Kemper Reports Third Quarter 2022 Operating Results
Kemper Corporation (NYSE: KMPR) reported a net loss of $76.2 million, or $(1.19) per diluted share, for Q3 2022, slightly worse than the $75.3 million loss in Q3 2021. Adjusted losses were $72.7 million, compared to $68.6 million in the prior year. The results included an $8.8 million loss from equity securities and catastrophe losses of $27 million, primarily from Hurricane Ian. Despite a decrease in total revenues to $1.38 billion (down 5%), specialty auto profitability improved with net written premiums in commercial vehicles growing 34%. The company announced strategic initiatives to strengthen operations and declared a dividend of $0.31 per share.
- Specialty Auto profitability improved with elevated severity trends.
- Commercial Vehicle net written premiums grew 34% year-over-year.
- Declared dividend of $0.31 per share, reaffirming commitment to shareholders.
- Key strategic initiatives aimed at improving capital efficiency and reducing risk profile.
- Net loss of $76.2 million, reflecting ongoing financial challenges.
- Total revenues decreased by $67 million (5%) to $1,377.6 million.
- Losses from the change in fair value of equity and convertible securities totaled $8.8 million.
- Cash and investments decreased by 39% since year-end 2021.
Adjusted Consolidated Net Operating Loss1 was
Key themes of the quarter include:
- Sequential improvement in Specialty Auto inclusive of elevated severity trends
- Profitability improvement initiatives earning in at an accelerated rate
-
Rate-taking activities continue ahead of schedule:
-
Specialty P&C Personal Auto filed an additional
16% rate increase on7% of the book -
Preferred P&C Personal Auto filed an additional
18% rate increase on40% of the book
-
Specialty P&C Personal Auto filed an additional
-
Continued strong momentum in Commercial Vehicle, net written premiums grew
34% year-over-year -
Consolidated catastrophe losses were
$27 million - Life profitability improved as mortality continues to moderate and business benefits from increased yields
- Strategic initiatives announced to enhance the operating model: These include a restructuring program, an establishment of an offshore captive, and the transformation of P&C personal lines businesses to a fee based model through a reciprocal
-
Offshore captive enabled a
$300M $1.4B -
Declared dividend of
$0.31
“Our quarterly results show continued progress toward restoring underwriting profitability,” said
1 Non-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 |
|
Nine Months Ended |
||||||||||||
(Dollars in Millions, Except Per Share Amounts) (Unaudited) |
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) |
|
$ |
(76.2 |
) |
|
$ |
(75.3 |
) |
|
$ |
(245.7 |
) |
|
$ |
(14.7 |
) |
Adjusted Consolidated Net Operating Income (Loss) 1 |
|
$ |
(30.5 |
) |
|
$ |
(75.8 |
) |
|
$ |
(130.3 |
) |
|
$ |
(88.0 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Impact of Catastrophe Losses and Related Loss Adjustment Expense (LAE) on Net Income |
|
$ |
(21.3 |
) |
|
$ |
(25.7 |
) |
|
$ |
(56.2 |
) |
|
$ |
(75.0 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Diluted Net Income (Loss) Per Share From: |
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) |
|
$ |
(1.19 |
) |
|
$ |
(1.18 |
) |
|
$ |
(3.85 |
) |
|
$ |
(0.23 |
) |
Adjusted Consolidated Net Operating Income (Loss) 1 |
|
$ |
(0.48 |
) |
|
$ |
(1.19 |
) |
|
$ |
(2.04 |
) |
|
$ |
(1.36 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Impact of Catastrophe Losses and Related LAE on Net Income (Loss) Per Share |
|
$ |
(0.33 |
) |
|
$ |
(0.40 |
) |
|
$ |
(0.88 |
) |
|
$ |
(1.16 |
) |
Revenues
Total revenues for the third quarter of 2022 decreased
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 |
|
Nine Months Ended |
||||||||||||
(Dollars in Millions) (Unaudited) |
|
|
|
|
|
|
|
|
||||||||
Segment Net Operating Income (Loss): |
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
(28.7 |
) |
|
$ |
(59.3 |
) |
|
$ |
(112.3 |
) |
|
$ |
(70.9 |
) |
|
|
|
(2.1 |
) |
|
|
(6.4 |
) |
|
|
(25.0 |
) |
|
|
(5.1 |
) |
|
|
|
12.6 |
|
|
|
2.8 |
|
|
|
33.4 |
|
|
|
23.1 |
|
Total Segment Net Operating Income (Loss) |
|
|
(18.2 |
) |
|
|
(62.9 |
) |
|
|
(103.9 |
) |
|
|
(52.9 |
) |
Corporate and Other Net Operating Income (Loss) |
|
|
(12.3 |
) |
|
|
(12.9 |
) |
|
|
(26.4 |
) |
|
|
(35.1 |
) |
Adjusted Consolidated Net Operating Income (Loss) 1 |
|
|
(30.5 |
) |
|
|
(75.8 |
) |
|
|
(130.3 |
) |
|
|
(88.0 |
) |
Net Income (Loss) From: |
|
|
|
|
|
|
|
|
||||||||
Change in Fair Value of |
|
|
(8.8 |
) |
|
|
(0.5 |
) |
|
|
(63.1 |
) |
|
|
73.0 |
|
Net Realized Investment Gains (Losses) |
|
|
(9.6 |
) |
|
|
7.9 |
|
|
|
0.3 |
|
|
|
34.0 |
|
Impairment Losses |
|
|
(6.6 |
) |
|
|
(0.5 |
) |
|
|
(17.5 |
) |
|
|
(6.2 |
) |
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs |
|
|
(20.7 |
) |
|
|
(6.4 |
) |
|
|
(32.2 |
) |
|
|
(27.5 |
) |
Loss from Early Extinguishment of Debt |
|
|
— |
|
|
|
— |
|
|
|
(2.9 |
) |
|
|
— |
|
Net Income (Loss) |
|
$ |
(76.2 |
) |
|
$ |
(75.3 |
) |
|
$ |
(245.7 |
) |
|
$ |
(14.7 |
) |
Capital
Total Shareholders’ Equity at the end of the quarter was
On
Kemper ended the quarter with a book value per share of
Unaudited condensed consolidated statements of income (loss) for the three months ended
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
(Dollars in Millions, Except Per Share Amounts) |
|
|
|
|
|
|
|
|
||||||||
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Earned Premiums |
|
$ |
1,307.0 |
|
|
$ |
1,356.1 |
|
|
$ |
3,999.3 |
|
|
$ |
3,894.6 |
|
Net Investment Income |
|
|
97.8 |
|
|
|
101.9 |
|
|
|
316.3 |
|
|
|
318.9 |
|
Change in Value of Alternative Energy Partnership Investments2 |
|
|
0.4 |
|
|
|
(23.8 |
) |
|
|
(21.2 |
) |
|
|
(46.9 |
) |
Other Income |
|
|
4.0 |
|
|
|
1.5 |
|
|
|
7.3 |
|
|
|
4.8 |
|
Income (Loss) from Change in Fair Value of |
|
|
(11.2 |
) |
|
|
(0.6 |
) |
|
|
(79.9 |
) |
|
|
92.4 |
|
Net Realized Investment Gains (Losses) |
|
|
(12.1 |
) |
|
|
10.1 |
|
|
|
0.4 |
|
|
|
43.1 |
|
Impairment Losses |
|
|
(8.3 |
) |
|
|
(0.6 |
) |
|
|
(22.1 |
) |
|
|
(7.8 |
) |
Total Revenues |
|
|
1,377.6 |
|
|
|
1,444.6 |
|
|
|
4,200.1 |
|
|
|
4,299.1 |
|
Expenses: |
|
|
|
|
|
|
|
|
||||||||
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses |
|
|
1,102.4 |
|
|
|
1,211.2 |
|
|
|
3,426.1 |
|
|
|
3,324.8 |
|
Insurance Expenses |
|
|
301.3 |
|
|
|
311.3 |
|
|
|
913.0 |
|
|
|
909.0 |
|
Loss from Early Extinguishment of Debt |
|
|
— |
|
|
|
— |
|
|
|
3.7 |
|
|
|
— |
|
Interest and Other Expenses |
|
|
63.5 |
|
|
|
51.9 |
|
|
|
171.1 |
|
|
|
163.2 |
|
Total Expenses |
|
|
1,467.2 |
|
|
|
1,574.4 |
|
|
|
4,513.9 |
|
|
|
4,397.0 |
|
Income (Loss) before Income Taxes |
|
|
(89.6 |
) |
|
|
(129.8 |
) |
|
|
(313.8 |
) |
|
|
(97.9 |
) |
Income Tax Benefit (Expense) |
|
|
13.4 |
|
|
|
54.5 |
|
|
|
68.1 |
|
|
|
83.2 |
|
Net Income (Loss) |
|
$ |
(76.2 |
) |
|
$ |
(75.3 |
) |
|
$ |
(245.7 |
) |
|
$ |
(14.7 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) Per Unrestricted Share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(1.19 |
) |
|
$ |
(1.18 |
) |
|
$ |
(3.85 |
) |
|
$ |
(0.23 |
) |
Diluted |
|
$ |
(1.19 |
) |
|
$ |
(1.18 |
) |
|
$ |
(3.85 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average Outstanding (Shares in Thousands): |
|
|
|
|
|
|
|
|
||||||||
Unrestricted Shares - Basic |
|
|
63,852.8 |
|
|
|
63,628.1 |
|
|
|
63,804.4 |
|
|
|
64,469.9 |
|
Unrestricted Shares and Equivalent Shares - Diluted |
|
|
63,852.8 |
|
|
|
63,628.1 |
|
|
|
63,804.4 |
|
|
|
64,469.9 |
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends Paid to Shareholders Per Share |
|
$ |
0.31 |
|
|
$ |
0.31 |
|
|
$ |
0.93 |
|
|
$ |
0.93 |
|
2Income related to Change in Value of Alternative Energy Partnership Investments was
2Loss related to Change in Value of Alternative Energy Partnership Investments was
Unaudited business segment revenues for the three months ended
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
(Dollars in Millions) |
|
|
|
|
|
|
|
|
||||||||
REVENUES: |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums: |
|
|
|
|
|
|
|
|
||||||||
Personal Automobile |
|
$ |
858.8 |
|
|
$ |
920.6 |
|
|
$ |
2,666.3 |
|
|
$ |
2,615.6 |
|
Commercial Automobile |
|
|
140.7 |
|
|
|
107.7 |
|
|
|
398.5 |
|
|
|
300.6 |
|
Total Earned Premiums |
|
|
999.5 |
|
|
|
1,028.3 |
|
|
|
3,064.8 |
|
|
|
2,916.2 |
|
Net Investment Income |
|
|
33.9 |
|
|
|
37.0 |
|
|
|
102.8 |
|
|
|
114.7 |
|
Change in Value of Alternative Energy Partnership Investments |
|
|
0.3 |
|
|
|
(11.3 |
) |
|
|
(10.6 |
) |
|
|
(22.3 |
) |
Other Income |
|
|
2.3 |
|
|
|
1.2 |
|
|
|
5.0 |
|
|
|
3.1 |
|
Total Specialty Property & Casualty Insurance Revenues |
|
|
1,036.0 |
|
|
|
1,055.2 |
|
|
|
3,162.0 |
|
|
|
3,011.7 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums: |
|
|
|
|
|
|
|
|
||||||||
Personal Automobile |
|
|
89.5 |
|
|
|
102.6 |
|
|
|
279.5 |
|
|
|
309.1 |
|
Homeowners |
|
|
51.9 |
|
|
|
52.5 |
|
|
|
150.9 |
|
|
|
154.6 |
|
Other Personal |
|
|
7.9 |
|
|
|
8.6 |
|
|
|
24.4 |
|
|
|
25.4 |
|
Total Earned Premiums |
|
|
149.3 |
|
|
|
163.7 |
|
|
|
454.8 |
|
|
|
489.1 |
|
Net Investment Income |
|
|
11.8 |
|
|
|
16.1 |
|
|
|
36.2 |
|
|
|
51.5 |
|
Change in Value of Alternative Energy Partnership Investments |
|
|
— |
|
|
|
(6.4 |
) |
|
|
(5.0 |
) |
|
|
(12.5 |
) |
Total Preferred Property & Casualty Insurance Revenues |
|
|
161.1 |
|
|
|
173.4 |
|
|
|
486.0 |
|
|
|
528.1 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums: |
|
|
|
|
|
|
|
|
||||||||
Life |
|
|
100.4 |
|
|
|
101.5 |
|
|
|
304.6 |
|
|
|
300.2 |
|
Accident & Health |
|
|
45.9 |
|
|
|
47.0 |
|
|
|
136.8 |
|
|
|
142.3 |
|
Property |
|
|
11.9 |
|
|
|
15.6 |
|
|
|
38.3 |
|
|
|
46.8 |
|
Total Earned Premiums |
|
|
158.2 |
|
|
|
164.1 |
|
|
|
479.7 |
|
|
|
489.3 |
|
Net Investment Income |
|
|
52.6 |
|
|
|
48.4 |
|
|
|
163.9 |
|
|
|
151.9 |
|
Change in Value of Alternative Energy Partnership Investments |
|
|
0.1 |
|
|
|
(6.1 |
) |
|
|
(5.6 |
) |
|
|
(12.1 |
) |
Other Income |
|
|
— |
|
|
|
0.1 |
|
|
|
(0.8 |
) |
|
|
0.3 |
|
Total Life & Health Insurance Revenues |
|
|
210.9 |
|
|
|
206.5 |
|
|
|
637.2 |
|
|
|
629.4 |
|
Total Segment Revenues |
|
|
1,408.0 |
|
|
|
1,435.1 |
|
|
|
4,285.2 |
|
|
|
4,169.2 |
|
Income (Loss) from Change in Fair Value of |
|
|
(11.2 |
) |
|
|
(0.6 |
) |
|
|
(79.9 |
) |
|
|
92.4 |
|
Net Realized Investment Gains (Losses) |
|
|
(12.1 |
) |
|
|
10.1 |
|
|
|
0.4 |
|
|
|
43.1 |
|
Impairment Losses |
|
|
(8.3 |
) |
|
|
(0.6 |
) |
|
|
(22.1 |
) |
|
|
(7.8 |
) |
Other |
|
|
1.2 |
|
|
|
0.6 |
|
|
|
16.5 |
|
|
|
2.2 |
|
Total Revenues |
|
$ |
1,377.6 |
|
|
$ |
1,444.6 |
|
|
$ |
4,200.1 |
|
|
$ |
4,299.1 |
|
KEMPER CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Millions) (Unaudited) |
|||||||
|
|
|
|
||||
Assets: |
|
|
|
||||
Investments: |
|
|
|
||||
Fixed Maturities at Fair Value |
$ |
6,577.1 |
|
|
$ |
7,986.9 |
|
|
|
322.7 |
|
|
|
830.6 |
|
Equity Method Limited Liability Investments |
|
226.0 |
|
|
|
241.9 |
|
Alternative Energy Partnership Investments |
|
16.9 |
|
|
|
39.6 |
|
Short-term Investments at Cost which Approximates Fair Value |
|
357.2 |
|
|
|
284.1 |
|
|
|
578.6 |
|
|
|
448.1 |
|
Loans to Policyholders |
|
283.2 |
|
|
|
286.2 |
|
Other Investments |
|
274.2 |
|
|
|
270.0 |
|
Total Investments |
|
8,635.9 |
|
|
|
10,387.4 |
|
Cash |
|
249.2 |
|
|
|
148.2 |
|
Receivables from Policyholders |
|
1,345.8 |
|
|
|
1,418.7 |
|
Other Receivables |
|
228.7 |
|
|
|
207.3 |
|
Deferred Policy Acquisition Costs |
|
634.7 |
|
|
|
677.6 |
|
|
|
1,298.8 |
|
|
|
1,312.0 |
|
Current Income Tax Assets |
|
165.1 |
|
|
|
173.1 |
|
Deferred Income Tax Assets |
|
182.0 |
|
|
|
— |
|
Assets Held-for-Sale |
|
172.8 |
|
|
|
— |
|
Other Assets |
|
544.8 |
|
|
|
592.2 |
|
Total Assets |
$ |
13,457.8 |
|
|
$ |
14,916.5 |
|
Liabilities and Shareholders’ Equity: |
|
|
|
||||
Insurance Reserves: |
|
|
|
||||
Life & Health |
$ |
3,534.6 |
|
|
$ |
3,540.9 |
|
Property & Casualty |
|
2,720.3 |
|
|
|
2,772.7 |
|
Total Insurance Reserves |
|
6,254.9 |
|
|
|
6,313.6 |
|
Unearned Premiums |
|
1,794.8 |
|
|
|
1,898.7 |
|
Policyholder Contract Liabilities |
|
704.0 |
|
|
|
504.0 |
|
Deferred Income Tax Liabilities |
|
— |
|
|
|
227.0 |
|
Liabilities Held-for-Sale |
|
84.8 |
|
|
|
— |
|
Accrued Expenses and Other Liabilities |
|
795.3 |
|
|
|
843.6 |
|
Long-term Debt, Current and Non-current, at Amortized Cost |
|
1,386.4 |
|
|
|
1,121.9 |
|
Total Liabilities |
|
11,020.2 |
|
|
|
10,908.8 |
|
Shareholders’ Equity: |
|
|
|
||||
Common Stock |
|
6.4 |
|
|
|
6.4 |
|
|
|
1,822.2 |
|
|
|
1,790.7 |
|
Retained Earnings |
|
1,455.6 |
|
|
|
1,762.5 |
|
Accumulated Other Comprehensive Income |
|
(846.6 |
) |
|
|
448.1 |
|
Total Shareholders’ Equity |
|
2,437.6 |
|
|
|
4,007.7 |
|
Total Liabilities and Shareholders’ Equity |
$ |
13,457.8 |
|
|
$ |
14,916.5 |
|
Unaudited selected financial information for the |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
(Dollars in Millions) |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Results of Operations |
||||||||||||||||
Net Premiums Written |
|
$ |
968.5 |
|
|
$ |
1,024.3 |
|
|
$ |
3,012.1 |
|
|
$ |
3,078.3 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums |
|
$ |
999.5 |
|
|
$ |
1,028.3 |
|
|
$ |
3,064.8 |
|
|
$ |
2,916.2 |
|
Net Investment Income |
|
|
33.9 |
|
|
|
37.0 |
|
|
|
102.8 |
|
|
|
114.7 |
|
Change in Value of Alternative Energy Partnership Investments |
|
|
0.3 |
|
|
|
(11.3 |
) |
|
|
(10.6 |
) |
|
|
(22.3 |
) |
Other Income |
|
|
2.3 |
|
|
|
1.2 |
|
|
|
5.0 |
|
|
|
3.1 |
|
Total Revenues |
|
|
1,036.0 |
|
|
|
1,055.2 |
|
|
|
3,162.0 |
|
|
|
3,011.7 |
|
Incurred Losses and LAE related to: |
|
|
|
|
|
|
|
|
||||||||
Current Year: |
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE |
|
|
868.0 |
|
|
|
924.4 |
|
|
|
2,709.9 |
|
|
|
2,451.8 |
|
Catastrophe Losses and LAE |
|
|
14.8 |
|
|
|
3.4 |
|
|
|
23.1 |
|
|
|
13.2 |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE |
|
|
(6.6 |
) |
|
|
25.1 |
|
|
|
(24.8 |
) |
|
|
105.0 |
|
Catastrophe Losses and LAE |
|
|
0.2 |
|
|
|
(0.1 |
) |
|
|
0.7 |
|
|
|
0.3 |
|
Total Incurred Losses and LAE |
|
|
876.4 |
|
|
|
952.8 |
|
|
|
2,708.9 |
|
|
|
2,570.3 |
|
Insurance Expenses |
|
|
198.8 |
|
|
|
194.2 |
|
|
|
603.5 |
|
|
|
570.1 |
|
Operating Income (Loss) |
|
|
(39.2 |
) |
|
|
(91.8 |
) |
|
|
(150.4 |
) |
|
|
(128.7 |
) |
Income Tax Benefit (Expense) |
|
|
10.5 |
|
|
|
32.5 |
|
|
|
38.1 |
|
|
|
57.8 |
|
Segment Net Operating Income (Loss) |
|
$ |
(28.7 |
) |
|
$ |
(59.3 |
) |
|
$ |
(112.3 |
) |
|
$ |
(70.9 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Ratios Based On Earned Premiums |
||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio |
|
|
86.9 |
% |
|
|
90.0 |
% |
|
|
88.4 |
% |
|
|
84.0 |
% |
Current Year Catastrophe Losses and LAE Ratio |
|
|
1.5 |
|
|
|
0.3 |
|
|
|
0.8 |
|
|
|
0.5 |
|
|
|
|
(0.7 |
) |
|
|
2.4 |
|
|
|
(0.8 |
) |
|
|
3.6 |
|
Prior Years Catastrophe Losses and LAE Ratio |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total Incurred Loss and LAE Ratio |
|
|
87.7 |
|
|
|
92.7 |
|
|
|
88.4 |
|
|
|
88.1 |
|
Insurance Expense Ratio |
|
|
19.9 |
|
|
|
18.9 |
|
|
|
19.7 |
|
|
|
19.5 |
|
Combined Ratio |
|
|
107.6 |
% |
|
|
111.6 |
% |
|
|
108.1 |
% |
|
|
107.6 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Underlying Combined Ratio1 |
||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio |
|
|
86.9 |
% |
|
|
90.0 |
% |
|
|
88.4 |
% |
|
|
84.0 |
% |
Insurance Expense Ratio |
|
|
19.9 |
|
|
|
18.9 |
|
|
|
19.7 |
|
|
|
19.5 |
|
Underlying Combined Ratio1 |
|
|
106.8 |
% |
|
|
108.9 |
% |
|
|
108.1 |
% |
|
|
103.5 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Measure Reconciliation |
||||||||||||||||
Combined Ratio |
|
|
107.6 |
% |
|
|
111.6 |
% |
|
|
108.1 |
% |
|
|
107.6 |
% |
Less: |
|
|
|
|
|
|
|
|
||||||||
Current Year Catastrophe Losses and LAE Ratio |
|
|
1.5 |
|
|
|
0.3 |
|
|
|
0.8 |
|
|
|
0.5 |
|
|
|
|
(0.7 |
) |
|
|
2.4 |
|
|
|
(0.8 |
) |
|
|
3.6 |
|
Prior Years Catastrophe Losses and LAE Ratio |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Underlying Combined Ratio1 |
|
|
106.8 |
% |
|
|
108.9 |
% |
|
|
108.1 |
% |
|
|
103.5 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Unaudited selected financial information for the |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
(Dollars in Millions) |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Results of Operations |
||||||||||||||||
Net Premiums Written |
|
$ |
133.3 |
|
|
$ |
164.8 |
|
|
$ |
412.0 |
|
|
$ |
488.8 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earned Premiums |
|
$ |
149.3 |
|
|
$ |
163.7 |
|
|
$ |
454.8 |
|
|
$ |
489.1 |
|
Net Investment Income |
|
|
11.8 |
|
|
|
16.1 |
|
|
|
36.2 |
|
|
|
51.5 |
|
Change in Value of Alternative Energy Partnership Investments |
|
|
— |
|
|
|
(6.4 |
) |
|
|
(5.0 |
) |
|
|
(12.5 |
) |
Total Revenues |
|
|
161.1 |
|
|
|
173.4 |
|
|
|
486.0 |
|
|
|
528.1 |
|
Incurred Losses and LAE related to: |
|
|
|
|
|
|
|
|
||||||||
Current Year: |
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE |
|
|
110.7 |
|
|
|
115.6 |
|
|
|
333.4 |
|
|
|
328.0 |
|
Catastrophe Losses and LAE |
|
|
10.8 |
|
|
|
23.4 |
|
|
|
45.7 |
|
|
|
71.6 |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-catastrophe Losses and LAE |
|
|
(0.3 |
) |
|
|
— |
|
|
|
3.6 |
|
|
|
5.1 |
|
Catastrophe Losses and LAE |
|
|
(0.7 |
) |
|
|
0.1 |
|
|
|
(4.7 |
) |
|
|
(3.6 |
) |
Total Incurred Losses and LAE |
|
|
120.5 |
|
|
|
139.1 |
|
|
|
378.0 |
|
|
|
401.1 |
|
Insurance Expenses |
|
|
43.9 |
|
|
|
51.7 |
|
|
|
142.4 |
|
|
|
154.8 |
|
Operating Income (Loss) |
|
|
(3.3 |
) |
|
|
(17.4 |
) |
|
|
(34.4 |
) |
|
|
(27.8 |
) |
Income Tax Benefit (Expense) |
|
|
1.2 |
|
|
|
11.0 |
|
|
|
9.4 |
|
|
|
22.7 |
|
Segment Net Operating Income (Loss) |
|
$ |
(2.1 |
) |
|
$ |
(6.4 |
) |
|
$ |
(25.0 |
) |
|
$ |
(5.1 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Ratios Based On Earned Premiums |
||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio |
|
|
74.2 |
% |
|
|
70.6 |
% |
|
|
73.3 |
% |
|
|
67.1 |
% |
Current Year Catastrophe Losses and LAE Ratio |
|
|
7.2 |
|
|
|
14.3 |
|
|
|
10.0 |
|
|
|
14.6 |
|
|
|
|
(0.2 |
) |
|
|
— |
|
|
|
0.8 |
|
|
|
1.0 |
|
Prior Years Catastrophe Losses and LAE Ratio |
|
|
(0.5 |
) |
|
|
0.1 |
|
|
|
(1.0 |
) |
|
|
(0.7 |
) |
Total Incurred Loss and LAE Ratio |
|
|
80.7 |
|
|
|
85.0 |
|
|
|
83.1 |
|
|
|
82.0 |
|
Insurance Expense Ratio |
|
|
29.4 |
|
|
|
31.6 |
|
|
|
31.3 |
|
|
|
31.6 |
|
Combined Ratio |
|
|
110.1 |
% |
|
|
116.6 |
% |
|
|
114.4 |
% |
|
|
113.6 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Underlying Combined Ratio1 |
||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio |
|
|
74.2 |
% |
|
|
70.6 |
% |
|
|
73.3 |
% |
|
|
67.1 |
% |
Insurance Expense Ratio |
|
|
29.4 |
|
|
|
31.6 |
|
|
|
31.3 |
|
|
|
31.6 |
|
Underlying Combined Ratio1 |
|
|
103.6 |
% |
|
|
102.2 |
% |
|
|
104.6 |
% |
|
|
98.7 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Measure Reconciliation |
||||||||||||||||
Combined Ratio |
|
|
110.1 |
% |
|
|
116.6 |
% |
|
|
114.4 |
% |
|
|
113.6 |
% |
Less: |
|
|
|
|
|
|
|
|
||||||||
Current Year Catastrophe Losses and LAE Ratio |
|
|
7.2 |
|
|
|
14.3 |
|
|
|
10.0 |
|
|
|
14.6 |
|
|
|
|
(0.2 |
) |
|
|
— |
|
|
|
0.8 |
|
|
|
1.0 |
|
Prior Years Catastrophe Losses and LAE Ratio |
|
|
(0.5 |
) |
|
|
0.1 |
|
|
|
(1.0 |
) |
|
|
(0.7 |
) |
Underlying Combined Ratio1 |
|
|
103.6 |
% |
|
|
102.2 |
% |
|
|
104.6 |
% |
|
|
98.7 |
% |
Unaudited selected financial information for the |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
(Dollars in Millions) |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Results of Operations |
||||||||||||||||
Earned Premiums |
|
$ |
158.2 |
|
|
$ |
164.1 |
|
|
$ |
479.7 |
|
|
$ |
489.3 |
|
Net Investment Income |
|
|
52.6 |
|
|
|
48.4 |
|
|
|
163.9 |
|
|
|
151.9 |
|
Change in Value of Alternative Energy Partnership Investments |
|
|
0.1 |
|
|
|
(6.1 |
) |
|
|
(5.6 |
) |
|
|
(12.1 |
) |
Other Income (Loss) |
|
|
— |
|
|
|
0.1 |
|
|
|
(0.8 |
) |
|
|
0.3 |
|
Total Revenues |
|
|
210.9 |
|
|
|
206.5 |
|
|
|
637.2 |
|
|
|
629.4 |
|
Policyholders’ Benefits and Incurred Losses and LAE |
|
|
105.6 |
|
|
|
119.5 |
|
|
|
339.2 |
|
|
|
353.5 |
|
Insurance Expenses |
|
|
91.5 |
|
|
|
92.9 |
|
|
|
262.2 |
|
|
|
269.4 |
|
Operating Income (Loss) |
|
|
13.8 |
|
|
|
(5.9 |
) |
|
|
35.8 |
|
|
|
6.5 |
|
Income Tax Benefit (Expense) |
|
|
(1.2 |
) |
|
|
8.7 |
|
|
|
(2.4 |
) |
|
|
16.6 |
|
Segment Net Operating Income (Loss) |
|
$ |
12.6 |
|
|
$ |
2.8 |
|
|
$ |
33.4 |
|
|
$ |
23.1 |
|
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) the after-tax impact of:
(i) Income (Loss) from Change in Fair Value of
(ii) Net Realized Investment Gains (Losses);
(iii) Impairment Losses;
(iv) Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs;
(v) Debt Extinguishment, Pension and Other Charges; and
(vi) 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). 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 ended
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. Income (Loss) from Change in Fair Value of
A reconciliation of Net Income (Loss) to Adjusted Consolidated Net Operating Income (Loss) 1 for the three months ended
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
(Dollars in Millions) (Unaudited) |
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) |
|
$ |
(76.2 |
) |
|
$ |
(75.3 |
) |
|
$ |
(245.7 |
) |
|
$ |
(14.7 |
) |
Less Net Income (Loss) From: |
|
|
|
|
|
|
|
|
||||||||
Change in Fair Value of |
|
|
(8.8 |
) |
|
|
(0.5 |
) |
|
|
(63.1 |
) |
|
|
73.0 |
|
Net Realized Investment Gains (Losses) |
|
|
(9.6 |
) |
|
|
7.9 |
|
|
|
0.3 |
|
|
|
34.0 |
|
Impairment Losses |
|
|
(6.6 |
) |
|
|
(0.5 |
) |
|
|
(17.5 |
) |
|
|
(6.2 |
) |
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs |
|
|
(20.7 |
) |
|
|
(6.4 |
) |
|
|
(32.2 |
) |
|
|
(27.5 |
) |
Debt Extinguishment, Pension and Other Charges |
|
|
— |
|
|
|
— |
|
|
|
(2.9 |
) |
|
|
— |
|
Adjusted Consolidated Net Operating Income (Loss) 1 |
|
$ |
(30.5 |
) |
|
$ |
(75.8 |
) |
|
$ |
(130.3 |
) |
|
$ |
(88.0 |
) |
Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share1 is a non-GAAP financial measure computed by dividing Adjusted Consolidated 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 Income (Loss) Per Unrestricted Share.
A reconciliation of Diluted Net Income (Loss) Per Unrestricted Share to Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share1 for the three months ended
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
(Unaudited) |
|
|
|
|
|
|
|
|
||||||||
Diluted Net Income (Loss) Per Unrestricted Share |
|
$ |
(1.19 |
) |
|
$ |
(1.18 |
) |
|
$ |
(3.85 |
) |
|
$ |
(0.23 |
) |
Less Net Income (Loss) Per Unrestricted Share From: |
|
|
|
|
|
|
|
|
||||||||
Change in Fair Value of |
|
|
(0.14 |
) |
|
|
(0.01 |
) |
|
|
(0.99 |
) |
|
|
1.13 |
|
Net Realized Investment Gains (Losses) |
|
|
(0.15 |
) |
|
|
0.13 |
|
|
|
— |
|
|
|
0.53 |
|
Impairment Losses |
|
|
(0.10 |
) |
|
|
(0.01 |
) |
|
|
(0.27 |
) |
|
|
(0.10 |
) |
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs |
|
|
(0.32 |
) |
|
|
(0.10 |
) |
|
|
(0.50 |
) |
|
|
(0.43 |
) |
Debt Extinguishment, Pension and Other Charges |
|
|
— |
|
|
|
— |
|
|
|
(0.05 |
) |
|
|
— |
|
Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share1 |
|
$ |
(0.48 |
) |
|
$ |
(1.19 |
) |
|
$ |
(2.04 |
) |
|
$ |
(1.36 |
) |
Book Value Per Share Excluding Net Unrealized (Gains) Losses on Fixed Maturities1 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) losses on fixed income securities 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) losses on fixed income securities, in conjunction with book value per share to identify and analyze the change in net worth 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.
A reconciliation of the numerator used in the computation of Book Value Per Share Excluding Net Unrealized (Gains) Losses on Fixed Maturities1 and Book Value Per Share at
(Dollars in Millions) (Unaudited) |
|
|
|
|
||||
Shareholders’ Equity |
|
$ |
2,437.6 |
|
|
$ |
4,007.7 |
|
Less: Net Unrealized Gains (Losses) on Fixed Maturities |
|
|
(782.7 |
) |
|
|
502.6 |
|
Shareholders’ Equity Excluding Net Unrealized (Gains) Losses on Fixed Maturities1 |
|
$ |
3,220.3 |
|
|
$ |
3,505.1 |
|
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
As Adjusted for Acquisitions1 amounts are non-GAAP financial measures. Subsequent to the applicable acquisitions, the As Adjusted for Acquisitions1 amounts are computed by subtracting the impact of purchase accounting adjustments from the comparable consolidated GAAP financial measure reported by Kemper. Kemper believes computing and presenting results on an adjusted basis are useful to investors and are used by management to provide meaningful and comparable year-over-year comparisons.
A reconciliation of the As Adjusted for Acquisitions1 non-GAAP financial measures used in this press release to the comparable GAAP financial measure for the three months ended
|
|
|
|
|
|
|
||||||
(Dollars in Millions, Except Per Share Amounts) (Unaudited) |
|
Kemper Consolidated GAAP Financial Measure |
|
Less Impact of Purchase Accounting Adjustments |
|
As Adjusted for Acquisitions1 |
||||||
Net Income (Loss) |
|
$ |
(76.2 |
) |
|
$ |
(3.5 |
) |
|
$ |
(72.7 |
) |
Net Income (Loss) Per Share - Diluted |
|
$ |
(1.19 |
) |
|
$ |
(0.05 |
) |
|
$ |
(1.14 |
) |
Specialty Property & Casualty Insurance Segment: |
|
|
|
|
|
|
||||||
Earned Premiums |
|
$ |
999.5 |
|
|
$ |
— |
|
|
$ |
999.5 |
|
Segment Net Operating Income (Loss) |
|
$ |
(28.7 |
) |
|
$ |
(3.5 |
) |
|
$ |
(25.2 |
) |
|
|
|
|
|
|
|
||||||
Earned Premiums |
|
$ |
858.8 |
|
|
$ |
— |
|
|
$ |
858.8 |
|
Segment Net Operating Income (Loss) |
|
$ |
(37.0 |
) |
|
$ |
(3.1 |
) |
|
$ |
(33.9 |
) |
A reconciliation of the As Adjusted for Acquisitions1 non-GAAP financial measures used in this press release to the comparable GAAP financial measure for the three months ended
|
|
|
|
|
|
|
||||||
(Dollars in Millions, Except Per Share Amounts) (Unaudited) |
|
Kemper Consolidated GAAP Financial Measure |
|
Less Impact of Purchase Accounting Adjustments |
|
As Adjusted for Acquisitions1 |
||||||
Net Income (Loss) |
|
$ |
(75.3 |
) |
|
$ |
(6.7 |
) |
|
$ |
(68.6 |
) |
Net Income (Loss) Per Share - Diluted |
|
$ |
(1.18 |
) |
|
$ |
(0.10 |
) |
|
$ |
(1.08 |
) |
Specialty Property & Casualty Insurance Segment: |
|
|
|
|
|
|
||||||
Earned Premiums |
|
$ |
1,028.3 |
|
|
$ |
— |
|
|
$ |
1,028.3 |
|
Segment Net Operating Income (Loss) |
|
$ |
(59.3 |
) |
|
$ |
(7.0 |
) |
|
$ |
(52.3 |
) |
|
|
|
|
|
|
|
||||||
Earned Premiums |
|
$ |
920.6 |
|
|
$ |
— |
|
|
$ |
920.6 |
|
Segment Net Operating Income (Loss) |
|
$ |
(71.8 |
) |
|
$ |
(6.6 |
) |
|
$ |
(65.2 |
) |
Conference Call
Kemper will host its conference call to discuss third quarter 2022 results on
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 third quarter of 2022, 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
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;
- supply chain disruption;
- product demand and pricing;
- effects of governmental and regulatory actions;
- litigation outcomes;
- investment risks;
- cybersecurity risks;
- 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”).
The COVID-19 outbreak and subsequent global pandemic (“Pandemic”) is an extraordinary catastrophe that creates unique uncertainties and risks. Kemper cannot provide any assurances as to the impacts of the Pandemic and related economic conditions on Kemper’s operating and financial results.
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, including any such statements related to the Pandemic.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221102005353/en/
Investors:
312.661.4930 or investors@kemper.com
Media:
312.661.4521 or bciesemier@kemper.com
Source:
FAQ
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