HORACE MANN EDUCATORS CORP /DE/HMN
HORACE MANN EDUCATORS CORP /DE/ Goodwill & Intangibles Disclosure
Goodwill and Intangible Assets
The Company conducts goodwill impairment testing at the reporting unit level at least annually or more frequently if events occur or circumstances change that indicate that the carrying amount may not be recoverable. See Note 1 for further description of impairment testing.
At October 1, 2025, October 1, 2024 and October 1, 2023, the Company performed a qualitative goodwill impairment test. Based on the results of the tests, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
The changes in the carrying amount of goodwill by reporting segment for the year ended December 31, 2025 were as follows:
| ($ in millions) | Property & Casualty | Life & Retirement | Supplemental & Group Benefits | Total | ||||||||||||||||||||||
Balance as of January 1, 2023 | ||||||||||||||||||||||||||
| Goodwill | $ | 9.5 | $ | 48.0 | $ | 32.4 | $ | 89.9 | ||||||||||||||||||
| Accumulated impairment losses | — | (35.6) | — | (35.6) | ||||||||||||||||||||||
| Total goodwill, net | 9.5 | 12.4 | 32.4 | 54.3 | ||||||||||||||||||||||
| Acquisitions | — | — | — | — | ||||||||||||||||||||||
| Impairments | — | — | — | — | ||||||||||||||||||||||
Balance as of December 31, 2023 | ||||||||||||||||||||||||||
| Goodwill | 9.5 | 48.0 | 32.4 | 89.9 | ||||||||||||||||||||||
| Accumulated impairment losses | — | (35.6) | — | (35.6) | ||||||||||||||||||||||
| Total goodwill, net | 9.5 | 12.4 | 32.4 | 54.3 | ||||||||||||||||||||||
| Acquisitions | — | — | — | — | ||||||||||||||||||||||
| Impairments | — | — | — | — | ||||||||||||||||||||||
Balance as of December 31, 2024 | ||||||||||||||||||||||||||
| Goodwill | 9.5 | 48.0 | 32.4 | 89.9 | ||||||||||||||||||||||
| Accumulated impairment losses | — | (35.6) | — | (35.6) | ||||||||||||||||||||||
| Total goodwill, net | 9.5 | 12.4 | 32.4 | 54.3 | ||||||||||||||||||||||
| Acquisitions | — | — | — | — | ||||||||||||||||||||||
| Impairments | — | — | — | — | ||||||||||||||||||||||
Balance as of December 31, 2025 | ||||||||||||||||||||||||||
| Goodwill | 9.5 | 48.0 | 32.4 | 89.9 | ||||||||||||||||||||||
| Accumulated impairment losses | — | (35.6) | — | (35.6) | ||||||||||||||||||||||
| Total goodwill, net | $ | 9.5 | $ | 12.4 | $ | 32.4 | $ | 54.3 | ||||||||||||||||||
As of December 31, 2025, the outstanding amounts of definite-lived intangible assets subject to amortization are attributable to the acquisitions of BCG, BCGS and NTA during 2019 as well as the acquisition of MNL during 2022. The acquisitions of BCG, BCGS, NTA and MNL resulted in initial recognition of definite-lived intangible assets subject to amortization in the amounts of $9.1 million, $5.0 million, $160.4 million and $56.5 million, respectively. As of December 31, 2025 the outstanding amounts of definite-lived intangible assets subject to amortization were as follows:
| ($ in millions) | Weighted Average | |||||||||||||
| Useful Life (in Years) | ||||||||||||||
| At inception: | ||||||||||||||
Value of business acquired | 28 | $ | 100.1 | |||||||||||
Value of distribution acquired | 17 | 54.0 | ||||||||||||
Value of agency relationships | 14 | 17.0 | ||||||||||||
Value of customer relationships | 10 | 59.9 | ||||||||||||
Total | 20 | 231.0 | ||||||||||||
| Accumulated amortization and impairments: | ||||||||||||||
Value of business acquired | (45.7) | |||||||||||||
Value of distribution acquired | (23.3) | |||||||||||||
Value of agency relationships | (12.4) | |||||||||||||
Value of customer relationships | (21.5) | |||||||||||||
Total | (102.9) | |||||||||||||
| Net intangible assets subject to amortization: | $ | 128.1 | ||||||||||||
With regards to the definite-lived intangible assets in the table above, the VOBA intangible asset represents the present value of the expected underwriting profit within policies that were in force on the date of acquisition. The VODA intangible asset represents the present value of future business to be written by the existing agency force. The value of agency relationships intangible asset represents the present value of the commission overrides
retained by NTA. The value of customer relationships intangible asset represents the present value of the expected profits from existing BCG and MNL customers in force at the date of acquisition. All of the aforementioned definite-lived intangible assets were valued using the income approach.
Estimated future amortization of the Company's definite-lived intangible assets were as follows:
| ($ in millions) | ||||||||
| Year Ending December 31, | ||||||||
2026 | $ | 14.2 | ||||||
2027 | 14.1 | |||||||
2028 | 14.1 | |||||||
2029 | 13.9 | |||||||
2030 | 14.0 | |||||||
Thereafter | 57.8 | |||||||
Total | $ | 128.1 | ||||||
The VOBA intangible asset is being amortized by product based on the present value of future premiums to be received. The VODA intangible asset with respect to the acquisition of NTA is being amortized on a straight-line basis. The VODA intangible asset with respect to the acquisition of BCGS is being amortized on a straight-line basis subsequent to the reporting date. The value of agency relationships intangible asset is being amortized based on the present value of future premiums to be received. The value of customer relationships intangible assets are being amortized based on the present value of future profits to be received for BCG and based on the present value of future premiums for MNL.
Indefinite-lived intangible assets (not subject to amortization) as of December 31, 2025 were as follows:
| ($ in millions) | Trade Names | State Licenses | Total | |||||||||||||||||
Balance as of January 1, 2023 | $ | 7.6 | $ | 5.8 | $ | 13.4 | ||||||||||||||
| Impairments | — | — | — | |||||||||||||||||
| Acquisitions | — | — | — | |||||||||||||||||
Balance as of December 31, 2023 | 7.6 | 5.8 | 13.4 | |||||||||||||||||
| Impairments | — | — | — | |||||||||||||||||
| Acquisitions | — | — | — | |||||||||||||||||
Balance as of December 31, 2024 | 7.6 | 5.8 | 13.4 | |||||||||||||||||
| Impairments | — | — | — | |||||||||||||||||
| Acquisitions | — | — | — | |||||||||||||||||
Balance as of December 31, 2025 | $ | 7.6 | $ | 5.8 | $ | 13.4 | ||||||||||||||
The trade names intangible asset represents the present value of future savings accruing to NTA, BCG and BCGS by virtue of not having to pay royalties for the use of the trade names, valued using the relief from royalty method. The state licenses intangible asset represents the regulatory licenses held by NTA and MNL that were valued using the cost approach.
The Company conducts intangible asset impairment testing at least annually, or more often if events, changes or circumstances indicate that the carrying amounts may not be recoverable. See Note 1 for further description of impairment testing.
At October 1, 2025, October 1, 2024 and October 1, 2023, the Company performed a qualitative assessment to determine whether it was necessary to perform quantitative intangible asset impairment tests. Based on the assessment of qualitative factors, there were no events or circumstances that led to a determination that it is more likely than not that the fair value of an intangible asset is less than its carrying amount.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 27, 2024 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.