Prudent stewardship of Horace Mann’s $6.6 billion investment portfolio is vital to ensure we meet our promises to policyholders, employees and other stakeholders. We and our outside asset managers cultivate a conservative risk management culture that appropriately balances investment returns with ESG risks and opportunities. We pursue diversified investment strategies that are designed to limit portfolio volatility, appropriately navigate changing market dynamics and economic uncertainty, and proactively identify and capitalize on opportunities — all of which contributes to competitive risk-adjusted returns. Our investment strategy has resulted in strong and stable investment returns, allowing us to provide financial security to our customers at their time of need — whether we’re paying their catastrophe claims, life insurance benefits or lifelong retirement income.
In 2019, we formally incorporated ESG factors into our investment management framework. We aligned our ESG Investment Policy with the Principles for Responsible Investment (PRI) supported by the United Nations. Specifically:
- Three of our four primary asset managers are PRI signatories. We are proactively encouraging our largest asset manager to become a PRI signatory.
- We and nearly all our asset managers have fully integrated ESG risks and opportunities into the investment decision-making process across our entire portfolio. Incorporating ESG screens into our investment analysis and decision-making process is designed to minimize investment risks while surfacing investment opportunities that are consistent with Horace Mann’s values, such as ethical conduct. In addition, we prohibit investments in gun manufacturers, given the negative societal impact guns have in our K-12 education community.
- We meet with our primary asset managers annually to discuss their ESG methodologies and how these are incorporated into their investment processes.
Within our investment portfolio, we hold $1.9 billion in responsible investments, up from $1.8 billion in 2018. Responsible investments provide societal and environmental benefits, while also generating a long-term sustainable return to benefit all stakeholders. The major categories include:
Responsible investment options for our customers
Horace Mann retirement plan sponsors and our educator customers now have access to multiple funds whose investment managers make decisions using ESG criteria – not solely on an investment’s potential economic returns. Strong performance on environmental sustainability, workplace diversity, supply chain integrity and other ESG factors is considered an indicator of future financial and social value.