lower-quality securities, coupled with the credit enhancement of the government's TARP program being available to many of our financial institution holdings, we remain comfortable with the underlying credit quality of our portfolio."

Horace Mann -- the largest national multiline insurance company focusing on educators' financial needs -- provides auto and homeowners insurance, retirement annuities, life insurance and other financial solutions.  Founded by educators for educators in 1945, the company is headquartered in Springfield, Ill.  For more information, visit http://www.horacemann.com/.

Statements included in this news release that are not historical in nature are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties.  Horace Mann is not under any obligation to (and expressly disclaims any such obligation to) update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Please refer to the company's Quarterly Report on Form 10-Q for the period ended June 30, 2008 and the company's past and future filings and reports filed with the Securities and Exchange Commission for information concerning the important factors that could cause actual results to differ materially from those in forward-looking statements.

                      HORACE MANN EDUCATORS CORPORATION
                Digest of Earnings and Highlights (Unaudited)
                 (Dollars in Millions, Except Per Share Data)


                        Quarter Ended             Nine Months Ended
                        September 30,               September 30,
                        2008    2007 % Change      2008      2007  % Change
  DIGEST OF EARNINGS

  Net income (loss)   $(30.8)  $18.4    N.M.     $(12.0)    $64.8     N.M.

  Net income (loss)
   per share:
     Basic            $(0.79)  $0.42    N.M.     $(0.30)    $1.50     N.M.
     Diluted (A)      $(0.79)  $0.41    N.M.     $(0.30)    $1.45     N.M.

  Weighted average
   number of shares
   and equivalent
   shares (in
   millions) (B):
     Basic              39.1    43.3  -9.7%        40.1      43.2   -7.2%
     Diluted (A)        39.1    44.3 -11.7%        40.1      44.8  -10.5%



  HIGHLIGHTS

  Operations

  Insurance premiums
   written and
   contract deposits  $251.4  $254.4  -1.2%      $721.0    $735.5   -2.0%

  Return on equity(C)                               1.0%     14.2%   N.M.

  Property & Casualty
   GAAP combined
   ratio               109.7%   96.7%  N.M.       103.3%     91.8%   N.M.
  Effect of
   catastrophe costs
   on the Property &
   Casualty
   combined ratio       26.9%    7.7%  N.M.        15.9%      4.4%   N.M.

  Experienced agents                                529       576   -8.2%
  Financed agents                                   161       221  -27.1%
    Total agents                                    690       797  -13.4%
  Licensed producers                                360       228   57.9%
    Total points of
     distribution (D)                             1,050     1,025    2.4%


  Additional Per
   Share Information

  Dividends paid      $0.105  $0.105   -         $0.315    $0.315     -

  Book value (E)                                 $11.82    $15.73  -24.9%


  Financial Position

  Total assets                                 $5,798.4  $6,295.3   -7.9%
  Short-term debt                                   -        -        -
  Long-term debt                                  199.5     199.5     -
  Total shareholders'
   equity                                         461.8     680.9  -32.2%

  N.M. - Not meaningful.
  (A) Effective December 31, 2004, the Company adopted EITF Consensus 04-8,
      "The Effect of Contingently Convertible Instruments on Diluted
      Earnings per Share".  Diluted per share information for all periods is
      presented on a basis consistent with this consensus.  On May 14, 2007,
      the Company redeemed all remaining Senior Convertible Notes.  For the
      nine months ended September 30, 2007, the Senior Convertible Notes
      represented 0.6 million equivalent shares and had after tax interest
      expense of $0.3 million.
  (B) In November and December 2007, the Company repurchased 1,111,600
      shares of its common stock at an aggregate cost of $20.7 million, or
      an average cost of $18.66 per share.  During the three months ended
      March 31, 2008, the Company repurchased 1,636,376 shares of its
      common stock at an aggregate cost of $29.5 million, or an average cost
      of $18.01 per share.  During the three months ended June 30, 2008, the
      Company repurchased 1,561,849 shares of its common stock at an
      aggregate cost of $24.8 million, or an average cost of $15.93 per
      share.
  (C) Based on trailing 12-month net income (loss) and average quarter-end
      shareholders' equity.
  (D) Includes licensed producers working in exclusive agents' offices and
      excludes independent agents.
  (E) Book value per share excluding the fair value adjustment for
      investments was $15.82 at September 30, 2008 and $16.21 at September
      30, 2007. Ending shares outstanding were 39,061,788 at September 30,
      2008 and 43,294,959 at September 30, 2007.

                                    - 1 -



                      HORACE MANN EDUCATORS CORPORATION
       Statements of Operations and Supplemental GAAP Consolidated Data
                                 (Unaudited)
                            (Dollars in Millions)


                        Quarter Ended            Nine Months Ended
                        September 30,               September 30,
                        2008    2007 % Change      2008      2007  % Change
  STATEMENTS OF
   OPERATIONS

  Insurance premiums and
   contract charges
   earned                $163.4 $163.3    0.1%    $489.7    $488.0    0.3%
  Net investment income    57.8   56.0    3.2%     172.2     166.3    3.5%
  Net realized
   investment gains
   (losses)               (45.2)  (0.5)   N.M.     (55.7)      2.1    N.M.
  Other income              2.2    2.9  -24.1%       7.5       9.0  -16.7%

    Total revenues        178.2  221.7  -19.6%     613.7     665.4   -7.8%


  Benefits, claims and
   settlement expenses    131.2  108.6   20.8%     360.2     307.0   17.3%
  Interest credited        33.2   32.2    3.1%      97.9      95.0    3.1%
  Policy acquisition
   expenses amortized      16.2   18.4  -12.0%      56.0      55.7    0.5%
  Operating expenses       30.6   31.9   -4.1%      98.7     101.2   -2.5%
  Amortization of
   intangible assets        1.3    1.2    8.3%       4.1       4.0    2.5%
  Interest expense          3.4    3.4      -       10.2      10.6   -3.8%

    Total benefits,
     losses and expenses  215.9  195.7   10.3%     627.1     573.5    9.3%


  Income (loss) before
   income taxes           (37.7)  26.0    N.M.     (13.4)     91.9    N.M.
    Income tax expense
     (benefit)             (6.9)   7.6    N.M.      (1.4)     27.1    N.M.

  Net income (loss)      $(30.8) $18.4    N.M.    $(12.0)    $64.8    N.M.


  ANALYSIS OF PREMIUMS
   WRITTEN AND CONTRACT
   DEPOSITS

  Property & Casualty
    Automobile and
     property
     (voluntary)         $143.1 $141.7    1.0%    $407.4    $401.1    1.6%
   Involuntary and
    other property
    & casualty              0.4    0.3   33.3%       1.4       2.0  -30.0%

     Total Property &
      Casualty            143.5  142.0    1.1%     408.8     403.1    1.4%

  Annuity deposits         83.1   87.8   -5.4%     237.8     258.3   -7.9%

  Life                     24.8   24.6    0.8%      74.4      74.1    0.4%

     Total               $251.4 $254.4   -1.2%    $721.0    $735.5   -2.0%


  ANALYSIS OF SEGMENT
   NET INCOME (LOSS)

  Property & Casualty     $(1.3) $10.4    N.M.     $13.6     $45.1  -69.8%

  Annuity                   6.3    5.2   21.2%      14.4      13.7    5.1%

  Life                      4.4    5.5  -20.0%      12.2      12.7   -3.9%

  Corporate and other(A)  (40.2)  (2.7)   N.M.     (52.2)     (6.7)   N.M.

    Net income (loss)     (30.8)  18.4    N.M.     (12.0)     64.8    N.M.

      Catastrophe costs,
       after tax,
       included above (B) (23.6)  (6.7) 252.2%     (41.6)    (11.5) 261.7%

  N.M. - Not meaningful.
  (A) The Corporate and Other segment includes interest expense on debt and
      the impact of realized investment gains and losses and other corporate
      level items. The Company does not allocate the impact of corporate
      level transactions to the insurance segments consistent with how
      management evaluates the results of those segments.  See detail for
      this segment on page 4.
  (B) Includes allocated loss adjustment expenses and catastrophe
      reinsurance reinstatement premiums.  See also page 3.

                                    - 2 -



                      HORACE MANN EDUCATORS CORPORATION
              Supplemental Business Segment Overview (Unaudited)
                            (Dollars in Millions)


                         Quarter Ended            Nine Months Ended
                         September 30,              September 30,
                         2008    2007  % Change     2008      2007  % Change
  PROPERTY & CASUALTY

  Premiums written      $143.5  $142.0     1.1%    $408.8    $403.1    1.4%
  Premiums earned        134.5   133.4     0.8%     402.0     399.2    0.7%
  Net investment income    8.7     9.3    -6.5%      27.0      27.8   -2.9%
  Other income             -       0.3  -100.0%       1.1       2.0  -45.0%
  Losses and loss
   adjustment expenses
   (LAE)                 117.5    97.4    20.6%     320.2     270.3   18.5%
  Operating expenses
   (includes policy
   acquisition expenses
    amortized)            30.1    31.5    -4.4%      95.3      96.1   -0.8%
  Income (loss) before
   tax                    (4.4)   14.1     N.M.      14.6      62.6  -76.7%
  Net income (loss)       (1.3)   10.4     N.M.      13.6      45.1  -69.8%

  Net investment
   income, after tax       7.3     7.8    -6.4%      22.6      23.0   -1.7%

  Catastrophe costs,
   after tax (A)          23.6     6.7   252.2%      41.6      11.5  261.7%
    Catastrophe losses
     and LAE, before tax  36.2    10.3   251.5%      64.0      17.7  261.6%
    Reinsurance
     reinstatement
     premiums, before
     tax                    -       -       -          -         -      -

  Operating statistics:
    Loss and loss
     adjustment expense
     ratio                87.3%   73.0%    N.M.      79.6%     67.7%   N.M.
    Expense ratio         22.4%   23.7%    N.M.      23.7%     24.1%   N.M.
    Combined ratio       109.7%   96.7%    N.M.     103.3%     91.8%   N.M.

      Effect of
       catastrophe costs
       on the combined
       ratio              26.9%    7.7%    N.M.      15.9%      4.4%   N.M.

  Automobile and
   property detail:
    Premiums written
     (voluntary)(B)     $143.1  $141.7     1.0%    $407.4    $401.1    1.6%
      Automobile          93.1    93.1       -      275.2     274.6    0.2%
      Property            50.0    48.6     2.9%     132.2     126.5    4.5%

    Premiums earned
     (voluntary)(B)      134.3   131.9     1.8%     401.7     392.6    2.3%
      Automobile          91.6    91.2     0.4%     273.6     273.3    0.1%
      Property            42.7    40.7     4.9%     128.1     119.3    7.4%

   Policies in force
    (voluntary) (in
    thousands)                                        798       801   -0.4%
     Automobile                                       535       535     -
     Property                                         263       266   -1.1%

   Policy renewal rate
    (voluntary)
     Automobile (6
      months)                                        91.5%     91.4%   N.M.
     Property (12
      months)                                        88.7%     88.2%   N.M.

   Voluntary automobile
    operating
    statistics:
     Loss and loss
      adjustment expense
      ratio               62.1%   69.9%    N.M.      68.3%     69.5%   N.M.
     Expense ratio        22.1%   23.8%    N.M.      23.5%     24.2%   N.M.
     Combined ratio       84.2%   93.7%    N.M.      91.8%     93.7%   N.M.

       Effect of
        catastrophe costs
        on the combined
        ratio              2.0%    0.7%    N.M.       1.6%      0.5%   N.M.

   Total property
    operating
    statistics:
     Loss and loss
      adjustment expense
      ratio              143.8%   78.9%    N.M.     105.4%     61.2%   N.M.
     Expense ratio        23.2%   23.9%    N.M.      24.0%     24.6%   N.M.
     Combined ratio      167.0%  102.8%    N.M.     129.4%     85.8%   N.M.

       Effect of
        catastrophe
        costs on the
        combined ratio    82.1%   24.2%    N.M.      47.3%     13.8%   N.M.

  Prior years' reserves
   favorable (adverse)
   development, pretax
     Voluntary
      automobile          $6.2    $2.8   121.4%      $9.7      $7.2   34.7%
     Total property       (0.5)    0.9     N.M.       0.1       7.6  -98.7%
     Other property and
      casualty             0.6     -       N.M.       1.6       -      N.M.

       Total               6.3     3.7    70.3%      11.4      14.8  -23.0%

  N.M. - Not meaningful.
  (A) Includes allocated loss adjustment expenses and catastrophe
      reinsurance reinstatement premiums.
  (B) Amounts are net of additional ceded premiums to reinstate the
      Company's property and casualty catastrophe reinsurance coverage, if
      any, as quantified above.

                                    - 3 -



                    HORACE MANN EDUCATORS CORPORATION
                 Supplemental Business Segment Overview (Unaudited)
                              (Dollars in Millions)

                             Quarter Ended         Nine Months Ended
                              September 30,           September 30,
                              2008   2007  % Change  2008     2007  % Change
  ANNUITY

  Contract deposits           $83.1   $87.8   -5.4%  $237.8   $258.3   -7.9%
    Variable                   31.7    35.8  -11.5%   102.6    111.2   -7.7%
    Fixed                      51.4    52.0   -1.2%   135.2    147.1   -8.1%
  Contract charges earned       4.2     5.5  -23.6%    13.8     16.4  -15.9%
  Net investment income        34.4    32.6    5.5%   101.5     96.1    5.6%
  Net interest margin
  (without realized
  investment gains
  and losses)                  10.8     9.7   11.3%    32.2     28.9   11.4%
  Other income                  1.4     1.7  -17.6%     4.1      4.2   -2.4%
  Mortality loss and
   other reserve changes       (0.3)   (0.3)     -     (0.4)    (0.9) -55.6%
  Operating expenses
   (includes policy
   acquisition expenses
   amortized)                   6.0     7.9  -24.1%    26.2     25.6    2.3%
  Amortization of
   intangible assets            0.9     0.9      -      3.1      3.0    3.3%
  Income before tax             9.2     7.8   17.9%    20.4     20.0    2.0%
  Net income                    6.3     5.2   21.2%    14.4     13.7    5.1%

  Pretax income increase
   (decrease) due to
   valuation of:
    Deferred policy
     acquisition costs         $2.2    $0.2    N.M.    $0.1     $0.2    N.M.
    Value of acquired
    insurance in force          0.2      -     N.M.       -     (0.1)-100.0%
    Guaranteed minimum
     death benefit reserve     (0.2)     -     N.M.    (0.3)    (0.1) 200.0%

  Annuity contracts in
   force (in thousands)                                 168      164    2.4%
  Accumulated value on
   deposit                                         $3,539.0 $3,750.7   -5.6%
    Variable                                        1,266.1  1,610.3  -21.4%
    Fixed                                           2,272.9  2,140.4    6.2%
  Annuity accumulated
   value retention - 12 months
    Variable accumulations                             92.7%    90.8%   N.M.
    Fixed accumulations                                93.3%    91.9%   N.M.


  LIFE

  Premiums and contract
   deposits                  $ 24.8  $ 24.6    0.8%   $74.4    $74.1    0.4%
  Premiums and contract
   charges earned              24.7    24.4    1.2%    73.9     72.4    2.1%
  Net investment income        15.0    14.3    4.9%    44.5     42.4    5.0%
  Income before tax             6.9     8.4  -17.9%    19.2     19.6   -2.0%
  Net income                    4.4     5.5  -20.0%    12.2     12.7   -3.9%

  Pretax income increase
   (decrease) due to
   valuation of:
    Deferred policy
     acquisition costs         $0.2   $(0.1)   N.M.    $0.1     $ -     N.M.

  Life policies in force
   (in thousands)                                       222      227   -2.2%
  Life insurance in force                           $13,619  $13,499    0.9%
  Lapse ratio - 12 months
   (Ordinary life insurance)                            5.5%     5.6%   N.M.


  CORPORATE AND OTHER (A)

  Components of loss
   before tax:
    Net realized investment
     gains (losses)          $(45.2)  $(0.5)   N.M.  $(55.7)    $2.1    N.M.
    Interest expense           (3.4)   (3.4)    -     (10.2)   (10.6)  -3.8%
    Other operating expenses,
     net investment income
     and other income          (0.8)   (0.4) 100.0%    (1.7)    (1.8)  -5.6%
  Loss before tax             (49.4)   (4.3)   N.M.   (67.6)   (10.3)   N.M.
  Net loss                    (40.2)   (2.7)   N.M.   (52.2)    (6.7)   N.M.

  N.M. - Not meaningful.
  (A) The Corporate and Other segment includes interest expense on debt and
      the impact of realized investment gains and losses and other corporate
      level items. The Company does not allocate the impact of corporate
      level transactions to the insurance segments consistent with how
      management evaluates the results of those segments.

                                    - 4 -



                      HORACE MANN EDUCATORS CORPORATION
              Supplemental Business Segment Overview (Unaudited)
                            (Dollars in Millions)


                          Quarter Ended            Nine Months Ended
                          September 30,              September 30,
                          2008    2007 % Change      2008     2007  % Change
  INVESTMENTS

  Annuity and Life
    Fixed maturities,
     at fair value
     (amortized
     cost 2008,
      $3,170.2;
      2007, $3,111.3)                             $2,956.3  $3,077.4   -3.9%
    Equity
     securities, at
     fair value
     (cost 2008,
      $50.9;  2007,
      $49.1)                                          36.6      47.2  -22.5%
    Short-term investments                           113.6      60.8   86.8%
    Short-term
     investments,
     securities
     lending
     collateral                                          -      77.6 -100.0%
    Policy loans and
     other                                           106.9     101.0    5.8%
       Total Annuity
        and Life
        investments                                3,213.4   3,364.0   -4.5%

  Property &   Casualty
    Fixed maturities,
     at fair value
     (amortized
     cost 2008,
      $659.3;  2007,
      $758.7)                                        622.1     758.8  -18.0%
    Equity
     securities, at
     fair value
     (cost 2008,
      $30.7;  2007,
      $32.4)                                          25.0      32.5  -23.1%
   Short-term
    investments                                       54.2       6.3    N.M.
   Short-term
    investments,
    securities
    lending
    collateral                                         -          -      -
      Total Property
       & Casualty
       investments                                   701.3     797.6  -12.1%

  Corporate  investments                               0.9       6.7  -86.6%

     Total investments                             3,915.6   4,168.3   -6.1%

  Net investment
   income
    Before tax          $57.8   $56.0   3.2%        $172.2    $166.3    3.5%
    After tax            39.2    38.1   2.9%         117.0     113.0    3.5%

  Net realized
   investment gains
   (losses) by
   investment
   portfolio
   included in
   Corporate and
   Other segment
   gain (loss)
    Property &
     Casualty          $(11.9)  $(0.6)   N.M.       $(13.6)    $(0.2)   N.M.
    Annuity             (30.7)    0.1    N.M.        (41.8)      3.5    N.M.
    Life                 (2.6)    -      N.M.         (0.3)     (1.2)   N.M.
    Corporate and
     Other                 -      -      N.M.           -         -     N.M.
      Total, before
       tax              (45.2)   (0.5)   N.M.        (55.7)      2.1    N.M.
      Total, after tax  (37.5)   (0.3)   N.M.        (44.2)      1.4    N.M.
        Per share,
         diluted       $(0.96) $(0.01)   N.M.       $(1.10)    $0.03    N.M.

  N.M. - Not meaningful.
                                     - 5 -


                      HORACE MANN EDUCATORS CORPORATION
              Supplemental Business Segment Overview (Unaudited)
                            (Dollars in Millions)

                                                               June December
                                        September 30,           30,    31,
                                            2008               2008   2007
                                                               Net     Net
                                                  Net        Unreal- Unreal-
                                               Unrealized      ized    ized
                                       Fair      Gain           Gain   Gain
                                       Value    (Loss)         (Loss) (Loss)

  FIXED MATURITY & EQUITY SECURITY
   INVESTMENTS
  Fixed income securities
    U.S. government and federally
     sponsored agency bonds           $165.7       $0.2         $0.8   $2.3
    Municipal bonds                    477.9      (22.8)        (5.1)   6.0
    Corporate bonds
      Financial institutions           183.6      (31.6)       (13.5)  (3.0)
      Other                          1,259.5     (113.5)       (34.1)  11.0
      High yield                       162.9      (17.2)        (9.5)  (4.6)
    Foreign government bonds            14.9        0.5          0.9    1.5
    Mortgage-backed securities
      Prime agency                     874.3       (0.6)        (2.3)   1.9
      Prime other                       16.3       (0.1)        (1.6)   0.5
      Sub-prime, Alt-A                   7.5       (0.7)        (0.6)  (0.1)
    Commercial mortgage-backed
     securities                        258.5      (47.1)       (23.9)  (5.4)
    Asset-backed securities
      Sub-prime, Alt-A                   4.4       (0.3)        (0.1)   -
      Collateralized debt
       obligations, collateralized
       loan obligations                 14.9       (1.2)        (2.5)  (3.8)
      Other                             96.1       (3.8)        (1.1)   0.4
    Preferred stocks
      Financial institutions            67.1      (25.1)        (9.4)  (7.6)
      Other                             33.8       (8.1)        (4.2)  (3.4)

        Total fixed income
         securities                  3,637.4     (271.4)      (106.2)  (4.3)

  Common stocks                          2.6        0.3          0.3   (0.5)
  Derivatives                            -          -            -      -

        Total fixed maturity
         and equity security
         investments                $3,640.0    $(271.1)     $(105.9) $(4.8)


                                       September 30, 2008
                                      Fair    Net Unrealized
                                      Value    Gain (Loss)
  BANKING AND FINANCE EXPOSURE
  Wells Fargo & Company /
   Wachovia Corporation                $20.4      $(1.8)
  Bank of America Corporation /
   Merrill Lynch & Co., Inc.            19.5       (4.9)
  JPMorgan Chase & Co.                  18.8       (6.2)
  The Goldman Sachs Group, Inc.         18.3       (4.4)
  General Electric Company /
   GE Capital                           18.0       (3.3)
  Citigroup Inc.                        12.1       (2.5)
  American Express Company              12.0       (1.5)
  Morgan Stanley                        11.0       (5.4)
  Barclays PLC                          10.7       (3.3)
  National Australia Bank Limited        9.6       (0.8)
  UBS AG                                 9.5       (2.8)
  HSBC North America Holdings Inc.       8.8       (2.4)
  The Royal Bank of Scotland plc         6.9       (2.4)
  All other, 45 issuers                 75.1      (15.0)

        Total                         $250.7     $(56.7)

                                   - 6 -


DATASOURCE: Horace Mann Educators Corporation



CONTACT:  Dwayne D. Hallman, Senior Vice President - Finance of Horace

Mann Educators Corporation, [phone]



Web site:  http://www.horacemann.com/ 

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