But the most important thing is they gave us the earnings diversification that we planned for and certainly in 2023, that was important considering the state of the P&C industry across the board. So I’ll turn it over to Matt, but I want to say publicly that Matt Sharpe and his team are executing extremely well on all fronts, and we’re very pleased with the team and what this business has brought us. Matt?
Matt Sharpe: Thanks, Marita, and thanks, Matt, for the question. I’ll give you a little bit more color. So overall, as Maria said, we couldn’t be more pleased with the performance of the supplemental and Group Benefits segment, including all the team members that support it, both from a growth perspective and the earnings diversification. These businesses bring to Horace Mann as Murray that commented on, but not only are we happy with this year’s performance. We’re also very excited about the outlook of these businesses. We expect these to be among our fastest growing businesses over the next several years. Let me give you a little bit more color on our performance for the worksite direct sales team, which is our individual products division we grew the individual supplemental agent team by 23% in 2023.
The growth of the team directly correlates to our sales results. You can see this clearly in our production, more specifically, the agents we appointed over the last two years in 2022 and 2023 accounted for just south of 38% of our total sales in 2023. So in 2024, we continue to focus on the growth of this team and have added additional resources to sustain our momentum in that in the individual division worksite continued to make progress in cross-selling as well, contributing a modest 13% of the overall 2023 Horace Mann life sales. So we’re really just getting started there on the employer side of the business, Matt, we’re seeing similar results. The momentum in our growth business has started to show signs of acceleration. We continue to be really pleased with our distribution partners and how we align our mutual growth objectives couldn’t be tighter there.
The total number of covered lives increased over 6%. We introduced the Horace Mann voluntary group products to over 65 new school districts in the past year and across all lines of business in supplemental and group, we grew our covered lives by just under 50,000 participants, bringing the total lives that we cover as of December 31st of last year to just under 800,000 lives with our group products, core sales represented about 51% of our new sales in 2023. And the rest, we predominantly others who serve the community. Also, we also typically refer to it as other public looking ahead in 2024 and beyond, we continue to focus on expanding our benefit broker and consultant relationships to maintain our growth momentum. So overall, very happy with our results for 23, very excited by the growth prospects for 24 and beyond as we expand our distribution relationships and further our cross-sell capabilities.
And that kind of gives you the color that I think you were looking for. Is there a follow-up?
Matt Carletti: No, that’s great. Thank you, both. The only follow-up is a numbers question, which I think is for Bret. I’m really just trying to understand kind of what’s in a number that gets reported. So in the in the supplemental benefits segment, there’s like other income that’s been you’re negative for, but not big number small number, but negative for a couple of years. It’s getting to be a smaller negative. It’s kind of trailing off. And just trying to understand, you know, what’s in there? What’s flowing through? And how should we think about that going forward?
Bret Conklin: Sure, Matt, this is Brad. Obviously, there is a nuance with an item that does flow through the P&L in that line item. But to be specific under the terms of the sale of Madison national, we did agree to assume a block of run-off specialty health business for IHC, which was their former parent company and IHC, in turn, basically agreed to indemnify us for that block covering any loss or gain. So obviously the premiums the losses, the expenses flow through the P&L, as you would expect them to. However, and they have had underwriting profits the last two years since we’ve owned them in, in essence, it’s a zero-sum game as we’re being indemnified good or bad of the results. And it’s really that offset since they had income in underwriting income.
We offset that by booking and expense in the other income line item that is in a runoff as state. So that will continue to become smaller as we get to 24 and beyond. So I guess the key takeaway, Matt, is it is a zero-sum game. There is no P&L impact as it relates to that. But the geography is a little different. And like I said, it will it will run off over time.
Matt Carletti: Perfect. Very helpful. That makes sense.
Marita Zuraitis: Yes, Matt, we really appreciate your worksite question. And to recap that, when you think about it with P & C on track to get back to historic profitability for us. Our L&R business producing consistent earnings and the ballast that it’s been for decades combined with the supplemental and Group Benefits diversification benefit, strong positive earnings contribution. And then you look at sales momentum across the board. We enter 2024 in a very optimistic place about the earnings power of this Company going forward.
Matt Carletti: Understood. Thank you very much for the color for you at Snap. Thank you.
Operator: Thank you. The next question is from John Barnidge with Piper Sandler. Please go ahead.
John Barnidge: Good morning. Thank you for the opportunity. With the improved property casualty outlook, it suggests generating excess capital prospectively. Should we be thinking about more active share repurchases again? Or how do you think about the inorganic or product development opportunity set within the Company given the growth outside of the traditional educator?
Marita Zuraitis: Yes, a good question. I don’t think our capital management approach has changed, right. We think about using the capital that we’re generating. And remembering remember this year, we returned to more positive capital generation. First uses for growth. I mean, you saw the growth in the fourth quarter, we’re optimistic about the group growth growth that we planned for 2024. So having a positive excess capital generation of these businesses and the power that we see to use that for growth first priority and excited about being back in that position. Again, then we think about and, you know, uses like share repurchases, which we have done consistently in the past as well. I don’t know if you have anything to add to that, Bret?
Bret Conklin: Yes, I think Marie, to summarize it well, first and foremost, it’s profitable growth. And I would say, first and foremost, it’s returning the P and C segment to profitability and generating that typical level of excess capital. I think Ryan and I probably have repeated on numerous calls when we are operating at our targeted profit levels and we will generate $50 million of excess capital on top of the dividends that we pay so we feel very good what we see with the turnaround in the P&C segments. It’s in our investor presentation, the delta between the loss of this year in the income of next year. That is the lever of our increase in our earnings for this year. So I would echo the same thing. The priorities for that excess capital remain unchanged.
John Barnidge: Thank you for that. My follow-up question, you talked about being on track to reach sustainable double-digit ROE by 2025 with outlook for 2024 EPS 303 to 330 and then your adjusted book value, does that suggest while returning to an earnings power approaching $4 again?
Bret Conklin: Yes, John, I think you’re spot on with respect to that.
Marita Zuraitis: No doubt about it your math.
Bret Conklin: Yes, we’re going to present to you.
John Barnidge: Yes. Thank you.
Operator: Your next question is from Greg Peters with Raymond James. Please go ahead.
Greg Peters: Hey, good morning. This is Sid on for Greg. I wanted to focus on the PIP count in the P&C segment. I believe in your prepared remarks you mentioned auto quotes were up 15% and just with your combined ratio guidance of around 100%. Can you help frame how we should think about growth in policy counts moving forward from here?
Marita Zuraitis: Yes, I don’t think I said, I don’t think it ever changes for us, right? We are not the type of company that thinks about a growth lever is on or off. We’re not the type of company that’s going to close down or say we’re open. We clearly have targets. We’re happy that the majority by a lot, 95% of new business right now is coming from places where we feel we can achieve and sustain that target profitability that we have and clearly stated and demonstrated. So for us, we like the fact that we saw strong momentum in both PIP and premium in the fourth quarter and are very optimistic about our ability to grow that P&C line in 2024 and beyond. But we really don’t again think about this as an on on-off off switch and go back to that original question about third parties, clearly in places where it makes sense for us to rely on good third party partners, we can and we will.
But we’re always thinking about attracting and retaining new educator and other to serve the community customers.
Greg Peters: All right. Thanks for the answer.
Marita Zuraitis: Thank you.
Operator: Thank you. This concludes our question and answer session. I would now like to turn the call back to Heather Wietzel for closing remarks.
Heather Wietzel: Thank you, everyone, for joining us on the call today, and I look forward to additional conversations if anyone has any follow-up questions and do want to remind everyone, we will be at Eva and happy to work with you on scheduling, some tons out of that can be busy. And so just reach out or if you’re not going to be there are your schedules full reach out we’ll find another time to get together. So thank you again.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
