Kemper Corporation (NYSE: KMPR) reported net income of $97.4
million, or $1.51 per diluted share, for the fourth quarter of
2024, compared to net income of $51.4 million, or $0.80 per diluted
share, for the fourth quarter of 2023.
Adjusted Consolidated Net Operating Income1 was $115.1 million,
or $1.78 per diluted share, for the fourth quarter of 2024,
compared to Adjusted Consolidated Net Operating Income1 of $50.5
million, or $0.78 per diluted share, for the fourth quarter of
2023.
Key themes of the quarter include:
- Delivered another quarter of strong operating and financial
results
- Generated a 14.0% ROE and a 21.4% Adjusted ROE1 for the
quarter; 11.9% and 18.3%, respectively, for FY’24
- Specialty P&C achieved 5.1% YoY (1.8% QoQ) PIF growth;
91.5% annual underlying combined ratio1 (91.7% quarterly)
- Life business continued to generate strong return on capital
and distributable cash flows
- Parent liquidity remains strong at $1.3 billion; repurchased
~$14 million of stock, increased quarterly dividend, and retiring
$450 million of senior notes due February 2025
“I’m pleased to report that we delivered very strong results for
the year and even stronger results for the quarter,” said Joseph P.
Lacher, Jr., President and CEO. “Our core businesses are performing
very well, led by Specialty Auto’s operating results including
solid policies in force growth and an underlying combined ratio
outperforming long-term expectations. We further strengthened our
balance sheet, providing us with ongoing financial flexibility. Our
competitive advantages position us very well to continue to meet
the needs of our underserved markets, grow our business, and
deliver strong financial results.”
*Unless otherwise specified, discussion of
our fourth quarter 2024 results is focused on net income
attributable to Kemper Corporation common shareholders, which does
not include financial results from Kemper Reciprocal that are
presented within the condensed consolidated financial results in
this release. The results of Kemper Reciprocal are consolidated
under US GAAP.
1Non-GAAP financial measure. All Non-GAAP
financial measures are denoted with footnote 1 throughout this
release. See “Use of Non-GAAP Financial Measures” for additional
information.
Three Months Ended
Year Ended
(Dollars in Millions, Except Per Share
Amounts) (Unaudited)
Dec 31, 2024
Dec 31, 2023
Dec 31, 2024
Dec 31, 2023
Net Income (Loss)
$
97.4
$
51.4
$
317.8
$
(272.1
)
Adjusted Consolidated Net Operating Income
(Loss)1
$
115.1
$
50.5
$
381.5
$
(47.2
)
Impact of Catastrophe Losses and Related
Loss Adjustment Expense (LAE) on Net Income (Loss)
$
(4.3
)
$
(8.3
)
$
(51.6
)
$
(76.4
)
Diluted Net Income (Loss) Per Share
From:
Net Income (Loss)
$
1.51
$
0.80
$
4.91
$
(4.25
)
Adjusted Consolidated Net Operating Income
(Loss)1
$
1.78
$
0.78
$
5.89
$
(0.74
)
Impact of Catastrophe Losses and Related
LAE on Net Income (Loss) Per Share
$
(0.07
)
$
(0.16
)
$
(0.80
)
$
(1.51
)
Revenues
Total revenues for the fourth quarter of 2024 decreased $0.4
million to $1,186.8 million compared to the fourth quarter of 2023
that included an $82.4 million reduction in earned premium from our
Non-Core Operations, due primarily to lower volumes resulting from
the exit and run-off of the Preferred Insurance business, offset by
an $89.2 million increase in Specialty Property & Casualty
Insurance earned premiums resulting from higher new business
volumes and higher average earned premium per exposure from rate
increases.
Segment Results
Unless otherwise noted, (i) the segment results discussed below
are presented on an after-tax basis, (ii) prior-year development
includes both catastrophe and non-catastrophe losses and LAE, (iii)
catastrophe losses and LAE exclude the impact of prior-year
development, (iv) loss ratio includes loss and LAE, and (v) all
comparisons are made to the prior year quarter unless otherwise
stated.
Three Months Ended
Year Ended
(Dollars in Millions) (Unaudited)
Dec 31, 2024
Dec 31, 2023
Dec 31, 2024
Dec 31, 2023
Segment Adjusted Net Operating Income
(Loss):
Specialty Property & Casualty
Insurance
$
101.2
$
45.3
$
376.3
$
(57.1
)
Life Insurance
23.5
15.0
50.2
51.8
Total Segment Adjusted Net Operating
Income
124.7
60.3
426.5
(5.3
)
Corporate and Other Adjusted Net Operating
Loss
(11.3
)
(9.9
)
(50.3
)
(42.1
)
Less: Net Loss attributable to
Noncontrolling Interest
(1.7
)
(0.1
)
(5.3
)
(0.2
)
Adjusted Consolidated Net Operating Income
(Loss)1
115.1
50.5
381.5
(47.2
)
Net Income (Loss) From:
Change in Fair Value of Equity and
Convertible Securities
(2.0
)
(1.8
)
(2.1
)
3.7
Net Realized Investment Gains (Losses)
3.1
15.6
10.4
(14.7
)
Impairment Losses
(1.6
)
(1.0
)
(4.6
)
(0.9
)
Acquisition and Disposition Related
Transaction, Integration, Restructuring and Other Costs
(7.5
)
(14.4
)
(31.8
)
(95.0
)
Debt Extinguishment, Pension Settlement
and Other Charges
(7.3
)
—
(7.4
)
(55.5
)
Goodwill Impairment Charge
—
—
—
(45.5
)
Non-Core Operations
(2.4
)
2.5
(28.2
)
(17.0
)
Net Income (Loss) attributable to Kemper
Corporation
$
97.4
$
51.4
$
317.8
$
(272.1
)
The Specialty Property and Casualty Insurance segment reported
adjusted net operating income of $101.2 million for the fourth
quarter of 2024, compared to adjusted net operating income of $45.3
million in the fourth quarter of 2023. This increase was due
primarily to an improvement in the Underlying Combined Ratio1. The
segment’s Underlying Combined Ratio1 was 91.7 percent compared to
98.2 percent in the fourth quarter of 2023. The improvement was
primarily driven by higher average earned premiums per exposure
resulting from rate increases and lower underlying claim
frequency.
The Life Insurance segment reported adjusted net operating
income of $23.5 million for the fourth quarter of 2024, compared to
adjusted net operating income of $15.0 million in the fourth
quarter of 2023, primarily driven by favorable mortality experience
from life insurance products.
Capital
Total Kemper Corporation Shareholders’ Equity as of December 31,
2024 was $2,788.4 million, an increase of $283.2 million, or 11
percent, since year-end 2023 primarily driven by net income for the
year. Kemper and its direct non-insurance subsidiaries ended the
quarter with cash and investments of $547.6 million, and $512.0
million of available borrowing capacity under the revolving credit
agreement.
On November 7, 2024, Kemper announced that its Board of
Directors declared a quarterly dividend of $0.31 per share, or
$20.0 million. The dividend was paid on December 4, 2024, to its
shareholders of record as of November 18, 2024.
Kemper ended the year with a book value per share of $43.68, an
increase of 12 percent from $39.08 at the end of 2023. Adjusted
book value per share1 was $29.04 at the end of the year, compared
to $25.39 at the end of 2023.
Unaudited Condensed Consolidated Statements of Income (Loss)
for the three months and year ended December 31, 2024 and 2023 are
presented below.
Three Months Ended
Year Ended
(Dollars in Millions, Except Per Share
Amounts)
Dec 31, 2024
Dec 31, 2023
Dec 31, 2024
Dec 31, 2023
Revenues:
Earned Premiums1
$
1,081.8
$
1,063.8
$
4,215.9
$
4,529.4
Net Investment Income
103.0
104.6
407.5
419.7
Change in Value of Alternative Energy
Partnership Investments
0.8
0.6
2.3
2.9
Other Income
1.8
1.9
8.2
7.2
Change in Fair Value of Equity and
Convertible Securities
(2.6
)
(2.2
)
(2.7
)
4.7
Net Realized Investment Gains (Losses)
4.0
19.7
13.2
(18.6
)
Impairment Losses
(2.0
)
(1.2
)
(5.8
)
(1.1
)
Total Revenues
1,186.8
1,187.2
4,638.6
4,944.2
Expenses:
Policyholders’ Benefits and Incurred
Losses and Loss Adjustment Expenses2
743.4
808.1
3,013.1
3,820.0
Insurance and Other Expenses
309.5
301.7
1,180.1
1,365.6
Interest Expense
14.6
13.9
56.9
56.1
Goodwill Impairment
—
—
—
49.6
Total Expenses
1,067.5
1,123.7
4,250.1
5,291.3
Income (Loss) before Income Taxes
119.3
63.5
388.5
(347.1
)
Income Tax Expense (Benefit)
23.6
12.2
76.0
(74.8
)
Net Income (Loss)
95.7
51.3
312.5
(272.3
)
Less: Net Loss attributable to
Noncontrolling Interest
(1.7
)
(0.1
)
(5.3
)
(0.2
)
Net Income (Loss) attributable to Kemper
Corporation
$
97.4
$
51.4
$
317.8
$
(272.1
)
Net Income (Loss) attributable to
Kemper Corporation per Unrestricted Share:
Basic
$
1.52
$
0.80
$
4.95
$
(4.25
)
Diluted
$
1.51
$
0.80
$
4.91
$
(4.25
)
Weighted-average Outstanding (Shares in
Thousands):
Unrestricted Shares - Basic
63,858.6
64,088.3
64,179.5
64,025.6
Unrestricted Shares and Equivalent Shares
- Diluted
64,631.8
64,566.0
64,776.0
64,025.6
Dividends Paid to Shareholders per
Share
$
0.31
$
0.31
$
1.24
$
1.24
1 Includes a remeasurement loss related to
the deferred profit liability within the Life Insurance business of
$6.0 million and $7.2 million for the three months and year ended
December 31, 2024, respectively, and a remeasurement loss of $17.3
million and $19.1 million for the three months and year ended
December 31, 2023, respectively.
2 Includes a remeasurement gain related to
the liability for future policyholder benefits within the Life
Insurance business of $16.5 million and $19.2 million for the three
months and year ended December 31, 2024, respectively, and a
remeasurement gain of $27.2 million and $30.3 million for the three
months and year ended December 31, 2023, respectively.
Unaudited business segment revenues for the three months and
year ended December 31, 2024 and 2023 are presented below.
Three Months Ended
Year Ended
(Dollars in Millions)
Dec 31, 2024
Dec 31, 2023
Dec 31, 2024
Dec 31, 2023
REVENUES:
Specialty Property & Casualty
Insurance:
Earned Premiums:
Personal Automobile
$
753.3
$
699.3
$
2,851.4
$
2,977.8
Commercial Automobile
201.5
166.3
725.0
654.7
Total Earned Premiums
954.8
865.6
3,576.4
3,632.5
Net Investment Income
49.9
42.6
189.6
168.3
Change in Value of Alternative Energy
Partnership Investments
0.6
0.3
1.4
1.6
Other Income
0.9
1.3
4.7
4.5
Total Specialty Property & Casualty
Insurance Revenues
1,006.2
909.8
3,772.1
3,806.9
Life Insurance:
Earned Premiums:
Life1
78.9
67.3
328.1
319.2
Accident & Health
5.5
5.6
22.3
23.1
Property
10.8
11.1
43.5
45.3
Total Earned Premiums
95.2
84.0
393.9
387.6
Net Investment Income
45.5
47.1
170.6
193.4
Change in Value of Alternative Energy
Partnership Investments
0.2
0.1
0.6
0.7
Other Income (Loss)
0.2
0.2
0.5
(0.2
)
Total Life Insurance Revenues
141.1
131.4
565.6
581.5
Total Segment Revenues
1,147.3
1,041.2
4,337.7
4,388.4
Change in Fair Value of Equity and
Convertible Securities
(2.6
)
(2.2
)
(2.7
)
4.7
Net Realized Investment Gains (Losses)
4.0
19.7
13.2
(18.6
)
Net Impairment Losses Recognized in
Earnings
(2.0
)
(1.2
)
(5.8
)
(1.1
)
Non-Core Operations
37.6
126.7
282.4
558.4
Other Income
2.5
3.0
13.8
12.4
Total Revenues
$
1,186.8
$
1,187.2
$
4,638.6
$
4,944.2
1 Earned premiums were impacted by changes
in deferred profit liability related to the annual review and
assumptions update under LDTI that decreased earned premiums by
$4.8 million in the fourth quarter and full year 2024 and decreased
earned premiums by $15.0 million in the fourth quarter and full
year 2023.
KEMPER CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars in Millions)
(Unaudited)
Dec 31, 2024
Dec 31, 2023
Assets:
Investments:
Fixed Maturities at Fair Value
$
6,409.6
$
6,881.9
Equity Securities at Fair Value
218.5
225.8
Equity Method Limited Liability
Investments
186.3
221.7
Alternative Energy Partnership
Investments
17.6
17.3
Short-term Investments at Cost which
Approximates Fair Value
1,037.1
520.9
Company-Owned Life Insurance
539.2
513.5
Loans to Policyholders
280.7
281.2
Other Investments
199.5
241.9
Total Investments
8,888.5
8,904.2
Cash
64.4
64.1
Receivables from Policyholders
977.9
959.5
Other Receivables
185.7
200.5
Deferred Policy Acquisition Costs
628.9
591.6
Goodwill
1,250.7
1,250.7
Current Income Tax Assets
63.4
64.5
Deferred Income Tax Assets
93.3
210.4
Other Assets
436.1
492.6
Assets of Consolidated Variable Interest
Entity
Fixed Maturities at Fair Value
1.7
1.7
Short-term Investments at Cost which
Approximates Fair Value
28.0
2.0
Receivables from Policyholders
8.2
0.7
Deferred Policy Acquisition Costs
1.1
0.1
Deferred Income Tax Assets
1.5
—
Other Assets
—
0.1
Total Assets
$
12,630.4
$
12,742.7
KEMPER CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS (Continued)
(Dollars in Millions)
(Unaudited)
Dec 31, 2024
Dec 31, 2023
Liabilities and Shareholders’
Equity:
Insurance Reserves:
Life & Health
$
3,199.7
$
3,422.4
Property & Casualty
2,611.9
2,680.5
Total Insurance Reserves
5,811.6
6,102.9
Unearned Premiums
1,264.1
1,300.8
Policyholder Obligations
637.7
655.7
Deferred Income Tax Liabilities
14.8
50.6
Accrued Expenses and Other Liabilities
705.2
737.7
Long-term Debt, Current, at Amortized
Cost
449.9
—
Long-term Debt, Non-current, at Amortized
Cost
941.7
1,389.2
Liabilities of Consolidated Variable
Interest Entity
Insurance Reserves
9.4
—
Unearned Premiums
11.2
0.5
Accrued Expenses and Other Liabilities
0.5
0.3
Total Liabilities
9,846.1
10,237.7
Kemper Corporation Shareholders’
Equity:
Common Stock
6.4
6.4
Paid-in Capital
1,854.9
1,845.3
Retained Earnings
1,231.6
1,014.3
Accumulated Other Comprehensive Loss
(304.5
)
(360.8
)
Total Kemper Corporation Shareholders’
Equity
2,788.4
2,505.2
Noncontrolling Interest
(4.1
)
(0.2
)
Total Shareholders’ Equity
2,784.3
2,505.0
Total Liabilities and Shareholders’
Equity
$
12,630.4
$
12,742.7
Unaudited selected financial information for the Specialty
Property & Casualty Insurance segment follows.
Three Months Ended
Year Ended
(Dollars in Millions)
Dec 31, 2024
Dec 31, 2023
Dec 31, 2024
Dec 31, 2023
Results
of Operations
Net Premiums Written
$
948.9
$
719.7
$
3,685.4
$
3,305.4
Earned Premiums
$
954.8
$
865.6
$
3,576.4
$
3,632.5
Net Investment Income
49.9
42.6
189.6
168.3
Change in Value of Alternative Energy
Partnership Investments
0.6
0.3
1.4
1.6
Other Income
0.9
1.3
4.7
4.5
Total Revenues
1,006.2
909.8
3,772.1
3,806.9
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE
668.8
673.1
2,514.8
2,974.5
Catastrophe Losses and LAE
1.9
2.5
19.9
34.5
Prior Years:
Non-catastrophe Losses and LAE
1.9
(0.2
)
6.3
135.2
Catastrophe Losses and LAE
(0.1
)
0.1
0.7
(2.3
)
Total Incurred Losses and LAE
672.5
675.5
2,541.7
3,141.9
Insurance Expenses
207.0
177.7
759.5
741.3
Segment Adjusted Operating Income
(Loss)
126.7
56.6
470.9
(76.3
)
Income Tax Expense (Benefit)
25.5
11.3
94.6
(19.2
)
Total Segment Adjusted Net Operating
Income (Loss)
$
101.2
$
45.3
$
376.3
$
(57.1
)
Ratios
Based On Earned Premiums
Current Year Non-catastrophe Losses and
LAE Ratio
70.0
%
77.7
%
70.3
%
82.0
%
Current Year Catastrophe Losses and LAE
Ratio
0.2
0.3
0.6
0.9
Prior Years Non-catastrophe Losses and LAE
Ratio
0.2
—
0.2
3.7
Prior Years Catastrophe Losses and LAE
Ratio
—
—
—
(0.1
)
Total Incurred Loss and LAE Ratio
70.4
78.0
71.1
86.5
Insurance Expense Ratio
21.7
20.5
21.2
20.4
Combined Ratio
92.1
%
98.5
%
92.3
%
106.9
%
Underlying Combined Ratio1
Current Year Non-catastrophe Losses and
LAE Ratio
70.0
%
77.7
%
70.3
%
82.0
%
Insurance Expense Ratio
21.7
20.5
21.2
20.4
Underlying Combined Ratio1
91.7
%
98.2
%
91.5
%
102.4
%
Non-GAAP
Measure Reconciliation
Combined Ratio
92.1
%
98.5
%
92.3
%
106.9
%
Less:
Current Year Catastrophe Losses and LAE
Ratio
0.2
0.3
0.6
0.9
Prior Years Non-catastrophe Losses and LAE
Ratio
0.2
—
0.2
3.7
Prior Years Catastrophe Losses and LAE
Ratio
—
—
—
(0.1
)
Underlying Combined Ratio1
91.7
%
98.2
%
91.5
%
102.4
%
Unaudited selected financial information for the Life
Insurance segment follows.
Three Months Ended
Year Ended
(Dollars in Millions)
Dec 31, 2024
Dec 31, 2023
Dec 31, 2024
Dec 31, 2023
Results
of Operations
Earned Premiums
$
95.2
$
84.0
$
393.9
$
387.6
Net Investment Income
45.5
47.1
170.6
193.4
Change in Value of Alternative Energy
Partnership Investments
0.2
0.1
0.6
0.7
Other Income (Loss)
0.2
0.2
0.5
(0.2
)
Total Revenues
141.1
131.4
565.6
581.5
Policyholders’ Benefits and Incurred
Losses and LAE
43.5
40.5
234.5
243.4
Insurance Expenses
69.2
71.0
272.1
275.8
Segment Adjusted Operating Income
28.4
19.9
59.0
62.3
Income Tax Expense
4.9
4.9
8.8
10.5
Total Segment Adjusted Net Operating
Income
$
23.5
$
15.0
$
50.2
$
51.8
Use of Non-GAAP Financial Measures
Adjusted Consolidated Net Operating Income
(Loss)1 is an after-tax, non-GAAP financial measure and is
computed by excluding from Net Income (Loss) attributable to Kemper
Corporation the after-tax impact of:
(i) Change in Fair Value of Equity and
Convertible Securities; (ii) Net Realized Investment Gains
(Losses); (iii) Impairment Losses; (iv) Acquisition and Disposition
Related Transaction, Integration, Restructuring and Other Costs;
(v) Debt Extinguishment, Pension Settlement and Other Charges; (vi)
Goodwill Impairment Charges; (vii) Non-Core Operations; and (viii)
Significant non-recurring or infrequent items that may not be
indicative of ongoing operations
Significant non-recurring items are excluded when (a) the nature
of the charge or gain is such that it is reasonably unlikely to
recur within two years, and (b) there has been no similar charge or
gain within the prior two years. The most directly comparable GAAP
financial measure is Net Income (Loss) attributable to Kemper
Corporation. There were no applicable significant non-recurring
items that Kemper excluded from the calculation of Adjusted
Consolidated Net Operating Income (Loss)1 for the three months and
year ended December 31, 2024 or 2023.
Kemper believes that Adjusted Consolidated Net Operating Income
(Loss)1 provides investors with a valuable measure of its ongoing
performance because it reveals underlying operational performance
trends that otherwise might be less apparent if the items were not
excluded. Change in Fair Value of Equity and Convertible
Securities, Net Realized Investment Gains (Losses) and Impairment
Losses related to investments included in Kemper’s results may vary
significantly between periods and are generally driven by business
decisions and external economic developments such as capital market
conditions that impact the values of Kemper’s investments, the
timing of which is unrelated to the insurance underwriting process.
Acquisition and Disposition Related Transaction, Integration,
Restructuring and Other Costs may vary significantly between
periods and are generally driven by the timing of acquisitions and
business decisions which are unrelated to the insurance
underwriting process. Debt Extinguishment, Pension Settlement and
Other Charges relate to (i) loss from early extinguishment of debt,
which is driven by Kemper’s financing and refinancing decisions and
capital needs, as well as external economic developments such as
debt market conditions, the timing of which is unrelated to the
insurance underwriting process; (ii) settlement of pension plan
obligations which are business decisions made by Kemper, the timing
of which is unrelated to the underwriting process; and (iii) other
charges that are non-standard, not part of the ordinary course of
business, and unrelated to the insurance underwriting process.
Goodwill Impairment Charges are excluded because they are
infrequent and non-recurring charges. Non-Core Operations includes
the results of our Preferred Insurance business which we expect to
fully exit. These results are excluded because they are irrelevant
to our ongoing operations and do not qualify for Discontinued
Operations under Generally Accepted Accounting Principles ("GAAP").
Significant non-recurring items are excluded because, by their
nature, they are not indicative of Kemper’s business or economic
trends. The preceding non-GAAP financial measures should not be
considered a substitute for the comparable GAAP financial measures,
as they do not fully recognize the profitability of Kemper’s
businesses.
A reconciliation of Net Income (Loss) attributable to Kemper
Corporation to Adjusted Consolidated Net Operating Income (Loss)1
for the three months and year ended December 31, 2024 and 2023 is
presented below.
Three Months Ended
Year Ended
(Dollars in Millions) (Unaudited)
Dec 31, 2024
Dec 31, 2023
Dec 31, 2024
Dec 31, 2023
Net Income (Loss) attributable to Kemper
Corporation
$
97.4
$
51.4
$
317.8
$
(272.1
)
Less Net (Loss) Income From:
Change in Fair Value of Equity and
Convertible Securities
(2.0
)
(1.8
)
(2.1
)
3.7
Net Realized Investment Gains (Losses)
3.1
15.6
10.4
(14.7
)
Impairment Losses
(1.6
)
(1.0
)
(4.6
)
(0.9
)
Acquisition and Disposition Related
Transaction, Integration, Restructuring and Other Costs
(7.5
)
(14.4
)
(31.8
)
(95.0
)
Debt Extinguishment, Pension Settlement
and Other Charges
(7.3
)
—
(7.4
)
(55.5
)
Goodwill Impairment Charge
—
—
—
(45.5
)
Non-Core Operations
(2.4
)
2.5
(28.2
)
(17.0
)
Adjusted Consolidated Net Operating Income
(Loss)1
$
115.1
$
50.5
$
381.5
$
(47.2
)
Diluted Adjusted Net Operating Income
(Loss) per Unrestricted Share1 is a non-GAAP financial
measure computed by dividing Adjusted Net Operating Income (Loss)1
attributed to unrestricted shares by the weighted-average
unrestricted shares and equivalent shares outstanding. The most
directly comparable GAAP financial measure is Diluted Net Loss per
Unrestricted Share.
A reconciliation of Diluted Net Income (Loss) per Unrestricted
Share to Diluted Adjusted Net Operating Income (Loss) per
Unrestricted Share1 for the three months and year ended December
31, 2024 and 2023 is presented below.
Three Months Ended
Year Ended
(Unaudited)
Dec 31, 2024
Dec 31, 2023
Dec 31, 2024
Dec 31, 2023
Diluted Net Income (Loss) attributable to
Kemper Corporation per Unrestricted Share
$
1.51
$
0.80
$
4.91
$
(4.25
)
Less Net (Loss) Income per Unrestricted
Share From:
Change in Fair Value of Equity and
Convertible Securities
(0.03
)
(0.03
)
(0.03
)
0.06
Net Realized Investment Gains (Losses)
0.06
0.24
0.18
(0.23
)
Impairment Losses
(0.03
)
(0.01
)
(0.08
)
(0.01
)
Acquisition and Disposition Related
Transaction, Integration, Restructuring and Other Costs
(0.12
)
(0.22
)
(0.50
)
(1.49
)
Debt Extinguishment, Pension Settlement
and Other Charges
(0.11
)
—
(0.11
)
(0.87
)
Goodwill Impairment Charge
—
—
—
(0.71
)
Non-Core Operations
(0.04
)
0.04
(0.44
)
(0.26
)
Diluted Adjusted Net Operating Income
(Loss) per Unrestricted Share1
$
1.78
$
0.78
$
5.89
$
(0.74
)
Return on Adjusted Shareholders'
Equity1 is a calculation that uses a non-GAAP financial
measure. It is calculated by dividing the period’s net income
attributable to Kemper Corporation by the average shareholders’
equity excluding net unrealized gains and losses on fixed
maturities, the change in discount rate on future life policyholder
benefits and goodwill. Return on Shareholders’ Equity is the most
directly comparable GAAP measure. We use this non-GAAP measure to
identify and analyze the change in performance attributable to
management efforts between periods. Kemper believes this non-GAAP
financial measure is useful to investors because it eliminates the
effect of items that can fluctuate significantly from period to
period and are generally driven by economic developments, primarily
capital market conditions, the magnitude and timing of which are
not influenced by management. Kemper believes it enhances
understanding and comparability of performance by highlighting
underlying business activity and profitability drivers. The “Return
on Adjusted Shareholders’ Equity” metric was referred to as “Return
on Tangible Shareholders’ Equity” in prior periods.
A reconciliation of Return on Shareholders’ Equity to Return on
Adjusted Shareholders’ Equity1 is presented below:
Three Months Ended
Year Ended
(Dollars in Millions) (Unaudited)
Dec 31, 2024
Dec 31, 2023
Dec 31, 2024
Dec 31, 2023
Numerator:
Annualized Net Income (Loss) attributable
to Kemper Corporation
$
389.6
$
205.6
$
317.8
$
(272.1
)
Denominator:
Average Shareholders' Equity2
$
2,780.9
$
2,433.3
$
2,665.6
$
2,539.2
Less: Average Net Unrealized Losses on
Fixed Maturities
576.1
716.9
598.1
673.1
Less: Average Change in Discount Rate on
Future Life Policyholder Benefits
(286.6
)
(286.7
)
(272.8
)
(232.6
)
Less: Average Goodwill
(1,250.7
)
(1,250.7
)
(1,250.7
)
(1,270.5
)
Average Adjusted Shareholders' Equity2
$
1,819.7
$
1,652.8
$
1,740.2
$
1,709.2
Return on
Shareholders' Equity:
Return on Shareholders' Equity
14.0
%
8.4
%
11.9
%
(10.7
)%
Return on Adjusted Shareholders'
Equity1
21.4
%
12.7
%
18.3
%
(15.9
)%
2 Average shareholders' equity and average
adjusted shareholders’ equity for the three months and year ended
is the simple average of the beginning and ending balances for the
period. Average shareholders’ equity and average adjusted
shareholders’ equity on a year-to-date basis is the (a) the sum of
the balance at the beginning of the year and the ending balance for
each quarter within that year divided by (b) the number of quarters
in the period presented plus one.
Underlying Combined Ratio1 is a
non-GAAP financial measure. It is computed by adding the Current
Year Non-catastrophe Losses and LAE Ratio with the Insurance
Expense Ratio. The most directly comparable GAAP financial measure
is the Combined Ratio, which is computed by adding Total Incurred
Losses and LAE Ratio, including the impact of catastrophe losses
and loss and LAE reserve development from prior years, with the
Insurance Expense Ratio.
Kemper believes Underlying Losses and LAE and the Underlying
Combined Ratio are useful to investors and uses these financial
measures to reveal the trends in Kemper’s Property & Casualty
Insurance segment that may be obscured by catastrophe losses and
prior-year reserve development. These catastrophe losses may cause
Kemper’s loss trends to vary significantly between periods as a
result of their incidence of occurrence and magnitude and can have
a significant impact on incurred losses and LAE and the Combined
Ratio. Prior-year reserve developments are caused by unexpected
loss development on historical reserves. Because reserve
development relates to the re-estimation of losses from earlier
periods, it has no bearing on the performance of Kemper’s insurance
products in the current period. Kemper believes it is useful for
investors to evaluate these components separately and in the
aggregate when reviewing Kemper’s underwriting performance.
Adjusted Book Value Per Share1 is a
calculation that uses a non-GAAP financial measure. It is
calculated by dividing shareholders’ equity after excluding the
after-tax impact of net unrealized gains and losses on fixed income
securities, the change in discount rate on future life policyholder
benefits and goodwill by total Common Shares Issued and
Outstanding. Book value per share is the most directly comparable
GAAP financial measure. Kemper uses the trends in book value per
share excluding the after-tax impact of net unrealized gains and
losses on fixed income securities, the change in discount rate on
future life policyholder benefits and goodwill in conjunction with
book value per share to identify and analyze the change in net
worth excluding goodwill attributable to management efforts between
periods. Kemper believes the non-GAAP financial measure is useful
to investors because it eliminates the effect of items that can
fluctuate significantly from period to period and are generally
driven by economic developments, primarily capital market
conditions, the magnitude and timing of which are not influenced by
management. Kemper believes it enhances understanding and
comparability of performance by highlighting underlying business
activity and profitability drivers. The “Adjusted Book Value Per
Share” metric was referred to as “Tangible Book Value Per Share” in
prior periods.
A reconciliation of Book Value Per Share to Adjusted Book Value
Per Share1 is presented below:
As of
(Dollars and Shares in Millions Except Per
Share Amounts) (Unaudited)
Dec 31, 2024
Dec 31, 2023
Numerator:
Kemper Corporation Shareholders’
Equity
$
2,788.4
$
2,505.2
Less: Net Unrealized Losses on Fixed
Maturities
696.5
533.8
Less: Change in Discount Rate on Future
Life Policyholder Benefits
(380.3
)
(160.6
)
Less: Goodwill
(1,250.7
)
(1,250.7
)
Adjusted Shareholders’ Equity
$
1,853.9
$
1,627.7
Denominator:
Common Shares Issued and Outstanding
63.840
64.112
Book Value Per
Share:
Book Value Per Share
$
43.68
$
39.08
Less: Net Unrealized Losses on Fixed
Maturities
10.91
8.33
Less: Change in Discount Rate on Future
Life Policyholder Benefits
(5.96
)
(2.51
)
Less: Goodwill
(19.59
)
(19.51
)
Adjusted Book Value Per Share1
$
29.04
$
25.39
Conference Call
Kemper will host its conference call to discuss fourth quarter
2024 results on Wednesday, February 5, at 5:00 p.m. Eastern (4:00
p.m. Central). The conference call will be accessible via the
internet and by telephone at 888.259.6580, Conference ID
79586. To listen via webcast, register online at the investor
section of kemper.com at least 15 minutes prior to the webcast to
download and install any necessary software. A replay of the call
will be available online at the investor section of kemper.com.
More detailed financial information can be found in Kemper’s
Investor Financial Supplement and Earnings Call Presentation for
the fourth quarter of 2024, which is available at the investor
section of kemper.com.
About Kemper
The Kemper family of companies is one of the nation’s leading
specialized insurers. With approximately $13 billion in assets,
Kemper is improving the world of insurance by providing affordable
and easy-to-use personalized solutions to individuals, families and
businesses through its Kemper Auto and Kemper Life brands. Kemper
serves over 4.7 million policies, is represented by approximately
22,200 agents and brokers, and has approximately 7,400 associates
dedicated to meeting the ever-changing needs of its customers.
Learn more about Kemper at kemper.com.
Caution Regarding Forward-Looking Statements
This press release may contain or incorporate by reference
information that includes or is based on forward-looking statements
within the meaning of the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. We caution investors that
these forward-looking statements are not guarantees of future
performance, and actual results may differ materially. Such
statements involve known and unknown risks, uncertainties, and
other factors, including but not limited to:
- changes in the frequency and severity of insurance claims;
- claim development and the process of estimating claim
reserves;
- the impacts of inflation;
- changes in the interest rate environment;
- supply chain disruption;
- product demand and pricing;
- effects of governmental and regulatory actions;
- litigation outcomes and trends;
- investment risks;
- cybersecurity risks or incidents;
- impact of catastrophes; and
- other risks and uncertainties detailed in Kemper’s Annual
Report on Form 10-K and subsequent filings with the Securities and
Exchange Commission (“SEC”).
Kemper assumes no obligation to publicly correct or update any
forward-looking statements as a result of events or developments
subsequent to the date of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250205566308/en/
Investors: Michael Marinaccio 312.661.4930 or
investors@kemper.com Media: Barbara Ciesemier 312.661.4521 or
bciesemier@kemper.com
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