kmpr-20210201
0000860748false00008607482021-02-012021-02-01

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 1, 2021 
Kemper Corporation
(Exact name of registrant as specified in its charter)
 
Commission File Number: 001-18298
 
DE 95-4255452
(State or other jurisdiction
of incorporation)		 (IRS Employer
Identification No.)
200 E. Randolph Street, Suite 3300, Chicago, IL 60601
(Address of principal executive offices, including zip code)
312-661-4600
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2.below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.10 per shareKMPRNYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of
the Exchange Act.    ¨


Section 2. – Financial Information
Item 2.02.Results of Operations and Financial Condition.
On February 1, 2021, Kemper Corporation ("Kemper" or the "Registrant") issued a press release announcing its financial results for the fourth quarter of 2020 and the availability of Kemper’s fourth quarter investor supplement and earnings call presentation on its website, kemper.com. The press release, the investor supplement and the earnings call presentation are furnished as Exhibits 99.1, 99.2 and 99.3, respectively, to this report.
Section 9. – Financial Statements and Exhibits.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits

99.1 Registrant’s press release dated February 1, 2021.
99.2 Fourth Quarter 2020 Investor Supplement of Kemper Corporation.
99.3 Fourth Quarter 2020 Earnings Call Presentation.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  Kemper Corporation
Date:February 1, 2021/S/    JAMES J. MCKINNEY
 James J. McKinney
 Executive Vice President and Chief Financial Officer (principal financial officer)


Exhibit 99.1
 

kemperlogocolorwebfinala051a.jpg
Kemper Corporation
200 East Randolph Street
Suite 3300
Chicago, IL 60601
kemper.com

Press Release
Kemper Reports Strong Fourth Quarter 2020 Operating Results
CHICAGO, February 1, 2021 — Kemper Corporation (NYSE: KMPR) reported net income of $97.5 million, or $1.46 per diluted share, for the fourth quarter of 2020, compared to $124.7 million, or $1.85 per diluted share, for the fourth quarter of 2019. In the fourth quarter of 2020, net income included a $57.8 million after-tax gain, or $0.86 per diluted share, attributable to the change in fair value of equity and convertible securities.
Adjusted Consolidated Net Operating Income1 was $105.8 million, or $1.59 per diluted share, for the fourth quarter of 2020, compared to $97.9 million, or $1.45 per diluted share, for the fourth quarter of 2019.
Highlights of the quarter include:
• Specialty P&C earned premiums increased by $83 million or 10%, and policies-in-force grew ~4%
• Life & Health produced net operating income of $9 million while absorbing protracted “catastrophe like” pandemic
• Announced the acquisition of American Access, further enhancing Kemper’s specialty auto expertise
•Kemper’s defined benefit pension plan purchased annuities and offered lump-sum payments, thereby reducing pension risk resulting in a non-cash after-tax pension settlement expense of $50.6 million.

“I’m very pleased with our quarter and full-year performance, against the backdrop of a challenging year,” said President and CEO Joseph P. Lacher, Jr. “We took actions to further strengthen our organization and an already strong balance sheet. Our performance metrics tell the success story, with tangible book value per share up 15% and return on tangible equity excluding unrealized gains up 16%. For the year, we generated over $400 million of net income, nearly $440 million of adjusted consolidated net operating income, and $425 million of cash from operations. Further, we continued to grow both top and bottom lines. Our ability to deliver these results is a testament to the strength of our franchise, our people, and our customers. Additionally, our announced acquisition of American Access will accelerate expansion of our Specialty auto business. Overall, Kemper remains well positioned to continue to deliver value to all our stakeholders.”
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 EndedYear Ended
(Dollars in Millions, Except Per Share Amounts) (Unaudited)Dec 31,
2020		Dec 31,
2019		Dec 31,
2020		Dec 31,
2019
Net Income$97.5 $124.7 $409.9 $531.1 
Adjusted Consolidated Net Operating Income1
$105.8 $97.9 $438.8 $418.3 
Impact of Catastrophe Losses and Related Loss Adjustment Expense (LAE) on Net Income
$(4.4)$(12.8)$(84.3)$(61.0)
Diluted Net Income Per Share From:
Net Income$1.46 $1.85 $6.14 $7.96 
Adjusted Consolidated Net Operating Income1
$1.59 $1.45 $6.57 $6.27 
Impact of Catastrophe Losses and Related LAE on Net Income Per Share$(0.07)$(0.19)$(1.26)$(0.91)
Capital
Total Shareholders’ Equity at the end of the quarter was $4,563.4 million, an increase of $591.1 million, or 15 percent, since year-end 2019 primarily driven by net income and an increase in accumulated other comprehensive income, partially offset by cash dividends and repurchases of common stock. Kemper ended the quarter with cash and investments at the holding company of $733.2 million, and the $400 million revolving credit agreement was undrawn.
During the fourth quarter of 2020, Kemper paid dividends of $19.7 million.
Kemper ended the quarter with a book value per share of $69.74, an increase of 17 percent from $59.59 at the end of 2019. Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1 was $58.67, up 11 percent from $53.08 at the end of 2019.
Revenues
Total revenues for the fourth quarter of 2020 increased $108.4 million, or 8.4 percent, to $1,392.1 million, compared to the fourth quarter of 2019, driven by $82.7 million of higher Specialty P&C earned premiums and a $33.9 million increase attributable to the change in fair value of equity and convertible securities. Net investment income increased $8.8 million to $102.7 million in the fourth quarter of 2020 due primarily to increased returns from Alternative Investments and higher levels of investments in fixed income securities, partially offset by lower yields on fixed income securities and higher investment expenses. Net realized investment losses were $0.1 million in the fourth quarter of 2020, compared to net realized investment gain of $2.8 million in the fourth quarter of 2019. Other income decreased from $3.7 million to $1.9 million in the fourth quarter of 2020.


2

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 EndedYear Ended
(Dollars in Millions) (Unaudited)Dec 31,
2020		Dec 31,
2019		Dec 31,
2020		Dec 31,
2019
Segment Net Operating Income:
Specialty Property & Casualty Insurance$91.1 $62.3 $337.9 $283.1 
Preferred Property & Casualty Insurance16.9 12.8 3.5 41.9 
Life & Health Insurance9.4 28.9 60.0 98.7 
Total Segment Net Operating Income117.4 104.0 401.4 423.7 
Corporate and Other Net Operating Income (Loss)(11.6)(6.1)37.4 (5.4)
Adjusted Consolidated Net Operating Income1
105.8 97.9 438.8 418.3 
Net Income (Loss) From:
Change in Fair Value of Equity and Convertible Securities57.8 30.9 57.0 109.7 
Net Realized Gains on Sales of Investments(0.1)2.2 30.1 33.1 
Impairment Losses0.4 (1.3)(15.4)(10.9)
Acquisition Related Transaction, Integration and Other Costs(15.8)(5.0)(50.0)(14.5)
Debt Extinguishment, Pension and Other Charges(50.6)— (50.6)(4.6)
Net Income$97.5 $124.7 $409.9 $531.1 
The Specialty Property & Casualty Insurance segment reported net operating income of $91.1 million for the fourth quarter of 2020, compared to $62.3 million in the fourth quarter of 2019. Results improved due primarily to higher premium volume and an improvement in underlying losses and LAE ratio. The segment’s Underlying Combined Ratio1 was 91.3 percent, compared to 93.8 percent in the fourth quarter of 2019 reflecting favorable short-term pandemic-related frequency trends.
The Preferred Property & Casualty Insurance segment reported net operating income of $16.9 million for the fourth quarter of 2020, compared to net operating income of $12.8 million in the fourth quarter of 2019. Results improved due primarily to an improvement in underlying losses and LAE and lower catastrophe losses and LAE (excluding loss and LAE reserve development), partially offset by adverse loss and LAE reserve development. The Preferred Property & Casualty Insurance segment’s Underlying Combined Ratio1 improved 3.0 percentage points to 93.6 percent in the fourth quarter of 2020 due primarily to lower incurred losses and LAE reflecting similar auto frequency trends experienced in our Specialty segment, as well as ongoing profit improvement actions.
The Life & Health Insurance segment reported net operating income of $9.4 million for the fourth quarter of 2020, compared to $28.9 million in the fourth quarter of 2019. Results deteriorated due primarily to an increase in COVID-related mortality, in line with country-wide trends.

3

Unaudited condensed consolidated statements of income for the three and twelve months ended December 31, 2020 and 2019 are presented below.
Three Months EndedYear Ended
(Dollars in Millions, Except Per Share Amounts)
Dec 31,
2020		Dec 31,
2019		Dec 31,
2020		Dec 31,
2019
Revenues:
Earned Premiums
$1,214.0 $1,145.8 $4,672.2 $4,472.4 
Net Investment Income
102.7 93.9 348.2 364.3 
Other Income
1.9 3.7 94.6 35.5 
Income (Loss) from Change in Fair Value of Equity and Convertible Securities
73.1 39.2 72.1 138.9 
Net Realized Gains (Losses) on Sales of Investments(0.1)2.8 38.1 41.9 
Impairment Losses0.5 (1.7)(19.5)(13.8)
Total Revenues1,392.1 1,283.7 5,205.7 5,039.2 
Expenses:
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses
863.4 814.9 3,323.6 3,188.3 
Insurance Expenses
279.3 265.4 1,100.5 1,019.7 
Loss from Early Extinguishment of Debt
— — — 5.8 
Interest and Other Expenses
128.8 46.5 271.5 163.8 
Total Expenses1,271.5 1,126.8 4,695.6 4,377.6 
Income from before Income Taxes 120.6 156.9 510.1 661.6 
Income Tax Expense
(23.1)(32.2)(100.2)(130.5)
Net Income$97.5 $124.7 $409.9 $531.1 
Net Income Per Unrestricted Share:
Basic
$1.49 $1.87 $6.24 $8.04 
Diluted
$1.46 $1.85 $6.14 $7.96 
Weighted-average Outstanding (Shares in Thousands):
Unrestricted Shares - Basic65,413.7 66,649.7 65,636.1 65,880.9 
Unrestricted Shares and Equivalent Shares - Diluted66,528.7 67,160.5 66,729.8 66,548.1 
Dividends Paid to Shareholders Per Share$0.30 $0.28 $1.20 $1.03 


4

Unaudited business segment revenues for the three and twelve months ended December 31, 2020 and 2019 are presented below.
Three Months EndedYear Ended
(Dollars in Millions)Dec 31,
2020		Dec 31,
2019		Dec 31,
2020		Dec 31,
2019
REVENUES:
Specialty Property & Casualty Insurance:
Earned Premiums:
Specialty Automobile$796.1 $733.1 $3,031.3 $2,825.6 
Commercial Automobile86.3 66.6 304.0 252.8 
Total Earned Premiums882.4 799.7 3,335.3 3,078.4 
Net Investment Income37.9 28.3 114.1 107.5 
Other Income0.4 0.8 1.8 7.0 
Total Specialty Property & Casualty Insurance Revenues920.7 828.8 3,451.2 3,192.9 
Preferred Property & Casualty Insurance:
Earned Premiums:
Preferred Automobile107.1 117.2 431.7 470.2 
Homeowners53.3 58.7 220.7 241.3 
Other Personal8.8 9.3 35.8 38.8 
Total Earned Premiums169.2 185.2 688.2 750.3 
Net Investment Income13.4 11.5 37.7 44.1 
Other Income— — 0.1 — 
Total Preferred Property & Casualty Insurance Revenues182.6 196.7 726.0 794.4 
Life & Health Insurance:
Earned Premiums:
Life96.5 95.6 385.7 384.6 
Accident & Health50.2 48.5 199.3 190.9 
Property15.7 16.8 63.7 68.2 
Total Earned Premiums162.4 160.9 648.7 643.7 
Net Investment Income52.8 52.0 198.8 206.4 
Other Income— 2.9 0.6 8.5 
Total Life & Health Insurance Revenues215.2 215.8 848.1 858.6 
Total Segment Revenues1,318.5 1,241.3 5,025.3 4,845.9 
Income (Loss) from Change in Fair Value of Equity and Convertible Securities73.1 39.2 72.1 138.9 
Net Realized Gains on Sales of Investments(0.1)2.8 38.1 41.9 
Impairment Losses0.5 (1.7)(19.5)(13.8)
Other0.1 2.1 89.7 26.3 
Total Revenues$1,392.1 $1,283.7 $5,205.7 $5,039.2 

5


KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)


Dec 31,
2020		Dec 31,
2019
Assets:
Investments:
Fixed Maturities at Fair Value
$7,605.9 $6,922.1 
Equity Securities at Fair Value
858.5 907.3 
Equity Securities at Modified Cost
40.1 41.9 
Equity Method Limited Liability Investments225.3 220.4 
Convertible Securities at Fair Value
39.9 37.3 
Short-term Investments at Cost which Approximates Fair Value
875.4 470.9 
Other Investments
779.0 661.5 
Total Investments
10,424.1 9,261.4 
Cash
206.1 136.8 
Receivables from Policyholders
1,194.5 1,117.1 
Other Receivables
222.4 219.7 
Deferred Policy Acquisition Costs
589.3 537.7 
Goodwill
1,114.0 1,114.0 
Current Income Tax Assets
15.6 44.7 
Other Assets
575.9 557.7 
Total Assets
$14,341.9 $12,989.1 
Liabilities and Shareholders’ Equity:
Insurance Reserves:
Life & Health
$3,527.5 $3,502.0 
Property & Casualty
1,982.5 1,969.8 
Total Insurance Reserves
5,510.0 5,471.8 
Unearned Premiums
1,615.1 1,545.5 
Policyholder Contract Liabilities
467.0 309.8 
Deferred Income Tax Liabilities
285.7 178.2 
Accrued Expenses and Other Liabilities
727.9 733.1 
Debt at Amortized Cost
1,172.8 778.4 
Total Liabilities
9,778.5 9,016.8 
Shareholders’ Equity:
Common Stock
6.5 6.7 
Paid-in Capital
1,805.2 1,819.2 
Retained Earnings
2,071.2 1,810.3 
Accumulated Other Comprehensive Income
680.5 336.1 
Total Shareholders’ Equity
4,563.4 3,972.3 
Total Liabilities and Shareholders’ Equity
$14,341.9 $12,989.1 


6

Unaudited selected financial information for the Specialty Property & Casualty Insurance segment follows.
Three Months EndedYear Ended
(Dollars in Millions)Dec 31,
2020		Dec 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations
Net Premiums Written$829.2 $782.5 $3,435.5 $3,211.3 
Earned Premiums$882.4 $799.7 $3,335.3 $3,078.4 
Net Investment Income37.9 28.3 114.1 107.5 
Other Income0.4 0.8 1.8 7.0 
Total Revenues920.7 828.8 3,451.2 3,192.9 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE626.2 599.5 2,350.8 2,302.4 
Catastrophe Losses and LAE5.5 3.8 12.3 11.1 
Prior Years:
Non-catastrophe Losses and LAE(1.7)(4.1)15.1 (35.1)
Catastrophe Losses and LAE0.1 0.2 0.2 0.5 
Total Incurred Losses and LAE630.1 599.4 2,378.4 2,278.9 
Insurance Expenses179.1 150.7 651.9 555.6 
Other Expenses— 0.2 — 2.5 
Operating Income111.5 78.5 420.9 355.9 
Income Tax Benefit(20.4)(16.2)(83.0)(72.8)
Segment Net Operating Income$91.1 $62.3 $337.9 $283.1 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio71.0 %75.0 %70.4 %74.7 %
Current Year Catastrophe Losses and LAE Ratio0.6 0.5 0.4 0.4 
Prior Years Non-catastrophe Losses and LAE Ratio(0.2)(0.5)0.5 (1.1)
Prior Years Catastrophe Losses and LAE Ratio— — — — 
Total Incurred Loss and LAE Ratio71.4 75.0 71.3 74.0 
Insurance Expense Ratio20.3 18.8 19.5 18.0 
Combined Ratio91.7 %93.8 %90.8 %92.0 %
Underlying Combined Ratio1
Current Year Non-catastrophe Losses and LAE Ratio71.0 %75.0 %70.4 %74.7 %
Insurance Expense Ratio20.3 18.8 19.5 18.0 
Underlying Combined Ratio1
91.3 %93.8 %89.9 %92.7 %
Non-GAAP Measure Reconciliation
Combined Ratio91.7 %93.8 %90.8 %92.0 %
Less:
Current Year Catastrophe Losses and LAE Ratio0.6 0.5 0.4 0.4 
Prior Years Non-catastrophe Losses and LAE Ratio(0.2)(0.5)0.5 (1.1)
Prior Years Catastrophe Losses and LAE Ratio— — — — 
Underlying Combined Ratio1
91.3 %93.8 %89.9 %92.7 %

7

Unaudited selected financial information for the Preferred Property & Casualty Insurance segment follows.
Three Months EndedYear Ended
(Dollars in Millions)Dec 31,
2020		Dec 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations
Net Premiums Written$155.2 $172.6 $653.0 $739.3 
Earned Premiums$169.2 $185.2 $688.2 $750.3 
Net Investment Income13.4 11.5 37.7 44.1 
Other Income— — 0.1 — 
Total Revenues182.6 196.7 726.0 794.4 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE107.1 120.2 400.9 481.8 
Catastrophe Losses and LAE(5.3)11.9 82.0 63.0 
Prior Years:
Non-catastrophe Losses and LAE9.5 (7.1)20.7 (17.6)
Catastrophe Losses and LAE0.1 (3.1)(0.5)(18.4)
Total Incurred Losses and LAE111.4 121.9 503.1 508.8 
Insurance Expenses51.4 58.7 221.1 233.3 
Operating Income (Loss)19.8 16.1 1.8 52.3 
Income Tax Benefit (Expense)(2.9)(3.3)1.7 (10.4)
Segment Net Operating Income (Loss)$16.9 $12.8 $3.5 $41.9 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio63.2 %64.9 %58.3 %64.2 %
Current Year Catastrophe Losses and LAE Ratio(3.1)6.4 11.9 8.4 
Prior Years Non-catastrophe Losses and LAE Ratio5.6 (3.8)3.0 (2.3)
Prior Years Catastrophe Losses and LAE Ratio0.1 (1.7)(0.1)(2.5)
Total Incurred Loss and LAE Ratio65.8 65.8 73.1 67.8 
Insurance Expense Ratio30.4 31.7 32.1 31.1 
Combined Ratio96.2 %97.5 %105.2 %98.9 %
Underlying Combined Ratio1
Current Year Non-catastrophe Losses and LAE Ratio63.2 %64.9 %58.3 %64.2 %
Insurance Expense Ratio30.4 31.7 32.1 31.1 
Underlying Combined Ratio1
93.6 %96.6 %90.4 %95.3 %
Non-GAAP Measure Reconciliation
Combined Ratio96.2 %97.5 %105.2 %98.9 %
Less:
Current Year Catastrophe Losses and LAE Ratio(3.1)6.4 11.9 8.4 
Prior Years Non-catastrophe Losses and LAE Ratio5.6 (3.8)3.0 (2.3)
Prior Years Catastrophe Losses and LAE Ratio0.1 (1.7)(0.1)(2.5)
Underlying Combined Ratio1
93.6 %96.6 %90.4 %95.3 %

8

Unaudited selected financial information for the Life & Health Insurance segment follows.
Three Months EndedYear Ended
(Dollars in Millions)Dec 31,
2020		Dec 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations
Earned Premiums$162.4 $160.9 $648.7 $643.7 
Net Investment Income52.8 52.0 198.8 206.4 
Other Income— 2.9 0.6 8.5 
Total Revenues215.2 215.8 848.1 858.6 
Policyholders’ Benefits and Incurred Losses and LAE121.8 95.0 442.0 402.7 
Insurance Expenses83.8 85.3 334.9 334.0 
Operating Profit 9.6 35.5 71.2 121.9 
Income Tax Expense(0.2)(6.6)(11.2)(23.2)
Segment Net Operating Income$9.4 $28.9 $60.0 $98.7 
Use of Non-GAAP Financial Measures
Adjusted Consolidated Net Operating Income1
Adjusted Consolidated Net Operating Income1 is an after-tax, non-GAAP financial measure computed by excluding from Net Income the after-tax impact of 1) income (loss) from change in fair value of equity and convertible securities, 2) net realized gains on sales of investments, 3) impairment losses 4) acquisition related transaction, integration and other costs, 5) debt extinguishment, pension and other charges, and 6) 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.
Kemper believes that Adjusted Consolidated Net Operating Income1 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 Equity and Convertible Securities, Net Realized Gains on Sales of Investments and Impairment Losses related to investments included in the Company’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 the Company’s investments, the timing of which is unrelated to the insurance underwriting process. Acquisition Related Transaction and Integration 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 and Other Charges relate to (i) loss from early extinguishment of debt, which is driven by the Company’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 are made by the Company, 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. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.

9

A reconciliation of Net Income to Adjusted Consolidated Net Operating Income1 for the three and twelve months ended December 31, 2020 and 2019 is presented below.
Three Months EndedYear Ended
(Dollars in Millions) (Unaudited)Dec 31,
2020		Dec 31,
2019		Dec 31,
2020		Dec 31,
2019
Net Income$97.5 $124.7 $409.9 $531.1 
Less Net Income (Loss) From:
Change in Fair Value of Equity and Convertible Securities57.8 30.9 57.0 109.7 
Net Realized Gains on Sales of Investments(0.1)2.2 30.1 33.1 
Impairment Losses0.4 (1.3)(15.4)(10.9)
Acquisition Related Transaction, Integration and Other Costs(15.8)(5.0)(50.0)(14.5)
Debt Extinguishment, Pension and Other Charges(50.6)— (50.6)(4.6)
Adjusted Consolidated Net Operating Income1
$105.8 $97.9 $438.8 $418.3 
Diluted Adjusted Consolidated Net Operating Income Per Unrestricted Share1
Diluted Adjusted Consolidated Net Operating Income Per Unrestricted Share1 is a non-GAAP financial measure computed by dividing Adjusted Consolidated Net Operating Income1 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.
A reconciliation of Diluted Net Income to Diluted Adjusted Consolidated Net Operating Income Per Unrestricted Share1 for the three and twelve months ended December 31, 2020 and 2019 is presented below.
 Three Months EndedYear Ended
(Unaudited)Dec 31,
2020		Dec 31,
2019		Dec 31,
2020		Dec 31,
2019
Diluted Net Income$1.46 $1.85 $6.14 $7.96 
Less Net Income (Loss) Per Unrestricted Share From:
Change in Fair Value of Equity and Convertible Securities0.86 0.46 0.86 1.64 
Net Realized Gains on Sales of Investments— 0.03 0.45 0.50 
Impairment Losses0.01 (0.02)(0.23)(0.16)
Acquisition Related Transaction, Integration and Other Costs(0.24)(0.07)(0.75)(0.22)
Debt Extinguishment, Pension and Other Charges(0.76)— (0.76)(0.07)
Diluted Adjusted Consolidated Net Operating Income Per Unrestricted Share1
$1.59 $1.45 $6.57 $6.27 
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1 is a ratio that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity after excluding the after-tax impact of net unrealized gains 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 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.


10

A reconciliation of the numerator used in the computation of Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1 and Book Value Per Share at December 31, 2020 and December 31, 2019 is presented below.
(Dollars in Millions) (Unaudited)Dec 31,
2020		Dec 31,
2019
Shareholders’ Equity$4,563.4 $3,972.3 
Net Unrealized Gains on Fixed Maturities724.0 434.0 
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities1
$3,839.4 $3,538.3 
Underlying Combined Ratio1
Underlying Combined Ratio1 is a non-GAAP financial measure that 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, including the impact of catastrophe losses and loss and LAE reserve development from prior years, with the insurance expense ratio. Kemper believes the Underlying Combined Ratio is useful to investors and is used by management to reveal the trends in Kemper’s property and casualty insurance businesses that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses may cause 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 development is 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 the company’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 its underwriting performance. The Underlying Combined Ratio1 should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.
Conference Call
Kemper will discuss its fourth quarter 2020 results in a conference call on Monday, February 1st, at 5:00 p.m. Eastern (4:00 p.m. Central) Time. Kemper’s conference call will be accessible via the internet and by telephone. The phone number for Kemper’s conference call is 844.826.3041. 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 2020, 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 $14.3 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 Auto, Personal Insurance, Life and Health brands. Kemper serves over 6.2 million policies, is represented by more than 30,000 agents and brokers, and has 9,500 associates dedicated to meeting the ever-changing needs of its customers.
Learn more about Kemper at the Company’s website, 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. Forward-looking statements give expectations or forecasts of future events and can be identified by the fact that they relate to future actions, performance or results rather than strictly to historical or current facts.

11

Any or all forward-looking statements may turn out to be wrong, and, accordingly, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this press release. Forward-looking statements involve a number of risks and uncertainties that are difficult to predict and are not guarantees of future performance. Among the general factors that could cause actual results and financial condition to differ materially from estimated results and financial condition are those factors listed in periodic reports filed by Kemper with the Securities and Exchange Commission (“SEC”). The COVID-19 outbreak and subsequent global pandemic (“Pandemic”) is an extraordinary event that creates unique uncertainties and risks. Kemper cannot provide any assurances as to the impacts of the Pandemic and related economic conditions on the Company’s operating and financial results.
No assurances can be given that the results and financial condition contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable. 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. The reader is advised, however, to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.
###

Contacts

Investors: Christine Patrick

312.661.4803 or [email protected]
Media: Barbara Ciesemier
312.661.4521 or [email protected]
12
Exhibit 99.2

kemperlogocolorwebfinala051b.jpg

Investor Supplement
Fourth Quarter 2020
The financial statements and financial exhibits included herein are unaudited. These financial statements and exhibits should be read in conjunction with the Company’s periodic reports on Forms 10-K, 10-Q and 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”). The results of operations for interim periods should not be considered indicative of results to be expected for the full year.
Non-GAAP Financial Measures
This document contains non-GAAP financial measures to analyze the Company’s operating performance for the periods presented. Because the Company’s calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing the Company’s non-GAAP financial measures to those of other companies. For detailed disclosures on non-GAAP financial measures please refer to the “Definitions of Non-GAAP Financial Measures” on Page 34.
Caution Regarding Forward-Looking Statements

This Investor Supplement 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. Forward-looking statements give expectations or forecasts of future events and can be identified by the fact that they relate to future actions, performance or results rather than strictly to historical or current facts.

Any or all forward-looking statements may turn out to be wrong, and, accordingly, readers are cautioned not to place undue reliance on such statements, which speak only as of the date this Investor Supplement was included as an exhibit to the Company's Current Report on Form 8-K. Forward-looking statements involve a number of risks and uncertainties that are difficult to predict and are not guarantees of future performance. Among the general factors that could cause actual results and financial condition to differ materially from estimated results and financial condition are those factors listed in periodic reports filed by Kemper Corporation with the SEC. The COVID-19 outbreak and subsequent global pandemic (“Pandemic”) is an extraordinary event that creates unique uncertainties and risks. Kemper cannot provide any assurances as to the impacts of the Pandemic and related economic conditions on the Company’s operating and financial results.

No assurances can be given that the results and financial condition contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable. 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 Investor Supplement, including any such statements related to the Pandemic. The reader is advised, however, to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.



Kemper Corporation
Investor Supplement
Fourth Quarter 2020
Table of Contents
 
 Page
Consolidated Financial Highlights3
Consolidated Statements of Income4
Consolidated Balance Sheets5
Consolidated Statements of Cash Flows6-7
Capital Metrics8-9
Debt Outstanding and Ratings10
Segment Summary Results:
Revenues11
Operating Profit12
Net Operating Income12
Catastrophe Frequency and Severity13
Specialty Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information14-15
Specialty Personal Automobile Insurance16
Commercial Automobile Insurance17
Preferred Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information18-19
Preferred Personal Automobile Insurance20
Homeowners and Other Personal Insurance21
Homeowners Insurance22
Other Personal Insurance23
Life & Health Insurance Segment - Results of Operations and Selected Financial Information24
Life Insurance25
Accident and Health Insurance25
Property Insurance26
Expenses27
Details of Investment Performance28
Details of Invested Assets29-30
Investment Concentration31
Municipal Bond Securities32
Investments in Limited Liability Companies and Limited Partnerships33
Definitions of Non-GAAP Financial Measures34-35
 




Kemper Corporation
Consolidated Financial Highlights
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
 Three Months EndedYear Ended
Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
For Period Ended
Earned Premiums
$1,214.0 $1,206.5 $1,085.3 $1,166.4 $1,145.8 $1,135.2 $1,116.6 $1,074.8 $4,672.2 $4,472.4 
Net Investment Income
102.7 92.1 67.8 85.6 93.9 91.7 96.0 82.7 348.2 364.3 
Other Income
1.9 0.9 1.5 90.3 3.7 7.2 22.7 1.9 94.6 35.5 
Income (Loss) from Change in Fair Value of Equity and Convertible Securities
73.1 45.2 71.6 (117.8)39.2 9.8 25.5 64.4 72.1 138.9 
Net Investment Gains (Loss)
0.4 9.0 4.7 4.5 1.1 (0.1)14.6 12.5 18.6 28.1 
Total Revenues
$1,392.1 $1,353.7 $1,230.9 $1,229.0 $1,283.7 $1,243.8 $1,275.4 $1,236.3 $5,205.7 $5,039.2 
Net Income
$97.5 $122.3 $126.1 $64.0 $124.7 $129.0 $122.1 $155.3 $409.9 $531.1 
Adjusted Consolidated Net Operating Income 1
$105.8 $90.9 $79.2 $162.9 $97.9 $130.0 $91.5 $98.9 $438.8 $418.3 
Per Unrestricted Common Share Amounts:
Basic:
Net Income
$1.49 $1.87 $1.93 $0.96 $1.87 $1.93 $1.87 $2.38 $6.24 $8.04 
Adjusted Consolidated Net Operating Income 1
$1.62 $1.39 $1.21 $2.45 $1.46 $1.95 $1.39 $1.52 $6.68 $6.33 
Diluted:
Net Income
$1.46 $1.83 $1.91 $0.95 $1.85 $1.91 $1.84 $2.35 $6.14 $7.96 
Adjusted Consolidated Net Operating Income 1
$1.59 $1.36 $1.20 $2.43 $1.45 $1.93 $1.38 $1.50 $6.57 $6.27 
Dividends Paid to Shareholders Per Share
$0.30 $0.30 $0.30 $0.30 $0.28 $0.25 $0.25 $0.25 $1.20 $1.03 
At Period End
Total Assets
$14,341.9 $14,090.4 $13,489.4 $12,932.3 $12,989.1 $12,819.9 $12,616.5 $12,182.2 
Insurance Reserves
$5,510.0 $5,461.5 $5,375.0 $5,442.4 $5,471.8 $5,441.3 $5,426.1 $5,370.4 
Debt
$1,172.8 $1,173.0 $777.7 $778.1 $778.4 $778.7 $873.3 $908.5 
Shareholders’ Equity
$4,563.4 $4,347.5 $4,187.9 $3,760.8 $3,972.3 $3,894.2 $3,683.7 $3,320.1 
Shareholders’ Equity Excluding Goodwill1,2
$3,449.4 $3,233.5 $3,073.9 $2,646.8 $2,858.3 $2,780.2 $2,569.7 $2,208.6 
Common Shares Issued and Outstanding (In Millions)
65.436 65.406 65.282 65.365 66.666 66.642 66.564 64.931 
Book Value Per Share2
$69.74 $66.47 $64.15 $57.54 $59.59 $58.43 $55.34 $51.13 
Book Value Per Share Excluding Goodwill1,2
$52.71 $49.44 $47.09 $40.49 $42.87 $41.72 $38.60 $34.01 
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1,2
$58.67 $56.63 $55.13 $53.53 $53.08 $51.51 $49.82 $47.41 
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities and Goodwill1,2
$41.65 $39.60 $38.07 $36.49 $36.36 $34.80 $33.08 $30.29 
Debt to Total Capitalization2
20.4 %21.2 %15.7 %17.1 %16.4 %16.7 %19.2 %21.5 %
Rolling 12 Months Return on 5-point Average Shareholders Equity2,3
9.8 %10.8 %11.4 %11.8 %14.8 %12.1 %12.4 %10.8 %
1 Non-GAAP Financial Measure. See page 34 for definition.
2 See Capital Metrics on pages 8-9 for detail calculations.
3 Rolling 12 Months Return on 5-point Average Shareholders Equity is calculated by taking the last 12 months of Net Income (Loss) divided by the 5-point average Shareholders’ Equity. The 5-point Average Shareholders’ Equity is calculated by using a 5-point quarter average of Shareholders’ Equity for the 12 month period.
3


Kemper Corporation
Consolidated Statements of Income
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Revenues:
Earned Premiums$1,214.0 $1,206.5 $1,085.3 $1,166.4 $1,145.8 $1,135.2 $1,116.6 $1,074.8 $4,672.2 $4,472.4 
Net Investment Income102.7 92.1 67.8 85.6 93.9 91.7 96.0 82.7 348.2 364.3 
Other Income1.9 0.9 1.5 90.3 3.7 7.2 22.7 1.9 94.6 35.5 
Income (Loss) from Change in Fair Value of Equity and Convertible Securities73.1 45.2 71.6 (117.8)39.2 9.8 25.5 64.4 72.1 138.9 
Net Realized Gains (Losses) on Sales of Investments(0.1)10.0 11.7 16.5 2.8 1.7 21.3 16.1 38.1 41.9 
Impairment Losses0.5 (1.0)(7.0)(12.0)(1.7)(1.8)(6.7)(3.6)(19.5)(13.8)
Total Revenues1,392.1 1,353.7 1,230.9 1,229.0 1,283.7 1,243.8 1,275.4 1,236.3 5,205.7 5,039.2 
Expenses:
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses863.4 877.5 747.5 835.2 814.9 782.6 825.4 765.4 3,323.6 3,188.3 
Insurance Expenses279.3 276.9 272.7 271.6 265.4 256.0 263.5 234.8 1,100.5 1,019.7 
Loss from Early Extinguishment of Debt— — — — — 5.8 — — — 5.8 
Interest and Other Expenses128.8 47.2 51.0 44.5 46.5 37.9 38.0 41.4 271.5 163.8 
Total Expenses1,271.5 1,201.6 1,071.2 1,151.3 1,126.8 1,082.3 1,126.9 1,041.6 4,695.6 4,377.6 
Income before Income Taxes120.6 152.1 159.7 77.7 156.9 161.5 148.5 194.7 510.1 661.6 
Income Tax Expense(23.1)(29.8)(33.6)(13.7)(32.2)(32.5)(26.4)(39.4)(100.2)(130.5)
Net Income $97.5 $122.3 $126.1 $64.0 $124.7 $129.0 $122.1 $155.3 $409.9 $531.1 
Income Per Unrestricted Share:
Basic$1.49 $1.87 $1.93 $0.96 $1.87 $1.93 $1.87 $2.38 $6.24 $8.04 
Diluted$1.46 $1.83 $1.91 $0.95 $1.85 $1.91 $1.84 $2.35 $6.14 $7.96 
Net Income Per Unrestricted Share:
Basic$1.49 $1.87 $1.93 $0.96 $1.87 $1.93 $1.87 $2.38 $6.24 $8.04 
Diluted$1.46 $1.83 $1.91 $0.95 $1.85 $1.91 $1.84 $2.35 $6.14 $7.96 
Dividends Paid to Shareholders Per Share$0.30 $0.30 $0.30 $0.30 $0.28 $0.25 $0.25 $0.25 $1.20 $1.03 
Weighted Average Unrestricted Common Shares Outstanding (in Millions)65.414 65.363 65.258 66.516 66.650 66.622 65.408 64.815 65.636 65.881 
 

4


Kemper Corporation
Consolidated Balance Sheets
(Dollars in Millions)
(Unaudited)
Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019
Assets:
Investments:
Fixed Maturities at Fair Value$7,605.9 $7,504.8 $7,480.4 $6,998.5 $6,922.1 $6,883.6 $6,540.2 $6,573.1 
Equity Securities at Fair Value858.5 788.2 783.3 709.8 907.3 928.7 923.3 916.9 
Equity Securities at Modified Cost40.1 48.4 48.1 44.8 41.9 41.2 38.1 39.2 
Equity Method Limited Liability Investments225.3 206.2 209.9 226.3 220.4 213.4 219.7 197.8 
Convertible Securities at Fair Value39.9 36.3 35.0 32.8 37.3 35.6 34.3 33.8 
Short-term Investments at Cost which Approximates Fair Value875.4 628.8 154.2 166.7 470.9 424.2 642.5 350.4 
Other Investments779.0 762.8 757.5 760.2 661.5 561.6 554.3 485.9 
Total Investments10,424.1 9,975.5 9,468.4 8,939.1 9,261.4 9,088.3 8,952.4 8,597.1 
Cash206.1 352.2 389.3 301.3 136.8 133.6 104.4 107.0 
Receivables from Policyholders1,194.5 1,249.3 1,165.3 1,219.1 1,117.1 1,139.8 1,095.2 1,048.6 
Other Receivables222.4 214.0 207.1 207.8 219.7 217.1 248.1 254.6 
Deferred Policy Acquisition Costs589.3 578.2 560.8 551.5 537.7 536.5 521.0 499.2 
Goodwill1,114.0 1,114.0 1,114.0 1,114.0 1,114.0 1,114.0 1,114.0 1,111.5 
Current Income Tax Assets15.6 33.1 3.5 17.8 44.7 44.1 41.0 19.7 
Other Assets575.9 574.1 581.0 581.7 557.7 546.5 540.4 544.5 
Total Assets$14,341.9 $14,090.4 $13,489.4 $12,932.3 $12,989.1 $12,819.9 $12,616.5 $12,182.2 
Liabilities and Shareholders’ Equity:
Insurance Reserves:
Life and Health$3,527.5 $3,511.5 $3,497.7 $3,500.8 $3,502.0 $3,499.7 $3,514.2 $3,501.7 
Property and Casualty1,982.5 1,950.0 1,877.3 1,941.6 1,969.8 1,941.6 1,911.9 1,868.7 
Total Insurance Reserves5,510.0 5,461.5 5,375.0 5,442.4 5,471.8 5,441.3 5,426.1 5,370.4 
Unearned Premiums1,615.1 1,681.6 1,642.6 1,621.4 1,545.5 1,574.9 1,545.6 1,499.5 
Policyholder Contract Liabilities467.0 503.7 520.3 430.5 309.8 204.1 221.8 254.5 
Deferred Income Tax Liabilities285.7 245.5 226.8 116.0 178.2 175.3 124.1 82.6 
Liability for Unrecognized Tax Benefits— — — — — — — 3.9 
Accrued Expenses and Other Liabilities727.9 677.6 759.1 783.1 733.1 751.4 741.9 742.7 
Long-term Debt, Current and Non-current, at Amortized Cost1,172.8 1,173.0 777.7 778.1 778.4 778.7 873.3 908.5 
Total Liabilities9,778.5 9,742.9 9,301.5 9,171.5 9,016.8 8,925.7 8,932.8 8,862.1 
Shareholders’ Equity:
Common Stock6.5 6.5 6.5 6.5 6.7 6.7 6.7 6.5 
Paid-in Capital1,805.2 1,798.5 1,792.5 1,788.2 1,819.2 1,812.9 1,806.4 1,673.0 
Retained Earnings2,071.2 1,993.5 1,891.6 1,791.2 1,810.3 1,704.5 1,593.7 1,489.7 
Accumulated Other Comprehensive Income680.5 549.0 497.3 174.9 336.1 370.1 276.9 150.9 
Total Shareholders’ Equity4,563.4 4,347.5 4,187.9 3,760.8 3,972.3 3,894.2 3,683.7 3,320.1 
Total Liabilities and Shareholders’ Equity$14,341.9 $14,090.4 $13,489.4 $12,932.3 $12,989.1 $12,819.9 $12,616.5 $12,182.2 
5


Kemper Corporation
Consolidated Statements of Cash Flows
(Dollars in Millions)
 (Unaudited)
 Year Ended
 Dec 31,
2020		Dec 31,
2019
Cash Flows from Operating Activities:
Net Income$409.9 $531.1 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Net Realized Investment Gains(38.1)(41.9)
Impairment Losses19.5 13.8 
Depreciation and Amortization of Property, Equipment and Software36.2 32.8 
Amortization of Intangibles Assets Acquired18.8 29.7 
Settlement Costs Related to Defined Benefit Pension Plan64.1 — 
Contribution to Defined Benefit Pension Plan — (55.3)
Loss from Early Extinguishment of Debt— 5.8 
Change in Accumulated Undistributed Earnings of Equity Method Limited Liability Investments(4.0)10.9 
Decrease (Increase) in Value of Equity and Convertible Securities at Fair Value(72.1)(138.9)
Changes in:
Receivables from Policyholders(77.4)(110.1)
Reinsurance Recoverables16.8 35.6 
Deferred Policy Acquisition Costs(52.3)(66.9)
Insurance Reserves38.3 102.3 
Unearned Premiums69.6 121.2 
Income Taxes60.5 58.8 
Other(64.7)5.4 
Net Cash Provided by Operating Activities425.1 534.3 
6


Kemper Corporation
Consolidated Statements of Cash Flows
(Dollars in Millions)
 (Unaudited)
 Year Ended
 Dec 31,
2020		Dec 31,
2019
Cash Flows from Investing Activities:
Proceeds from Sales, Calls, and Maturities of Fixed Maturities975.9 1,229.1 
Proceeds from the Sales of Investments:
Equity Securities463.0 217.3 
Real Estate Investments5.4 — 
Mortgage Loans25.5 17.2 
Other Investments45.2 29.5 
Fixed Maturities(1,293.3)(1,284.9)
Equity Securities(347.7)(307.0)
Real Estate Investments(0.5)(1.4)
Corporate-owned Life Insurance(100.0)(150.0)
Mortgage Loans(52.7)(44.5)
Other Investments(43.5)(73.8)
Net Purchases of Short-term Investments(394.3)(176.0)
Acquisition of Software and Long-lived Assets(53.4)(84.0)
Other13.4 (4.9)
Net Cash Provided (Used In) by Investing Activities(757.0)(633.4)
Cash Flows from Financing Activities:
Net Proceeds from Issuance of Long-term Debt395.6 49.9 
Repayment of Long-term Debt— (185.0)
Proceeds from Policyholder Contract Liabilities454.4 615.8 
Repayment of Policyholder Contract Liabilities(269.3)(383.6)
Proceeds from Issuance of Common Stock, Net of Transaction Costs— 127.5 
Proceeds from Shares Issued under Employee Stock Purchase Plan4.4 1.6 
Common Stock Repurchases(110.4)— 
Dividends and Dividend Equivalents Paid(78.9)(67.8)
Other5.4 2.4 
Net Cash Provided by Financing Activities401.2 160.8 
Increase in Cash69.3 61.7 
Cash, Beginning of Year136.8 75.1 
Cash, End of Period$206.1 $136.8 
7


Kemper Corporation
Capital Metrics
(Dollars and Shares in Millions, Except Per Share Amounts)
(Unaudited)
 Three Months Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019
Book Value Per Share   
Numerator
Shareholders’ Equity$4,563.4 $4,347.5 $4,187.9 $3,760.8 $3,972.3 $3,894.2 $3,683.7 $3,320.1 
Less: Goodwill(1,114.0)(1,114.0)(1,114.0)(1,114.0)(1,114.0)(1,114.0)(1,114.0)(1,111.5)
Shareholders’ Equity Excluding Goodwill1
$3,449.4 $3,233.5 $3,073.9 $2,646.8 $2,858.3 $2,780.2 $2,569.7 $2,208.6 
Shareholders’ Equity$4,563.4 $4,347.5 $4,187.9 $3,760.8 $3,972.3 $3,894.2 $3,683.7 $3,320.1 
Less: Net Unrealized Gains on Fixed Maturities(724.0)(643.7)(588.6)(261.6)(434.0)(461.3)(367.8)(241.9)
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities1
$3,839.4 $3,703.8 $3,599.3 $3,499.2 $3,538.3 $3,432.9 $3,315.9 $3,078.2 
Less: Goodwill(1,114.0)(1,114.0)(1,114.0)(1,114.0)(1,114.0)(1,114.0)(1,114.0)(1,111.5)
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities and Goodwill1
$2,725.4 $2,589.8 $2,485.3 $2,385.2 $2,424.3 $2,318.9 $2,201.9 $1,966.7 
Denominator
Common Shares Issued and Outstanding65.436 65.406 65.282 65.365 66.666 66.642 66.564 64.931 
Book Value Per Share$69.74 $66.47 $64.15 $57.54 $59.59 $58.43 $55.34 $51.13 
Book Value Per Share Excluding Goodwill1
$52.71 $49.44 $47.09 $40.49 $42.87 $41.72 $38.60 $34.01 
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1
$58.67 $56.63 $55.13 $53.53 $53.08 $51.51 $49.82 $47.41 
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities and Goodwill1
$41.65 $39.60 $38.07 $36.49 $36.36 $34.80 $33.08 $30.29 
Return on Shareholders’ Equity
Numerator
Rolling 12 Months Net Income$409.9 $437.1 $443.8 $439.8 $531.1 $412.9 $376.1 $291.6 
Denominator (5-point Average)
5-point Average Shareholders’ Equity$4,166.4 $4,032.5 $3,899.8 $3,726.2 $3,584.1 $3,402.4 $3,032.7 $2,708.7 
Rolling 12 Months Return on Average Shareholders' Equity (5-point Average)9.8 %10.8 %11.4 %11.8 %14.8 %12.1 %12.4 %10.8 %
Return on Shareholders’ Equity Excluding Goodwill1
Denominator (5-point Average)
5-point Average Shareholders’ Equity Excluding Goodwill1
$3,052.4 $2,918.5 $2,785.8 $2,612.7 $2,470.9 $2,293.8 $2,082.3 $1,916.5 
Rolling 12 Months Return on Average Shareholders' Equity Excluding Goodwill (5-point Average)1
13.4 %15.0 %15.9 %16.8 %21.5 %18.0 %18.1 %15.2 %
Return on Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities1
Denominator (5-point Average)
5-point Average Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities1
$3,636.0 $3,554.7 $3,477.1 $3,372.9 $3,261.0 $3,144.6 $2,838.0 $2,549.5 
Rolling 12 Months Return on Average Shareholders' Equity Excluding Net Unrealized Gains on Fixed Maturities (5-point Average)1
11.3 %12.3 %12.8 %13.0 %16.3 %13.1 %13.3 %11.4 %
Return on Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities and Goodwill1
Denominator (5-point Average)
5-point Average Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities and Goodwill1
$2,522.0 $2,440.7 $2,363.1 $2,259.4 $2,147.8 $2,036.0 $1,887.6 $1,757.3 
Rolling 12 Months Return on Average Shareholders' Equity Excluding Net Unrealized Gains on Fixed Maturities and Goodwill (5-point Average)1
16.3 %17.9 %18.8 %19.5 %24.7 %20.3 %19.9 %16.6 %
1 Non-GAAP financial measure. See definitions beginning on page 34
8


Kemper Corporation
Capital Metrics
(Dollars and Shares in Millions, Except Per Share Amounts)
(Unaudited)
 Three Months Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019
Debt and Total Capitalization
Debt$1,172.8 $1,173.0 $777.7 $778.1 $778.4 $778.7 $873.3 $908.5 
Shareholders’ Equity4,563.4 4,347.5 4,187.9 3,760.8 3,972.3 3,894.2 3,683.7 3,320.1 
Total Capitalization$5,736.2 $5,520.5 $4,965.6 $4,538.9 $4,750.7 $4,672.9 $4,557.0 $4,228.6 
Ratio of Debt to Shareholders’ Equity25.7 %27.0 %18.6 %20.7 %19.6 %20.0 %23.7 %27.4 %
Ratio of Debt to Total Capitalization20.4 %21.2 %15.7 %17.1 %16.4 %16.7 %19.2 %21.5 %
Parent Company Liquidity
Kemper Holding Company Cash and Investments$733.2 $738.7 $270.5 $199.1 $206.8 $169.1 $312.7 $118.6 
Borrowings Available Under Credit Agreement400.0 400.0 400.0 400.0 400.0 400.0 400.0 300.0 
Parent Company Liquidity$1,133.2 $1,138.7 $670.5 $599.1 $606.8 $569.1 $712.7 $418.6 
Capital Returned to Shareholders
Cash Dividends Paid$19.7 $19.7 $19.7 $20.0 $18.7 $16.7 $16.2 $16.2 
 

9


Kemper Corporation
Debt Outstanding, FHLB Advances and Ratings
(Dollars in Millions)
(Unaudited)
Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019
Kemper Corporation:
Term Loan due June 29, 2020$— $— $— $— $— $— $— $34.9 
Term Loan due July 5, 202349.9 49.9 49.9 49.9 49.9 49.9 — — 
Senior Notes at Amortized Cost:
5.000% Senior Notes due September 19, 2022278.3 278.7 279.1 279.6 279.9 280.3 280.6 281.0 
4.350% Senior Notes due February 15, 2025448.8 448.8 448.7 448.6 448.6 448.5 448.5 448.4 
2.400% Senior Notes due September 30, 2030395.8 395.6 — — — — — — 
7.375% Subordinated Debentures due February 27, 2054 at Amortized Cost— — — — — — 144.2 144.2 
Long-term Debt Outstanding$1,172.8 $1,173.0 $777.7 $778.1 $778.4 $778.7 $873.3 $908.5 
Federal Home Loan Bank Advances to Insurance Subsidiaries:
Reported as Policyholder Contract Liabilities:
Federal Home Loan Bank of Chicago$407.8 $444.1 $454.3 $364.2 $243.4 $137.6 $155.0 $187.7 
Reported as Debt Outstanding:
Federal Home Loan Bank of Dallas$— $— $— $— $— $— $— $— 
Federal Home Loan Bank of Chicago$— $— $— $— $— $— $— $— 
Federal Home Loan Bank of San Francisco$— $— $— $— $— $— $— $— 
 A.M. BestMoody’sS&PFitch 
As of Date of Financial Supplement
Kemper Debt Ratings:
Senior Unsecured DebtBBBBaa3BBBBBB
Insurance Company Financial Strength Ratings:
Trinity Universal Insurance Company
AA3AA
United Insurance Company of America
AA3A-A-
Reserve National Insurance Company
ANRNRNR
Infinity Insurance Company
AA3ANR



NR - Not Rated

10


Kemper Corporation
Segment Revenues
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Revenues:   
Specialty Property & Casualty Insurance:
Earned Premiums:
Specialty Automobile$796.1 $792.2 $689.8 $753.2 $733.1 $719.2 $703.7 $669.6 $3,031.3 $2,825.6 
Commercial Automobile86.3 79.2 69.2 69.3 66.6 64.2 62.3 59.7 304.0 252.8 
Total Specialty Property & Casualty Insurance Earned Premiums882.4 871.4 759.0 822.5 799.7 783.4 766.0 729.3 3,335.3 3,078.4 
Net Investment Income37.9 30.5 16.9 28.8 28.3 28.8 28.9 21.5 114.1 107.5 
Other Income0.4 0.4 0.1 0.9 0.8 4.4 1.0 0.8 1.8 7.0 
Total Specialty Property & Casualty Insurance Revenues920.7 902.3 776.0 852.2 828.8 816.6 795.9 751.6 3,451.2 3,192.9 
Preferred Property & Casualty Insurance:
Earned Premiums:
Preferred Automobile107.1 110.6 99.1 114.9 117.2 119.7 117.9 115.4 431.7 470.2 
Homeowners53.3 55.0 55.6 56.8 58.7 61.5 60.8 60.3 220.7 241.3 
Other Personal8.8 8.9 8.9 9.2 9.3 9.8 9.8 9.9 35.8 38.8 
Total Preferred Property & Casualty Insurance Earned Premiums169.2 174.5 163.6 180.9 185.2 191.0 188.5 185.6 688.2 750.3 
Net Investment Income13.4 10.3 4.3 9.7 11.5 12.0 12.3 8.3 37.7 44.1 
Other Income— — 0.1 — — — — — 0.1 — 
Total Preferred Property & Casualty Insurance Revenues182.6 184.8 168.0 190.6 196.7 203.0 200.8 193.9 726.0 794.4 
Life & Health Insurance:
Earned Premiums:
Life96.5 96.3 95.7 97.2 95.6 96.2 97.0 95.8 385.7 384.6 
Accident and Health50.2 48.9 50.8 49.4 48.5 47.6 47.9 46.9 199.3 190.9 
Property15.7 15.4 16.2 16.4 16.8 17.0 17.2 17.2 63.7 68.2 
Total Life & Health Insurance Earned Premiums162.4 160.6 162.7 163.0 160.9 160.8 162.1 159.9 648.7 643.7 
Net Investment Income52.8 50.7 44.3 51.0 52.0 49.7 53.0 51.7 198.8 206.4 
Other Income— — 0.5 0.1 2.9 2.9 1.6 1.1 0.6 8.5 
Total Life & Health Insurance Revenues215.2 211.3 207.5 214.1 215.8 213.4 216.7 212.7 848.1 858.6 
Total Segment Revenues1,318.5 1,298.4 1,151.5 1,256.9 1,241.3 1,233.0 1,213.4 1,158.2 5,025.3 4,845.9 
Income (Loss) from Change in Fair Value of Equity and Convertible Securities73.1 45.2 71.6 (117.8)39.2 9.8 25.5 64.4 72.1 138.9 
Net Realized Gains on Sales of Investments(0.1)10.0 11.7 16.5 2.8 1.7 21.3 16.1 38.1 41.9 
Impairment Losses0.5 (1.0)(7.0)(12.0)(1.7)(1.8)(6.7)(3.6)(19.5)(13.8)
Other0.1 1.1 3.1 85.4 2.1 1.1 21.9 1.2 89.7 26.3 
Total Revenues$1,392.1 $1,353.7 $1,230.9 $1,229.0 $1,283.7 $1,243.8 $1,275.4 $1,236.3 $5,205.7 $5,039.2 
 

11


Kemper Corporation
Segment Operating Results
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Segment Operating Profit:  
Specialty Property & Casualty Insurance$111.5 $149.9 $84.5 $75.0 $78.5 $98.6 $79.4 $99.4 $420.9 $355.9 
Preferred Property & Casualty Insurance19.8 (41.8)0.8 23.0 16.1 26.5 6.4 3.3 1.8 52.3 
Life & Health Insurance9.6 15.2 19.9 26.5 35.5 41.0 16.1 29.3 71.2 121.9 
Total Segment Operating Profit140.9 123.3 105.2 124.5 130.1 166.1 101.9 132.0 493.9 530.1 
Partial Satisfaction of Judgment— — — 89.4 — — 20.1 — 89.4 20.1 
Other(9.7)(11.0)(4.7)(11.1)(7.3)(3.1)(12.4)(8.6)(36.5)(31.4)
Corporate and Other Operating Income (Loss)(9.7)(11.0)(4.7)78.3 (7.3)(3.1)7.7 (8.6)52.9 (11.3)
Total Operating Profit131.2 112.3 100.5 202.8 122.8 163.0 109.6 123.4 546.8 518.8 
Income From:
Change in Fair Value of Equity and Convertible Securities73.1 45.2 71.6 (117.8)39.2 9.8 25.5 64.4 72.1 138.9 
Net Realized Gains on Sales of Investments(0.1)10.0 11.7 16.5 2.8 1.7 21.3 16.1 38.1 41.9 
Impairment Losses0.5 (1.0)(7.0)(12.0)(1.7)(1.8)(6.7)(3.6)(19.5)(13.8)
Acquisition Related Transaction Integration and Other Costs(20.0)(14.4)(17.1)(11.8)(6.2)(5.4)(1.2)(5.6)(63.3)(18.4)
Debt Extinguishment, Pension and Other Charges(64.1)— — — — (5.8)— — (64.1)(5.8)
Income before Income Taxes$120.6 $152.1 $159.7 $77.7 $156.9 $161.5 $148.5 $194.7 $510.1 $661.6 
Segment Net Operating Income:
Specialty Property & Casualty Insurance$91.1 $119.2 $67.5 $60.1 $62.3 $78.5 $62.7 $79.6 $337.9 $283.1 
Preferred Property & Casualty Insurance16.9 (32.7)0.9 18.4 12.8 21.1 5.2 2.8 3.5 41.9 
Life & Health Insurance9.4 12.2 16.1 22.3 28.9 33.4 13.3 23.1 60.0 98.7 
Total Segment Net Operating Income117.4 98.7 84.5 100.8 104.0 133.0 81.2 105.5 401.4 423.7 
Corporate and Other Net Operating Income (Loss) From:
Partial Satisfaction of Legal Judgment— — — 70.6 — — 15.9 — 70.6 15.9 
Other(11.6)(7.8)(5.3)(8.5)(6.1)(3.0)(5.6)(6.6)(33.2)(21.3)
Corporate and Other Net Operating Income (Loss)(11.6)(7.8)(5.3)62.1 (6.1)(3.0)10.3 (6.6)37.4 (5.4)
Adjusted Consolidated Net Operating Income105.8 90.9 79.2 162.9 97.9 130.0 91.5 98.9 438.8 418.3 
Net Income (Loss) From:
Change in Fair Value of Equity and Convertible Securities57.8 35.7 56.6 (93.1)30.9 7.8 20.1 50.9 57.0 109.7 
Net Realized Gains on Sales of Investments(0.1)7.9 9.3 13.0 2.2 1.4 16.8 12.7 30.1 33.1 
Impairment Losses0.4 (0.8)(5.5)(9.5)(1.3)(1.5)(5.3)(2.8)(15.4)(10.9)
Acquisition Related Transaction, Integration and Other Costs(15.8)(11.4)(13.5)(9.3)(5.0)(4.1)(1.0)(4.4)(50.0)(14.5)
Debt Extinguishment, Pension and Other Charges(50.6)— — — — (4.6)— — (50.6)(4.6)
Net Income$97.5 $122.3 $126.1 $64.0 $124.7 $129.0 $122.1 $155.3 $409.9 $531.1 
 


12


Kemper Corporation
Catastrophe Frequency and Severity
(Dollars in Millions)
(Unaudited)
Year ended December 31, 2020
Specialty Property & Casualty Insurance SegmentPreferred Property & Casualty Insurance SegmentLife & Health Insurance SegmentConsolidated
Number of EventsLosses and LAENumber of EventsLosses and LAENumber of EventsLosses and LAENumber of EventsLosses and LAE
Range of Losses and LAE Per Event:
Below $555 $12.3 48 $42.0 34 $12.4 60 $51.2 
$5 - $10— — 5 40.0 — — 5 40.2 
$10 - $15— — — — — — — — 
$15 - $20— — — — — — 1 15.3 
$20 - $25— — — — — — — — 
Greater Than $25— — — — — — — — 
Total55 $12.3 53 $82.0 34 $12.4 66 $106.7 
Year ended December 31, 2019
Specialty Property & Casualty Insurance SegmentPreferred Property & Casualty Insurance SegmentLife & Health Insurance SegmentConsolidated
Number of EventsLosses and LAENumber of EventsLosses and LAENumber of EventsLosses and LAENumber of EventsLosses and LAE
Range of Losses and LAE Per Event:
Below $541 $11.1 53 $30.9 29 $3.1 56 $42.4 
$5 - $10— — 3 19.0 — — 3 20.8 
$10 - $15— — 1 13.1 — — 1 14.0 
$15 - $20— — — — — — — — 
$20 - $25— — — — — — — — 
Greater Than $25— — — — — — — — 
Total41 $11.1 57 $63.0 29 $3.1 60 $77.2 
13

Kemper Corporation
Specialty Property & Casualty Insurance Segment
Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations   
Net Premiums Written$829.2 $914.2 $780.9 $911.2 $782.5 $815.0 $804.7 $809.1 $3,435.5 $3,211.3 
Earned Premiums$882.4 $871.4 $759.0 $822.5 $799.7 $783.4 $766.0 $729.3 $3,335.3 $3,078.4 
Net Investment Income37.9 30.5 16.9 28.8 28.3 28.8 28.9 21.5 114.1 107.5 
Other Income0.4 0.4 0.1 0.9 0.8 4.4 1.0 0.8 1.8 7.0 
Total Revenues920.7 902.3 776.0 852.2 828.8 816.6 795.9 751.6 3,451.2 3,192.9 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE626.2 589.0 515.8 619.8 599.5 579.4 579.2 544.3 2,350.8 2,302.4 
Catastrophe Losses and LAE5.5 2.1 4.5 0.2 3.8 2.3 4.4 0.6 12.3 11.1 
Prior Years:
Non-catastrophe Losses and LAE(1.7)1.9 9.6 5.3 (4.1)(4.1)(8.6)(18.3)15.1 (35.1)
Catastrophe Losses and LAE0.1 (0.1)— 0.2 0.2 0.2 (0.1)0.2 0.2 0.5 
Total Incurred Losses and LAE630.1 592.9 529.9 625.5 599.4 577.8 574.9 526.8 2,378.4 2,278.9 
Insurance Expenses179.1 159.5 161.2 152.1 150.7 139.2 140.9 124.8 651.9 555.6 
Other Expenses— — 0.4 (0.4)0.2 1.0 0.7 0.6 — 2.5 
Operating Profit111.5 149.9 84.5 75.0 78.5 98.6 79.4 99.4 420.9 355.9 
Income Tax Expense(20.4)(30.7)(17.0)(14.9)(16.2)(20.1)(16.7)(19.8)(83.0)(72.8)
Segment Net Operating Income $91.1 $119.2 $67.5 $60.1 $62.3 $78.5 $62.7 $79.6 $337.9 $283.1 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio71.0 %67.6 %67.9 %75.4 %75.0 %74.0 %75.6 %74.6 %70.4 %74.7 %
Current Year Catastrophe Losses and LAE Ratio0.6 0.2 0.6 — 0.5 0.3 0.6 0.1 0.4 0.4 
Prior Years Non-catastrophe Losses and LAE Ratio(0.2)0.2 1.3 0.6 (0.5)(0.5)(1.1)(2.5)0.5 (1.1)
Prior Years Catastrophe Losses and LAE Ratio— — — — — — — — — — 
Total Incurred Loss and LAE Ratio71.4 68.0 69.8 76.0 75.0 73.8 75.1 72.2 71.3 74.0 
Insurance Expense Ratio20.3 18.3 21.2 18.5 18.8 17.8 18.4 17.1 19.5 18.0 
Combined Ratio91.7 %86.3 %91.0 %94.5 %93.8 %91.6 %93.5 %89.3 %90.8 %92.0 %
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio71.0 %67.6 %67.9 %75.4 %75.0 %74.0 %75.6 %74.6 %70.4 %74.7 %
Insurance Expense Ratio20.3 18.3 21.2 18.5 18.8 17.8 18.4 17.1 19.5 18.0 
Underlying Combined Ratio91.3 %85.9 %89.1 %93.9 %93.8 %91.8 %94.0 %91.7 %89.9 %92.7 %
Non-GAAP Measure Reconciliation
Combined Ratio as Reported91.7 %86.3 %91.0 %94.5 %93.8 %91.6 %93.5 %89.3 %90.8 %92.0 %
Less:
Current Year Catastrophe Losses and LAE Ratio0.6 0.2 0.6 — 0.5 0.3 0.6 0.1 0.4 0.4 
Prior Years Non-catastrophe Losses and LAE Ratio(0.2)0.2 1.3 0.6 (0.5)(0.5)(1.1)(2.5)0.5 (1.1)
Prior Years Catastrophe Losses and LAE Ratio— — — — — — — — — — 
Underlying Combined Ratio91.3 %85.9 %89.1 %93.9 %93.8 %91.8 %94.0 %91.7 %89.9 %92.7 %
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
14

Kemper Corporation
Specialty Property & Casualty Insurance Segment
Results of Operations and Selected Financial Information (continued)
(Dollars in Millions)
(Unaudited)
Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019
Insurance Reserves:
Non-Standard Automobile$1,308.3 $1,271.9 $1,252.6 $1,326.3 $1,321.9 $1,278.7 $1,229.7 $1,181.2 
Commercial Automobile236.5 223.0 221.0 215.1 229.1 223.9 218.9 218.4 
Insurance Reserves$1,544.8 $1,494.9 $1,473.6 $1,541.4 $1,551.0 $1,502.6 $1,448.6 $1,399.6 
Insurance Reserves:
Loss and Allocated LAE Reserves:
Case and Allocated LAE$744.6 $718.8 $667.9 $716.0 $730.0 $760.2 $721.6 $696.1 
Incurred but Not Reported653.6 631.8 660.8 679.1 672.2 598.8 587.8 565.6 
Total Loss Reserves1,398.2 1,350.6 1,328.7 1,395.1 1,402.2 1,359.0 1,309.4 1,261.7 
Unallocated LAE Reserves146.6 144.3 144.9 146.3 148.8 143.6 139.2 137.9 
Insurance Reserves$1,544.8 $1,494.9 $1,473.6 $1,541.4 $1,551.0 $1,502.6 $1,448.6 $1,399.6 

15


Kemper Corporation
Specialty Property & Casualty Insurance Segment
Specialty Personal Automobile Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations   
Net Premiums Written$736.3 $819.4 $700.5 $830.3 $714.9 $749.5 $734.5 $742.2 $3,086.5 $2,941.1 
Earned Premiums$796.1 $792.2 $689.8 $753.2 $733.1 $719.2 $703.7 $669.6 $3,031.3 $2,825.6 
Net Investment Income32.4 26.2 15.2 24.8 24.5 24.9 24.6 18.4 98.6 92.4 
Other Income0.4 0.4 0.1 0.8 0.8 4.3 0.9 0.8 1.7 6.8 
Total Revenues828.9 818.8 705.1 778.8 758.4 748.4 729.2 688.8 3,131.6 2,924.8 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE569.1 543.4 472.4 576.0 557.5 538.2 537.0 498.8 2,160.9 2,131.5 
Catastrophe Losses and LAE5.2 2.0 4.2 0.2 3.3 2.0 4.1 0.5 11.6 9.9 
Prior Years:
Non-catastrophe Losses and LAE(3.1)2.1 11.2 17.8 (4.4)(1.8)(3.7)(14.4)28.0 (24.3)
Catastrophe Losses and LAE— (0.1)0.1 0.2 0.2 0.2 — 0.1 0.2 0.5 
Total Incurred Losses and LAE571.2 547.4 487.9 594.2 556.6 538.6 537.4 485.0 2,200.7 2,117.6 
Insurance Expenses162.8 145.6 146.7 139.2 138.1 128.4 128.9 114.7 594.3 510.1 
Other Expenses— — 0.4 (0.4)0.2 1.0 0.7 0.6 — 2.5 
Operating Profit94.9 125.8 70.1 45.8 63.5 80.4 62.2 88.5 336.6 294.6 
Income Tax Expense(17.5)(25.7)(14.2)(8.8)(10.5)(18.4)(13.0)(17.8)(66.2)(59.7)
Total Product Line Net Operating Income$77.4 $100.1 $55.9 $37.0 $53.0 $62.0 $49.2 $70.7 $270.4 $234.9 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio71.4 %68.5 %68.5 %76.5 %76.0 %74.9 %76.3 %74.5 %71.3 %75.4 %
Current Year Catastrophe Losses and LAE Ratio0.7 0.3 0.6 — 0.5 0.3 0.6 0.1 0.4 0.4 
Prior Years Non-catastrophe Losses and LAE Ratio(0.4)0.3 1.6 2.4 (0.6)(0.3)(0.5)(2.2)0.9 (0.9)
Prior Years Catastrophe Losses and LAE Ratio— — — — — — — — — — 
Total Incurred Loss and LAE Ratio71.7 69.1 70.7 78.9 75.9 74.9 76.4 72.4 72.6 74.9 
Insurance Expense Ratio20.4 18.4 21.3 18.5 18.8 17.9 18.3 17.1 19.6 18.1 
Combined Ratio92.1 %87.5 %92.0 %97.4 %94.7 %92.8 %94.7 %89.5 %92.2 %93.0 %
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio71.4 %68.5 %68.5 %76.5 %76.0 %74.9 %76.3 %74.5 %71.3 %75.4 %
Insurance Expense Ratio20.4 18.4 21.3 18.5 18.8 17.9 18.3 17.1 19.6 18.1 
Underlying Combined Ratio91.8 %86.9 %89.8 %95.0 %94.8 %92.8 %94.6 %91.6 %90.9 %93.5 %
Non-GAAP Measure Reconciliation
Combined Ratio92.1 %87.5 %92.0 %97.4 %94.7 %92.8 %94.7 %89.5 %92.2 %93.0 %
Less:
Current Year Catastrophe Losses and LAE Ratio0.7 0.3 0.6 — 0.5 0.3 0.6 0.1 0.4 0.4 
Prior Years Non-catastrophe Losses and LAE Ratio(0.4)0.3 1.6 2.4 (0.6)(0.3)(0.5)(2.2)0.9 (0.9)
Prior Years Catastrophe Losses and LAE Ratio— — — — — — — — — — 
Underlying Combined Ratio91.8 %86.9 %89.8 %95.0 %94.8 %92.8 %94.6 %91.6 %90.9 %93.5 %
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
16


Kemper Corporation
Specialty Property & Casualty Insurance Segment
Commercial Automobile Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations   
Net Premiums Written$92.9 $94.8 $80.4 $80.9 $67.6 $65.5 $70.2 $66.9 $349.0 $270.2 
Earned Premiums$86.3 $79.2 $69.2 $69.3 $66.6 $64.2 $62.3 $59.7 $304.0 $252.8 
Net Investment Income5.5 4.3 1.7 4.0 3.8 3.9 4.3 3.1 15.5 15.1 
Other Income— — — 0.1 — 0.1 0.1 — 0.1 0.2 
Total Revenues91.8 83.5 70.9 73.4 70.4 68.2 66.7 62.8 319.6 268.1 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE57.1 45.6 43.4 43.8 42.0 41.2 42.2 45.5 189.9 170.9 
Catastrophe Losses and LAE0.3 0.1 0.3 — 0.5 0.3 0.3 0.1 0.7 1.2 
Prior Years:
Non-catastrophe Losses and LAE1.4 (0.2)(1.6)(12.5)0.3 (2.3)(4.9)(3.9)(12.9)(10.8)
Catastrophe Losses and LAE0.1 — (0.1)— — — (0.1)0.1 — — 
Total Incurred Losses and LAE58.9 45.5 42.0 31.3 42.8 39.2 37.5 41.8 177.7 161.3 
Insurance Expenses16.3 13.9 14.5 12.9 12.6 10.8 12.0 10.1 57.6 45.5 
Operating Profit16.6 24.1 14.4 29.2 15.0 18.2 17.2 10.9 84.3 61.3 
Income Tax Expense(2.9)(5.0)(2.8)(6.1)(5.7)(1.7)(3.7)(2.0)(16.8)(13.1)
Total Product Line Net Operating Income$13.7 $19.1 $11.6 $23.1 $9.3 $16.5 $13.5 $8.9 $67.5 $48.2 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio66.3 %57.6 %62.7 %63.2 %63.0 %64.2 %67.7 %76.1 %62.5 %67.6 %
Current Year Catastrophe Losses and LAE Ratio0.3 0.1 0.4 — 0.8 0.5 0.5 0.2 0.2 0.5 
Prior Years Non-catastrophe Losses and LAE Ratio1.6 (0.3)(2.3)(18.0)0.5 (3.6)(7.9)(6.5)(4.2)(4.3)
Prior Years Catastrophe Losses and LAE Ratio0.1 — (0.1)— — — (0.1)0.2 — — 
Total Incurred Loss and LAE Ratio68.3 57.4 60.7 45.2 64.3 61.1 60.2 70.0 58.5 63.8 
Insurance Expense Ratio18.9 17.6 21.0 18.6 18.9 16.8 19.3 16.9 18.9 18.0 
Combined Ratio87.2 %75.0 %81.7 %63.8 %83.2 %77.9 %79.5 %86.9 %77.4 %81.8 %
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio66.3 %57.6 %62.7 %63.2 %63.0 %64.2 %67.7 %76.1 %62.5 %67.6 %
Insurance Expense Ratio18.9 17.6 21.0 18.6 18.9 16.8 19.3 16.9 18.9 18.0 
Underlying Combined Ratio85.2 %75.2 %83.7 %81.8 %81.9 %81.0 %87.0 %93.0 %81.4 %85.6 %
Non-GAAP Measure Reconciliation
Combined Ratio87.2 %75.0 %81.7 %63.8 %83.2 %77.9 %79.5 %86.9 %77.4 %81.8 %
Less:
Current Year Catastrophe Losses and LAE Ratio0.3 0.1 0.4 — 0.8 0.5 0.5 0.2 0.2 0.5 
Prior Years Non-catastrophe Losses and LAE Ratio1.6 (0.3)(2.3)(18.0)0.5 (3.6)(7.9)(6.5)(4.2)(4.3)
Prior Years Catastrophe Losses and LAE Ratio0.1 — (0.1)— — — (0.1)0.2 — — 
Underlying Combined Ratio85.2 %75.2 %83.7 %81.8 %81.9 %81.0 %87.0 %93.0 %81.4 %85.6 %
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
17


Kemper Corporation
Preferred Property & Casualty Insurance Segment
Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations   
Net Premiums Written$155.2 $172.2 $161.5 $164.1 $172.6 $189.6 $197.5 $179.6 $653.0 $739.3 
Earned Premiums$169.2 $174.5 $163.6 $180.9 $185.2 $191.0 $188.5 $185.6 $688.2 $750.3 
Net Investment Income13.4 10.3 4.3 9.7 11.5 12.0 12.3 8.3 37.7 44.1 
Other Income— — 0.1 — — — — — 0.1 — 
Total Revenues182.6 184.8 168.0 190.6 196.7 203.0 200.8 193.9 726.0 794.4 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE107.1 102.8 82.5 108.5 120.2 121.7 119.1 120.8 400.9 481.8 
Catastrophe Losses and LAE(5.3)61.9 20.6 4.8 11.9 11.9 22.6 16.6 82.0 63.0 
Prior Years:
Non-catastrophe Losses and LAE9.5 6.3 8.2 (3.3)(7.1)(1.1)(4.3)(5.1)20.7 (17.6)
Catastrophe Losses and LAE0.1 0.1 0.4 (1.1)(3.1)(15.4)(0.9)1.0 (0.5)(18.4)
Total Incurred Losses and LAE111.4 171.1 111.7 108.9 121.9 117.1 136.5 133.3 503.1 508.8 
Insurance Expenses51.4 55.5 55.5 58.7 58.7 59.4 57.9 57.3 221.1 233.3 
Operating Profit (Loss)19.8 (41.8)0.8 23.0 16.1 26.5 6.4 3.3 1.8 52.3 
Income Tax Benefit (Expense)(2.9)9.1 0.1 (4.6)(3.3)(5.4)(1.2)(0.5)1.7 (10.4)
Segment Net Operating Income (Loss)$16.9 $(32.7)$0.9 $18.4 $12.8 $21.1 $5.2 $2.8 $3.5 $41.9 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio63.2 %58.9 %50.5 %59.9 %64.9 %63.8 %63.2 %65.1 %58.3 %64.2 %
Current Year Catastrophe Losses and LAE Ratio(3.1)35.5 12.6 2.7 6.4 6.2 12.0 8.9 11.9 8.4 
Prior Years Non-catastrophe Losses and LAE Ratio5.6 3.6 5.0 (1.8)(3.8)(0.6)(2.3)(2.7)3.0 (2.3)
Prior Years Catastrophe Losses and LAE Ratio0.1 0.1 0.2 (0.6)(1.7)(8.1)(0.5)0.5 (0.1)(2.5)
Total Incurred Loss and LAE Ratio65.8 98.1 68.3 60.2 65.8 61.3 72.4 71.8 73.1 67.8 
Insurance Expense Ratio30.4 31.8 33.9 32.4 31.7 31.1 30.7 30.9 32.1 31.1 
Combined Ratio96.2 %129.9 %102.2 %92.6 %97.5 %92.4 %103.1 %102.7 %105.2 %98.9 %
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio63.2 %58.9 %50.5 %59.9 %64.9 %63.8 %63.2 %65.1 %58.3 %64.2 %
Insurance Expense Ratio30.4 31.8 33.9 32.4 31.7 31.1 30.7 30.9 32.1 31.1 
Underlying Combined Ratio93.6 %90.7 %84.4 %92.3 %96.6 %94.9 %93.9 %96.0 %90.4 %95.3 %
Non-GAAP Measure Reconciliation
Combined Ratio as Reported96.2 %129.9 %102.2 %92.6 %97.5 %92.4 %103.1 %102.7 %105.2 %98.9 %
Less:
Current Year Catastrophe Losses and LAE Ratio(3.1)35.5 12.6 2.7 6.4 6.2 12.0 8.9 11.9 8.4 
Prior Years Non-catastrophe Losses and LAE Ratio5.6 3.6 5.0 (1.8)(3.8)(0.6)(2.3)(2.7)3.0 (2.3)
Prior Years Catastrophe Losses and LAE Ratio0.1 0.1 0.2 (0.6)(1.7)(8.1)(0.5)0.5 (0.1)(2.5)
Underlying Combined Ratio93.6 %90.7 %84.4 %92.3 %96.6 %94.9 %93.9 %96.0 %90.4 %95.3 %
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
18


Kemper Corporation
Preferred Property & Casualty Insurance Segment
Results of Operations and Selected Financial Information (continued)
(Dollars in Millions)
(Unaudited)
Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019
Insurance Reserves:
Preferred Automobile$281.3 $265.2 $252.8 $254.8 $262.3 $267.3 $264.5 $268.0 
Homeowners104.0 137.9 99.5 90.8 95.3 108.8 131.6 133.5 
Other Personal26.3 25.5 25.7 28.8 30.9 32.2 34.0 34.3 
Insurance Reserves$411.6 $428.6 $378.0 $374.4 $388.5 $408.3 $430.1 $435.8 
Insurance Reserves:
Loss and Allocated LAE Reserves:
Case and Allocated LAE$262.2 $266.8 $230.7 $231.1 $241.3 $277.8 $278.5 $290.2 
Incurred but Not Reported122.0 134.2 119.6 115.1 118.8 100.4 120.2 113.0 
Total Loss Reserves384.2 401.0 350.3 346.2 360.1 378.2 398.7 403.2 
Unallocated LAE Reserves27.4 27.6 27.7 28.2 28.4 30.1 31.4 32.6 
Insurance Reserves$411.6 $428.6 $378.0 $374.4 $388.5 $408.3 $430.1 $435.8 

19

Kemper Corporation
Preferred Property & Casualty Insurance Segment
Preferred Personal Automobile Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations   
Net Premiums Written$98.8 $107.2 $95.6 $105.9 $111.5 $117.5 $123.4 $116.5 $407.5 $468.9 
Earned Premiums$107.1 $110.6 $99.1 $114.9 $117.2 $119.7 $117.9 $115.4 $431.7 $470.2 
Net Investment Income7.9 6.1 2.5 5.8 5.4 5.6 5.8 3.9 22.3 20.7 
Other Income— — 0.1 — — — — — 0.1 — 
Total Revenues115.0 116.7 101.7 120.7 122.6 125.3 123.7 119.3 454.1 490.9 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE78.0 72.2 53.8 75.9 86.2 83.2 82.9 80.2 279.9 332.5 
Catastrophe Losses and LAE0.4 1.8 2.0 0.2 1.5 2.1 1.7 2.5 4.4 7.8 
Prior Years:
Non-catastrophe Losses and LAE9.9 5.9 9.7 2.2 (2.8)(0.5)(3.7)(1.2)27.7 (8.2)
Catastrophe Losses and LAE(0.4)(0.2)(0.3)(0.1)0.2 (0.1)— (0.1)(1.0)— 
Total Incurred Losses and LAE87.9 79.7 65.2 78.2 85.1 84.7 80.9 81.4 311.0 332.1 
Insurance Expenses32.3 34.7 34.0 36.1 36.3 36.8 35.5 35.0 137.1 143.6 
Operating Profit(5.2)2.3 2.5 6.4 1.2 3.8 7.3 2.9 6.0 15.2 
Income Tax Expense1.9 (0.3)(0.4)(1.2)(0.2)(0.7)(1.5)(0.5)— (2.9)
Total Product Line Net Operating Income (Loss)$(3.3)$2.0 $2.1 $5.2 $1.0 $3.1 $5.8 $2.4 $6.0 $12.3 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio72.9 %65.4 %54.3 %66.1 %73.5 %69.5 %70.3 %69.4 %64.8 %70.6 %
Current Year Catastrophe Losses and LAE Ratio0.4 1.6 2.0 0.2 1.3 1.8 1.4 2.2 1.0 1.7 
Prior Years Non-catastrophe Losses and LAE Ratio9.2 5.3 9.8 1.9 (2.4)(0.4)(3.1)(1.0)6.4 (1.7)
Prior Years Catastrophe Losses and LAE Ratio(0.4)(0.2)(0.3)(0.1)0.2 (0.1)— (0.1)(0.2)— 
Total Incurred Loss and LAE Ratio82.1 72.1 65.8 68.1 72.6 70.8 68.6 70.5 72.0 70.6 
Insurance Expense Ratio30.2 31.4 34.3 31.4 31.0 30.7 30.1 30.3 31.8 30.5 
Combined Ratio112.3 %103.5 %100.1 %99.5 %103.6 %101.5 %98.7 %100.8 %103.8 %101.1 %
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio72.9 %65.4 %54.3 %66.1 %73.5 %69.5 %70.3 %69.4 %64.8 %70.6 %
Insurance Expense Ratio30.2 31.4 34.3 31.4 31.0 30.7 30.1 30.3 31.8 30.5 
Underlying Combined Ratio103.1 %96.8 %88.6 %97.5 %104.5 %100.2 %100.4 %99.7 %96.6 %101.1 %
Non-GAAP Measure Reconciliation
Combined Ratio112.3 %103.5 %100.1 %99.5 %103.6 %101.5 %98.7 %100.8 %103.8 %101.1 %
Less:
Current Year Catastrophe Losses and LAE Ratio0.4 1.6 2.0 0.2 1.3 1.8 1.4 2.2 1.0 1.7 
Prior Years Non-catastrophe Losses and LAE Ratio9.2 5.3 9.8 1.9 (2.4)(0.4)(3.1)(1.0)6.4 (1.7)
Prior Years Catastrophe Losses and LAE Ratio(0.4)(0.2)(0.3)(0.1)0.2 (0.1)— (0.1)(0.2)— 
Underlying Combined Ratio103.1 %96.8 %88.6 %97.5 %104.5 %100.2 %100.4 %99.7 %96.6 %101.1 %
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
20

Kemper Corporation
Preferred Property & Casualty Insurance Segment
Homeowners and Other Personal Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations   
Net Premiums Written$56.4 $65.0 $65.9 $58.2 $61.1 $72.1 $74.1 $63.1 $245.5 $270.4 
Earned Premiums$62.1 $63.9 $64.5 $66.0 $68.0 $71.3 $70.6 $70.2 $256.5 $280.1 
Net Investment Income5.5 4.2 1.8 3.9 6.1 6.4 6.5 4.4 15.4 23.4 
Total Revenues67.6 68.1 66.3 69.9 74.1 77.7 77.1 74.6 271.9 303.5 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE29.1 30.6 28.7 32.6 34.0 38.5 36.2 40.6 121.0 149.3 
Catastrophe Losses and LAE(5.7)60.1 18.6 4.6 10.4 9.8 20.9 14.1 77.6 55.2 
Prior Years:
Non-catastrophe Losses and LAE(0.4)0.4 (1.5)(5.5)(4.3)(0.6)(0.6)(3.9)(7.0)(9.4)
Catastrophe Losses and LAE0.5 0.3 0.7 (1.0)(3.3)(15.3)(0.9)1.1 0.5 (18.4)
Total Incurred Losses and LAE23.5 91.4 46.5 30.7 36.8 32.4 55.6 51.9 192.1 176.7 
Insurance Expenses19.1 20.8 21.5 22.6 22.4 22.6 22.4 22.3 84.0 89.7 
Operating Profit (Loss)25.0 (44.1)(1.7)16.6 14.9 22.7 (0.9)0.4 (4.2)37.1 
Income Tax Benefit (Expense)(4.8)9.4 0.5 (3.4)(3.1)(4.7)0.3 — 1.7 (7.5)
Total Product Line Net Operating Income (Loss)$20.2 $(34.7)$(1.2)$13.2 $11.8 $18.0 $(0.6)$0.4 $(2.5)$29.6 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio46.8 %47.8 %44.5 %49.3 %50.0 %54.0 %51.3 %57.8 %47.1 %53.4 %
Current Year Catastrophe Losses and LAE Ratio(9.2)94.1 28.8 7.0 15.3 13.7 29.6 20.1 30.3 19.7 
Prior Years Non-catastrophe Losses and LAE Ratio(0.6)0.6 (2.3)(8.3)(6.3)(0.8)(0.8)(5.6)(2.7)(3.4)
Prior Years Catastrophe Losses and LAE Ratio0.8 0.5 1.1 (1.5)(4.9)(21.5)(1.3)1.6 0.2 (6.6)
Total Incurred Loss and LAE Ratio37.8 143.0 72.1 46.5 54.1 45.4 78.8 73.9 74.9 63.1 
Insurance Expense Ratio30.8 32.6 33.3 34.2 32.9 31.7 31.7 31.8 32.7 32.0 
Combined Ratio68.6 %175.6 %105.4 %80.7 %87.0 %77.1 %110.5 %105.7 %107.6 %95.1 %
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio46.8 %47.8 %44.5 %49.3 %50.0 %54.0 %51.3 %57.8 %47.1 %53.4 %
Insurance Expense Ratio30.8 32.6 33.3 34.2 32.9 31.7 31.7 31.8 32.7 32.0 
Underlying Combined Ratio77.6 %80.4 %77.8 %83.5 %82.9 %85.7 %83.0 %89.6 %79.8 %85.4 %
Non-GAAP Measure Reconciliation
Combined Ratio68.6 %175.6 %105.4 %80.7 %87.0 %77.1 %110.5 %105.7 %107.6 %95.1 %
Less:
Current Year Catastrophe Losses and LAE Ratio(9.2)94.1 28.8 7.0 15.3 13.7 29.6 20.1 30.3 19.7 
Prior Years Non-catastrophe Losses and LAE Ratio(0.6)0.6 (2.3)(8.3)(6.3)(0.8)(0.8)(5.6)(2.7)(3.4)
Prior Years Catastrophe Losses and LAE Ratio0.8 0.5 1.1 (1.5)(4.9)(21.5)(1.3)1.6 0.2 (6.6)
Underlying Combined Ratio77.6 %80.4 %77.8 %83.5 %82.9 %85.7 %83.0 %89.6 %79.8 %85.4 %
1Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
21


Kemper Corporation
Preferred Property & Casualty Insurance Segment
Homeowners Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations   
Net Premiums Written$48.3 $55.7 $57.2 $49.9 $52.5 $62.3 $64.2 $54.1 $211.1 $233.1 
Earned Premiums$53.3 $55.0 $55.6 $56.8 $58.7 $61.5 $60.8 $60.3 $220.7 $241.3 
Net Investment Income5.0 3.8 1.6 3.6 5.2 5.5 5.6 3.8 14.0 20.1 
Total Revenues58.3 58.8 57.2 60.4 63.9 67.0 66.4 64.1 234.7 261.4 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE26.5 28.1 25.4 28.7 30.0 34.2 31.6 35.8 108.7 131.6 
Catastrophe Losses and LAE(10.1)58.6 18.2 4.5 10.3 9.3 20.6 13.8 71.2 54.0 
Prior Years:
Non-catastrophe Losses and LAE0.3 2.0 (0.8)(4.3)(2.7)0.2 0.9 (1.1)(2.8)(2.7)
Catastrophe Losses and LAE0.6 0.2 0.6 (0.7)(3.4)(13.6)(1.0)1.0 0.7 (17.0)
Total Incurred Losses and LAE17.3 88.9 43.4 28.2 34.2 30.1 52.1 49.5 177.8 165.9 
Insurance Expenses16.6 18.2 18.6 19.5 19.6 19.8 19.7 19.6 72.9 78.7 
Operating Profit (Loss)24.4 (48.3)(4.8)12.7 10.1 17.1 (5.4)(5.0)(16.0)16.8 
Income Tax Benefit (Expense)(4.7)10.3 1.1 (2.6)(2.1)(3.5)1.2 1.1 4.1 (3.3)
Total Product Line Net Operating Income (Loss)$19.7 $(38.0)$(3.7)$10.1 $8.0 $13.6 $(4.2)$(3.9)$(11.9)$13.5 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio49.7 %51.1 %45.7 %50.5 %51.2 %55.6 %51.9 %59.3 %49.3 %54.5 %
Current Year Catastrophe Losses and LAE Ratio(18.9)106.5 32.7 7.9 17.5 15.1 33.9 22.9 32.3 22.4 
Prior Years Non-catastrophe Losses and LAE Ratio0.6 3.6 (1.4)(7.6)(4.6)0.3 1.5 (1.8)(1.3)(1.1)
Prior Years Catastrophe Losses and LAE Ratio1.1 0.4 1.1 (1.2)(5.8)(22.1)(1.6)1.7 0.3 (7.0)
Total Incurred Loss and LAE Ratio32.5 161.6 78.1 49.6 58.3 48.9 85.7 82.1 80.6 68.8 
Insurance Expense Ratio31.1 33.1 33.5 34.3 33.4 32.2 32.4 32.5 33.0 32.6 
Combined Ratio63.6 %194.7 %111.6 %83.9 %91.7 %81.1 %118.1 %114.6 %113.6 %101.4 %
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio49.7 %51.1 %45.7 %50.5 %51.2 %55.6 %51.9 %59.3 %49.3 %54.5 %
Insurance Expense Ratio31.1 33.1 33.5 34.3 33.4 32.2 32.4 32.5 33.0 32.6 
Underlying Combined Ratio80.8 %84.2 %79.2 %84.8 %84.6 %87.8 %84.3 %91.8 %82.3 %87.1 %
Non-GAAP Measure Reconciliation
Combined Ratio63.6 %194.7 %111.6 %83.9 %91.7 %81.1 %118.1 %114.6 %113.6 %101.4 %
Less:
Current Year Catastrophe Losses and LAE Ratio(18.9)106.5 32.7 7.9 17.5 15.1 33.9 22.9 32.3 22.4 
Prior Years Non-catastrophe Losses and LAE Ratio0.6 3.6 (1.4)(7.6)(4.6)0.3 1.5 (1.8)(1.3)(1.1)
Prior Years Catastrophe Losses and LAE Ratio1.1 0.4 1.1 (1.2)(5.8)(22.1)(1.6)1.7 0.3 (7.0)
Underlying Combined Ratio80.8 %84.2 %79.2 %84.8 %84.6 %87.8 %84.3 %91.8 %82.3 %87.1 %
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
22

Kemper Corporation
Preferred Property & Casualty Insurance Segment
Other Personal Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations   
Net Premiums Written$8.1 $9.3 $8.7 $8.3 $8.6 $9.8 $9.9 $9.0 $34.4 $37.3 
Earned Premiums$8.8 $8.9 $8.9 $9.2 $9.3 $9.8 $9.8 $9.9 $35.8 $38.8 
Net Investment Income0.5 0.4 0.2 0.3 0.9 0.9 0.9 0.6 1.4 3.3 
Total Revenues9.3 9.3 9.1 9.5 10.2 10.7 10.7 10.5 37.2 42.1 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE2.6 2.5 3.3 3.9 4.0 4.3 4.6 4.8 12.3 17.7 
Catastrophe Losses and LAE4.4 1.5 0.4 0.1 0.1 0.5 0.3 0.3 6.4 1.2 
Prior Years:
Non-catastrophe Losses and LAE(0.7)(1.6)(0.7)(1.2)(1.6)(0.8)(1.5)(2.8)(4.2)(6.7)
Catastrophe Losses and LAE(0.1)0.1 0.1 (0.3)0.1 (1.7)0.1 0.1 (0.2)(1.4)
Total Incurred Losses and LAE6.2 2.5 3.1 2.5 2.6 2.3 3.5 2.4 14.3 10.8 
Insurance Expenses2.5 2.6 2.9 3.1 2.8 2.8 2.7 2.7 11.1 11.0 
Operating Profit 0.6 4.2 3.1 3.9 4.8 5.6 4.5 5.4 11.8 20.3 
Income Tax Expense(0.1)(0.9)(0.6)(0.8)(1.0)(1.2)(0.9)(1.1)(2.4)(4.2)
Total Product Line Net Operating Income$0.5 $3.3 $2.5 $3.1 $3.8 $4.4 $3.6 $4.3 $9.4 $16.1 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio29.6 %28.1 %37.1 %42.4 %43.0 %43.9 %46.9 %48.5 %34.3 %45.6 %
Current Year Catastrophe Losses and LAE Ratio50.0 16.9 4.5 1.1 1.1 5.1 3.1 3.0 17.9 3.1 
Prior Years Non-catastrophe Losses and LAE Ratio(8.0)(18.0)(7.9)(13.0)(17.2)(8.2)(15.3)(28.3)(11.7)(17.3)
Prior Years Catastrophe Losses and LAE Ratio(1.1)1.1 1.1 (3.3)1.1 (17.3)1.0 1.0 (0.6)(3.6)
Total Incurred Loss and LAE Ratio70.5 28.1 34.8 27.2 28.0 23.5 35.7 24.2 39.9 27.8 
Insurance Expense Ratio28.4 29.2 32.6 33.7 30.1 28.6 27.6 27.3 31.0 28.4 
Combined Ratio98.9 %57.3 %67.4 %60.9 %58.1 %52.1 %63.3 %51.5 %70.9 %56.2 %
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio29.6 %28.1 %37.1 %42.4 %43.0 %43.9 %46.9 %48.5 %34.3 %45.6 %
Insurance Expense Ratio28.4 29.2 32.6 33.7 30.1 28.6 27.6 27.3 31.0 28.4 
Underlying Combined Ratio58.0 %57.3 %69.7 %76.1 %73.1 %72.5 %74.5 %75.8 %65.3 %74.0 %
Non-GAAP Measure Reconciliation
Combined Ratio98.9 %57.3 %67.4 %60.9 %58.1 %52.1 %63.3 %51.5 %70.9 %56.2 %
Less:
Current Year Catastrophe Losses and LAE Ratio50.0 16.9 4.5 1.1 1.1 5.1 3.1 3.0 17.9 3.1 
Prior Years Non-catastrophe Losses and LAE Ratio(8.0)(18.0)(7.9)(13.0)(17.2)(8.2)(15.3)(28.3)(11.7)(17.3)
Prior Years Catastrophe Losses and LAE Ratio(1.1)1.1 1.1 (3.3)1.1 (17.3)1.0 1.0 (0.6)(3.6)
Underlying Combined Ratio58.0 %57.3 %69.7 %76.1 %73.1 %72.5 %74.5 %75.8 %65.3 %74.0 %
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
23


Kemper Corporation
Life & Health Insurance Segment
Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations  
Earned Premiums$162.4 $160.6 $162.7 $163.0 $160.9 $160.8 $162.1 $159.9 $648.7 $643.7 
Net Investment Income52.8 50.7 44.3 51.0 52.0 49.7 53.0 51.7 198.8 206.4 
Other Income— — 0.5 0.1 2.9 2.9 1.6 1.1 0.6 8.5 
Total Revenues215.2 211.3 207.5 214.1 215.8 213.4 216.7 212.7 848.1 858.6 
Policyholders’ Benefits and Incurred Losses and LAE121.8 113.6 105.9 100.7 95.0 88.8 113.5 105.4 442.0 402.7 
Insurance Expenses83.8 82.5 81.7 86.9 85.3 83.6 87.1 78.0 334.9 334.0 
Operating Profit9.6 15.2 19.9 26.5 35.5 41.0 16.1 29.3 71.2 121.9 
Income Tax Expense(0.2)(3.0)(3.8)(4.2)(6.6)(7.6)(2.8)(6.2)(11.2)(23.2)
Segment Net Operating Income$9.4 $12.2 $16.1 $22.3 $28.9 $33.4 $13.3 $23.1 $60.0 $98.7 
 

Dec 31, 2020Sep 30, 2020Jun 30, 2020Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019
Insurance Reserves:
Future Policyholder Benefits$3,440.5 $3,426.4 $3,407.0 $3,397.1 $3,385.3 $3,374.6 $3,362.6 $3,346.1 
Incurred Losses and LAE Reserves:
Life61.1 59.0 61.6 75.5 89.2 97.0 121.4 127.0 
Accident and Health25.9 26.1 29.1 28.2 27.5 28.1 30.2 28.6 
Property4.6 5.1 3.8 3.1 3.3 3.5 4.2 3.6 
Total Incurred Losses and LAE Reserves91.6 90.2 94.5 106.8 120.0 128.6 155.8 159.2 
Insurance Reserves$3,532.1 $3,516.6 $3,501.5 $3,503.9 $3,505.3 $3,503.2 $3,518.4 $3,505.3 

 

24


Kemper Corporation
Life & Health Insurance Segment
Life Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30, 2020Jun 30, 2020Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations  
Earned Premiums$96.5 $96.3 $95.7 $97.2 $95.6 $96.2 $97.0 $95.8 $385.7 $384.6 
Net Investment Income52.3 47.5 44.8 48.7 50.1 47.8 51.0 49.9 193.3 198.8 
Other Income(0.1)— 0.1 — 2.7 2.8 1.6 1.0 — 8.1 
Total Revenues148.7 143.8 140.6 145.9 148.4 146.8 149.6 146.7 579.0 591.5 
Policyholders’ Benefits and Incurred Losses and LAE89.4 84.0 76.7 68.1 65.4 56.0 75.9 72.8 318.2 270.1 
Insurance Expenses52.9 54.7 50.9 60.3 55.4 53.3 56.7 49.9 218.8 215.3 
Operating Profit 6.4 5.1 13.0 17.5 27.6 37.5 17.0 24.0 42.0 106.1 
Income Tax Expense0.3 (0.8)(2.4)(2.3)(4.9)(7.0)(3.0)(5.1)(5.2)(20.0)
Total Product Line Operating Income$6.7 $4.3 $10.6 $15.2 $22.7 $30.5 $14.0 $18.9 $36.8 $86.1 


Kemper Corporation
Life & Health Insurance Segment
Accident & Health Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30, 2020Jun 30, 2020Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations  
Earned Premiums$50.2 $48.9 $50.8 $49.4 $48.5 $47.6 $47.9 $46.9 $199.3 $190.9 
Net Investment Income0.3 3.1 (0.4)2.0 1.5 1.5 1.5 1.5 5.0 6.0 
Other Income0.1 — 0.4 0.1 0.2 0.1 — 0.1 0.6 0.4 
Total Revenues50.6 52.0 50.8 51.5 50.2 49.2 49.4 48.5 204.9 197.3 
Policyholders’ Benefits and Incurred Losses and LAE24.5 20.7 22.0 28.1 25.3 27.6 30.6 26.3 95.3 109.8 
Insurance Expenses25.1 22.1 24.6 20.1 22.8 22.7 22.4 20.8 91.9 88.7 
Operating Profit (Loss)1.0 9.2 4.2 3.3 2.1 (1.1)(3.6)1.4 17.7 (1.2)
Income Tax Benefit (Expense)— (2.0)(0.9)(0.7)(0.5)0.3 0.8 (0.3)(3.6)0.3 
Total Product Line Net Operating Income (Loss)$1.0 $7.2 $3.3 $2.6 $1.6 $(0.8)$(2.8)$1.1 $14.1 $(0.9)
25


Kemper Corporation
Life & Health Insurance Segment
Property Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30, 2020Jun 30, 2020Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Results of Operations   
Earned Premiums$15.7 $15.4 $16.2 $16.4 $16.8 $17.0 $17.2 $17.2 $63.7 $68.2 
Net Investment Income0.2 0.1 (0.1)0.3 0.4 0.4 0.5 0.3 0.5 1.6 
Total Revenues15.9 15.5 16.1 16.7 17.2 17.4 17.7 17.5 64.2 69.8 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE2.5 5.2 3.5 4.0 3.8 4.5 4.7 5.1 15.2 18.1 
Catastrophe Losses and LAE5.3 3.1 3.2 0.8 0.5 0.5 1.8 0.3 12.4 3.1 
Prior Years:
Non-catastrophe Losses and LAE0.1 0.4 0.3 (0.4)(0.1)0.1 0.2 0.6 0.4 0.8 
Catastrophe Losses and LAE— 0.2 0.2 0.1 0.1 0.1 0.3 0.3 0.5 0.8 
Total Incurred Losses and LAE7.9 8.9 7.2 4.5 4.3 5.2 7.0 6.3 28.5 22.8 
Insurance Expenses5.8 5.7 6.2 6.5 7.1 7.6 8.0 7.3 24.2 30.0 
Operating Profit 2.2 0.9 2.7 5.7 5.8 4.6 2.7 3.9 11.5 17.0 
Income Tax Expense(0.5)(0.2)(0.5)(1.2)(1.2)(0.9)(0.6)(0.8)(2.4)(3.5)
Total Product Line Net Operating Income $1.7 $0.7 $2.2 $4.5 $4.6 $3.7 $2.1 $3.1 $9.1 $13.5 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio15.9 %33.8 %21.5 %24.3 %22.6 %26.5 %27.3 %29.7 %23.8 %26.5 %
Current Year Catastrophe Losses and LAE Ratio33.8 20.1 19.8 4.9 3.0 2.9 10.5 1.7 19.5 4.5 
Prior Years Non-catastrophe Losses and LAE Ratio0.6 2.6 1.9 (2.4)(0.6)0.6 1.2 3.5 0.6 1.2 
Prior Years Catastrophe Losses and LAE Ratio— 1.3 1.2 0.6 0.6 0.6 1.7 1.7 0.8 1.2 
Total Incurred Loss and LAE Ratio50.3 57.8 44.4 27.4 25.6 30.6 40.7 36.6 44.7 33.4 
Insurance Expense Ratio36.9 37.0 38.3 39.6 42.3 44.7 46.5 42.4 38.0 44.0 
Combined Ratio87.2 %94.8 %82.7 %67.0 %67.9 %75.3 %87.2 %79.0 %82.7 %77.4 %
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio15.9 %33.8 %21.5 %24.3 %22.6 %26.5 %27.3 %29.7 %23.8 %26.5 %
Insurance Expense Ratio36.9 37.0 38.3 39.6 42.3 44.7 46.5 42.4 38.0 44.0 
Underlying Combined Ratio52.8 %70.8 %59.8 %63.9 %64.9 %71.2 %73.8 %72.1 %61.8 %70.5 %
Non-GAAP Measure Reconciliation
Combined Ratio87.2 %94.8 %82.7 %67.0 %67.9 %75.3 %87.2 %79.0 %82.7 %77.4 %
Less:
Current Year Catastrophe Losses and LAE Ratio33.8 20.1 19.8 4.9 3.0 2.9 10.5 1.7 19.5 4.5 
Prior Years Non-catastrophe Losses and LAE Ratio0.6 2.6 1.9 (2.4)(0.6)0.6 1.2 3.5 0.6 1.2 
Prior Years Catastrophe Losses and LAE Ratio— 1.3 1.2 0.6 0.6 0.6 1.7 1.7 0.8 1.2 
Underlying Combined Ratio52.8 %70.8 %59.8 %63.9 %64.9 %71.2 %73.8 %72.1 %61.8 %70.5 %
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
26


Kemper Corporation
Expenses
(Dollars in Millions)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30, 2020Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Insurance Expenses: 
Commissions$183.3 $195.5 $178.2 $188.8 $172.7 $178.3 $183.8 $174.0 $745.8 $708.8 
General Expenses83.1 74.6 79.2 70.5 70.4 69.8 74.9 62.9 307.4 278.0 
Premium Taxes23.0 23.3 23.1 24.8 22.0 21.8 25.0 24.7 94.2 93.5 
Total Costs Incurred289.4 293.4 280.5 284.1 265.1 269.9 283.7 261.6 1,147.4 1,080.3 
Net Policy Acquisition Costs Deferred(11.1)(17.4)(9.3)(13.8)(1.0)(15.2)(21.7)(29.0)(51.6)(66.9)
Amortization of Valuation of Business Acquired ("VOBA")1.0 0.9 1.5 1.3 1.3 1.3 1.5 2.2 4.7 6.3 
Insurance Expenses279.3 276.9 272.7 271.6 265.4 256.0 263.5 234.8 1,100.5 1,019.7 
Loss from Early Extinguishment of Debt— — — — — 5.8 — — — 5.8 
Interest and Other Expenses:
Interest Expense11.3 8.3 8.9 7.5 10.0 9.2 11.8 11.5 36.0 42.5 
Other Expenses:
Acquisition Related Transaction, Integration and Other Costs20.0 14.4 17.1 11.8 6.2 5.4 1.2 5.6 63.3 18.4 
Pension Settlement Expense64.1 — — — — — — — 64.1 — 
Other33.4 24.5 25.0 25.2 30.3 23.3 25.0 24.3 108.1 102.9 
Other Expenses117.5 38.9 42.1 37.0 36.5 28.7 26.2 29.9 235.5 121.3 
Interest and Other Expenses128.8 47.2 51.0 44.5 46.5 37.9 38.0 41.4 271.5 163.8 
Total Expenses$408.1 $324.1 $323.7 $316.1 $311.9 $299.7 $301.5 $276.2 $1,372.0 $1,189.3 

27


Kemper Corporation
Details of Investment Performance
(Dollars in Millions)
 Three Months EndedYear Ended
 Dec 31,
2020		Sep 30,
2020		Jun 30, 2020Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Net Investment Income  
Interest on Fixed Income Securities$71.8 $72.7 $74.3 $71.0 $73.9 $73.5 $75.6 $76.4 $289.8 $299.4 
Dividends on Equity Securities Excluding Alternative Investments4.7 2.8 3.6 4.3 8.3 5.2 6.9 2.5 15.4 22.9 
Alternative Investments:
Equity Method Limited Liability Investments7.6 8.2 (12.7)1.8 0.4 1.6 2.6 (3.6)4.9 1.0 
Limited Liability Investments Included in Equity Securities14.8 2.4 1.1 3.8 5.1 5.2 5.1 2.6 22.1 18.0 
Total Alternative Investments22.4 10.6 (11.6)5.6 5.5 6.8 7.7 (1.0)27.0 19.0 
Short-term Investments1.3 2.3 0.3 1.6 1.3 2.5 2.6 1.8 5.5 8.2 
Loans to Policyholders5.5 5.5 5.5 5.6 5.7 5.9 5.7 5.3 22.1 22.6 
Real Estate2.5 2.3 2.3 2.5 2.7 2.4 2.2 2.5 9.6 9.8 
Other3.9 2.7 2.4 4.2 0.6 0.6 0.3 — 13.2 1.5 
Total Investment Income112.1 98.9 76.8 94.8 98.0 96.9 101.0 87.5 382.6 383.4 
Investment Expenses:
Real Estate2.3 1.2 2.7 2.6 2.4 2.5 2.3 2.4 8.8 9.6 
Other Investment Expenses7.1 5.6 6.3 6.6 1.7 2.7 2.7 2.4 25.6 9.5 
Total Investment Expenses9.4 6.8 9.0 9.2 4.1 5.2 5.0 4.8 34.4 19.1 
Net Investment Income$102.7 $92.1 $67.8 $85.6 $93.9 $91.7 $96.0 $82.7 $348.2 $364.3 
Net Realized Gains (Losses) on Sales of Investments
Fixed Maturities:
Gains on Sales$1.9 $11.9 $10.9 $15.9 $1.4 $1.9 $22.7 $15.1 $40.6 $41.1 
Losses on Sales(4.4)(1.9)(0.5)(1.1)— (0.3)(1.9)(2.6)(7.9)(4.8)
Equity Securities:
Gains on Sales4.4 0.1 0.1 1.3 1.3 0.2 0.7 3.6 5.9 5.8 
Losses on Sales(1.7)— — (0.2)0.1 (0.1)(0.2)— (1.9)(0.2)
Equity Method Limited Liability Investments:
Losses on Sales(0.3)(0.1)— — — — — — (0.4)— 
Real Estate:
Gains on Sales— — 1.2 0.6 — — — — 1.8 — 
Net Realized Gains on Sales of Investments$(0.1)$10.0 $11.7 $16.5 $2.8 $1.7 $21.3 $16.1 $38.1 $41.9 
Net Impairment Losses Recognized in Earnings
Fixed Maturities$1.3 $(1.0)$(7.0)$(10.0)$(1.7)$(1.7)$(6.3)$(3.6)$(16.7)$(13.3)
Equity Securities(0.8)— — (2.0)— (0.1)(0.4)— (2.8)(0.5)
Net Impairment Losses Recognized in Earnings$0.5 $(1.0)$(7.0)$(12.0)$(1.7)$(1.8)$(6.7)$(3.6)$(19.5)$(13.8)
 
28


Kemper Corporation
Details of Invested Assets
(Dollars in Millions)
(Unaudited)
 Dec 31, 2020Dec 31, 2019Dec 31, 2018
 Carrying
Value
Percent
of Total1
Carrying
Value
Percent
of Total1
Carrying
Value
Percent
of Total1
Fixed Maturities Reported at Fair Value:
U.S. Government and Government Agencies and Authorities
$585.3 5.6 %$815.9 8.8 %$865.7 10.6 %
States and Political Subdivisions
1,589.5 15.2 1,515.8 16.4 1,619.1 19.9 
Foreign Governments
5.2 — 16.8 0.2 5.9 0.1 
Corporate Securities:
Bonds and Notes
4,425.4 42.5 3,859.7 41.7 3,393.8 41.8 
Redeemable Preferred Stocks
7.5 0.1 6.7 0.1 — — 
Collateralized Loan Obligations767.7 7.4 618.2 6.7 524.0 6.4 
Other Mortgage- and Asset-backed
225.3 2.2 89.0 1.0 15.7 0.2 
Total Fixed Maturities Reported at Fair Value
7,605.9 73.0 6,922.1 74.7 6,424.2 79.0 
Equity Securities Reported at Fair Value:
Preferred Stocks
59.1 0.6 59.2 0.6 54.2 0.7 
Common Stocks
10.8 0.1 13.2 0.1 10.9 0.1 
Other Equity Interests:
Exchange Traded Funds
496.6 4.8 586.8 6.3 427.3 5.3 
Limited Liability Companies and Limited Partnerships
292.0 2.8 248.1 2.7 192.0 2.4 
Total Equity Securities Reported at Fair Value
858.5 8.2 907.3 9.8 684.4 8.5 
Equity Securities Reported at Modified Cost:
Preferred Stocks
8.1 0.1 9.1 0.1 9.2 0.1 
Common Stocks
16.3 0.2 12.3 0.1 8.8 0.1 
Limited Liability Companies and Limited Partnerships
15.7 0.2 20.5 0.2 23.5 0.3 
Total Equity Securities Reported at Modified Cost
40.1 0.5 41.9 0.4 41.5 0.5 
Convertible Securities at Fair Value
39.9 0.4 37.3 0.4 31.5 0.4 
Equity Method Limited Liability Investments
225.3 2.2 220.4 2.4 187.0 2.3 
Short-term Investments at Cost which Approximates Fair Value
875.4 8.4 470.9 5.1 286.1 3.5 
Other Investments:
Company Owned Life Insurance
327.4 3.1 217.0 2.3 59.3 0.7 
Loans to Policyholders at Unpaid Principal 297.9 2.9 305.6 3.3 300.6 3.7 
Real Estate at Depreciated Cost
98.7 0.9 111.4 1.2 114.2 1.4 
Mortgage Loans
54.6 0.5 27.5 0.3 — — 
Other
0.4 — — — — — 
Total Other Investments
779.0 7.4 661.5 7.1 474.1 5.8 
Total Investments
$10,424.1 100.0 %$9,261.4 100.0 %$8,128.8 100.0 %
1 Sum of percentages for individual lines may not equal subtotals and grand total due to rounding.
29

Kemper Corporation
Details of Invested Assets (continued)
(Dollars in Millions)
(Unaudited)
 Dec 31, 2020Dec 31, 2019Dec 31, 2018
 Carrying
Value
Percent
of Total1
Carrying
Value
Percent
of Total1
Carrying
Value
Percent
of Total1
S&P Equivalent Rating for Fixed Maturities
      
AAA, AA, A
$4,759.9 62.6 %$4,387.1 63.4 %$4,156.6 64.7 %
BBB
2,355.6 31.0 2,044.1 29.5 1,752.6 27.3 
BB, B
353.1 4.6 319.2 4.6 333.7 5.2 
CCC or Lower
137.3 1.8 171.7 2.5 181.3 2.8 
Total Investments in Fixed Maturities
$7,605.9 100.0 %$6,922.1 100.0 %$6,424.2 100.0 %
Duration (in Years)
Total Investments in Fixed Maturities
7.8 7.1 6.2 
1 Sum of percentages for individual lines may not equal subtotals and grand total due to rounding.

30


Kemper Corporation
Investment Concentration
(Dollars in Millions)
(Unaudited)
 Dec 31, 2020Dec 31, 2019Dec 31, 2018
Fair Value of Non-governmental Fixed Maturities by Industry
AmountPercent
of Total
Investments		AmountPercent
of Total
Investments		AmountPercent
of Total
Investments
Finance, Insurance and Real Estate
$1,916.3 18.4 %$1,522.8 16.4 %$1,269.3 15.6 %
Manufacturing
1,633.5 15.7 1,356.4 14.6 1,270.0 15.6 
Transportation, Communication and Utilities
825.5 7.9 650.2 7.0 449.0 5.5 
Services
581.3 5.6 604.4 6.5 516.4 6.4 
Mining
285.7 2.7 154.5 1.7 158.6 2.0 
Retail Trade
172.6 1.7 183.3 2.0 164.8 2.0 
Wholesale Trade
0.5 — 72.9 0.8 78.4 1.0 
Agriculture, Forestry and Fishing
— — 12.4 0.1 13.7 0.2 
Other
10.5 0.1 16.6 0.2 13.3 0.2 
Total Fair Value of Non-governmental Fixed Maturities
$5,425.9 52.1 %$4,573.5 49.3 %$3,933.5 48.5 %
 
Dec 31, 2020
Ten Largest Investment Exposures 1
Fair
Value		Percent
of Total
Investments
Fixed Maturities:
States including their Political Subdivisions:
Texas$140.6 1.3 %
Georgia107.9 1.0 
Colorado85.6 0.8 
New York76.1 0.7 
Michigan73.1 0.7 
Louisiana71.7 0.7 
California70.4 0.7 
Pennsylvania58.1 0.6 
Equity Securities at Fair Value—Other Equity Interests:
iShares® Core MSCI Total International Stock ETF76.3 0.7 
Vanguard Total World Stock ETF195.5 1.9 
Total$955.3 9.1 %
1Excluding Investments in U.S. Government and Government Agencies and Authorities at December 31, 2020.

 

31


Kemper Corporation
Municipal Bond Securities
(Dollars in Millions)
(Unaudited)
 Dec 31, 2020
State
General
Obligation		Political
Subdivision
General
Obligation		RevenueTotal Fair
Value
Percent
of Total
Muni Bond1
Percent
of Total
Investments1
Texas$10.4 $10.9 $119.3 $140.6 8.8 %1.3 %
Georgia46.6 6.1 55.2 107.9 6.8 1.0 
Colorado— 1.0 84.6 85.6 5.4 0.8 
New York6.7 9.3 60.1 76.1 4.8 0.7 
Louisiana40.5 5.4 25.9 71.8 4.5 0.7 
Michigan40.2 — 32.8 73.0 4.6 0.7 
California7.2 1.1 62.1 70.4 4.4 0.7 
Pennsylvania6.3 2.6 49.2 58.1 3.7 0.6 
Massachusetts4.2 1.5 43.3 49.0 3.1 0.5 
Virginia7.1 17.7 21.6 46.4 2.9 0.4 
Florida5.1 — 43.7 48.8 3.1 0.5 
Minnesota— — 40.3 40.3 2.5 0.4 
Washington15.7 — 30.2 45.9 2.9 0.4 
Oregon34.6 — 10.7 45.3 2.9 0.4 
Ohio6.7 — 34.6 41.3 2.6 0.4 
Utah0.6 — 39.3 39.9 2.5 0.4 
District of Columbia4.7 — 28.9 33.6 2.1 0.3 
South Carolina17.1 1.8 15.9 34.8 2.2 0.3 
New Mexico— — 34.0 34.0 2.1 0.3 
Illinois— — 31.0 31.0 2.0 0.3 
Indiana— — 29.3 29.3 1.8 0.3 
Maryland2.1 8.8 18.5 29.4 1.8 0.3 
Hawaii20.7 0.3 2.7 23.7 1.5 0.2 
Alabama— — 16.0 16.0 1.0 0.2 
Missouri— — 26.4 26.4 1.7 0.3 
Tennessee3.6 8.7 11.4 23.7 1.5 0.2 
Arkansas19.2 — — 19.2 1.2 0.2 
Kentucky— — 18.8 18.8 1.2 0.2 
Mississippi13.7 — 2.6 16.3 1.0 0.2 
Arizona— 0.8 15.1 15.9 1.0 0.2 
Alaska2.0 3.0 10.3 15.3 1.0 0.1 
New Hampshire4.5 0.5 10.4 15.4 1.0 0.1 
Nebraska— 8.6 6.6 15.2 1.0 0.1 
Oklahoma— — 14.2 14.2 0.9 0.1 
Wisconsin— 7.4 7.8 15.2 1.0 0.1 
North Dakota— — 13.1 13.1 0.8 0.1 
New Jersey— — 12.1 12.1 0.8 0.1 
Delaware— — 11.4 11.4 0.7 0.1 
Connecticut13.7 — — 13.7 0.9 0.1 
All Other States0.1 7.3 63.9 71.3 4.5 0.7 
Total$333.3 $102.8 $1,153.3 $1,589.4 100.0 %15.2 %
1 Sum of percentages for individual lines may not equal total due to rounding.
32


Kemper Corporation
Investments in Limited Liability
Companies and Limited Partnerships
(Dollars in Millions)
(Unaudited)
 Unfunded
Commitment		Reported Value
Asset ClassDec 31,
2020		Dec 31,
2020		Dec 31,
2019
Reported as Equity Method Limited Liability Investments:
Mezzanine Debt$57.4 $102.5 $129.3 
Senior Debt22.3 28.6 16.0 
Alternative Energy Partnerships80.0 21.3 — 
Distressed Debt— 14.5 22.7 
Secondary Transactions13.0 11.2 11.5 
Leveraged Buyout0.1 3.5 0.1 
Growth Equity— 0.7 5.3 
Real Estate— 29.9 29.9 
Other— 13.1 5.6 
Total Equity Method Limited Liability Investments172.8 225.3 220.4 
Reported as Other Equity Interests at Fair Value:
Mezzanine Debt72.9 118.3 126.1 
Senior Debt18.9 33.9 39.5 
Distressed Debt24.1 31.8 16.8 
Secondary Transactions6.2 4.2 4.9 
Hedge Funds— 71.6 48.2 
Leveraged Buyout7.6 30.7 4.4 
Other1.1 1.5 8.2 
Total Reported as Other Equity Interests at Fair Value130.8 292.0 248.1 
Reported as Other Equity Interests at Modified Cost:
Mezzanine Debt— — 1.6 
Other0.2 15.7 18.9 
Total Reported as Other Equity Interests at Modified Cost0.2 15.7 20.5 
Total Investments in Limited Liability Companies and Limited Partnerships$303.8 $533.0 $489.0 

33

Kemper Corporation
Definitions of Non-GAAP Financial Measures
The Company believes that investors’ understanding of Kemper’s performance is enhanced by the disclosure of the following non-GAAP financial measures. The methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.
Book Value Per Share Excluding Goodwill is a calculation that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity excluding goodwill by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. Book Value Per Share Excluding Goodwill is a common measure used by analysts and investors to compare similar companies.
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities 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 on fixed income securities by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. The Company uses the trends in book value per share excluding the after-tax impact of net unrealized gains 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. The Company 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. The Company believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers. 
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities and Goodwill 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 on fixed income securities and goodwill by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. The Company uses the trends in book value per share excluding the after-tax impact of net unrealized gains on fixed income securities 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. The Company 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. The Company believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers.
Adjusted Consolidated Net Operating Income (Loss) is an after-tax, non-GAAP financial measure and is computed by excluding from Net Income (Loss) the after-tax impact of:
1) Income (Loss) from Change in Fair Value of Equity and Convertible Securities;
2) Net Realized Gains on Sales of Investments;
3) Impairment Losses;
4) Acquisition Related Transaction, Integration and Other Costs;
5) Debt Extinguishment, Pension and Other Charges; and
6) 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).
The Company believes that Adjusted Consolidated Net Operating Income 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 Equity and Convertible Securities, Net Realized Gains on Sales of Investments and Impairment Losses related to investments included in the Company’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 the Company’s investments, the timing of which is unrelated to the insurance underwriting process. Acquisition Related Transaction and Integration 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 and Other Charges relate to (i) loss from early extinguishment of debt, which is driven by the Company’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 are made by the Company, 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. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.
34

Kemper Corporation
Definitions of Non-GAAP Financial Measures (continued)
A reconciliation of Net Income to Adjusted Consolidated Net Operating Income is presented below:
 Three Months EndedYear Ended
Dollars in Millions (Unaudited)Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Net Income$97.5 $122.3 $126.1 $64.0 $124.7 $129.0 $122.1 $155.3 $409.9 $531.1 
Less Net Income (Loss) From:
Change in Fair Value of Equity and Convertible Securities57.8 35.7 56.6 (93.1)30.9 7.8 20.1 50.9 57.0 109.7 
Net Realized Gains on Sales of Investments(0.1)7.9 9.3 13.0 2.2 1.4 16.8 12.7 30.1 33.1 
Impairment Losses0.4 (0.8)(5.5)(9.5)(1.3)(1.5)(5.3)(2.8)(15.4)(10.9)
Acquisition Related Transaction, Integration and Other Costs(15.8)(11.4)(13.5)(9.3)(5.0)(4.1)(1.0)(4.4)(50.0)(14.5)
Debt Extinguishment, Pension and Other Charges(50.6)— — — — (4.6)— — (50.6)(4.6)
Adjusted Consolidated Net Operating Income$105.8 $90.9 $79.2 $162.9 $97.9 $130.0 $91.5 $98.9 $438.8 $418.3 
Adjusted Consolidated Net Operating Income Per Unrestricted Share is a non-GAAP financial measure. It is computed by dividing Adjusted Consolidated Net Operating Income by the weighted average unrestricted shares outstanding. The most directly comparable GAAP financial measure is Net Income Per Unrestricted Share‐basic. A reconciliation of Net Income Per Unrestricted Share-basic to Adjusted Consolidated Net Operating Income Per Unrestricted Share-basic is presented below:
 Three Months EndedYear Ended
(Unaudited)Dec 31,
2020		Sep 30,
2020		Jun 30,
2020		Mar 31,
2020		Dec 31,
2019		Sep 30,
2019		Jun 30,
2019		Mar 31,
2019		Dec 31,
2020		Dec 31,
2019
Net Income Per Unrestricted Share$1.49 $1.87 $1.93 $0.96 $1.87 $1.93 $1.87 $2.38 $6.24 $8.04 
Less Net Income (Loss) Per Unrestricted Share From:
Change in Fair Value of Equity and Convertible Securities0.87 0.54 0.87 (1.40)0.46 0.11 0.31 0.78 0.87 1.66 
Net Realized Gains on Sales of Investments— 0.12 0.14 0.19 0.03 0.02 0.26 0.19 0.46 0.50 
Impairment Losses0.01 (0.01)(0.08)(0.14)(0.02)(0.02)(0.08)(0.04)(0.24)(0.16)
Acquisition Related Transaction and Integration Costs(0.24)(0.17)(0.21)(0.14)(0.06)(0.06)(0.01)(0.07)(0.76)(0.22)
Debt Extinguishment, Pension and Other Charges(0.77)— — — — (0.07)— — (0.77)(0.07)
Adjusted Consolidated Net Operating Income Per Unrestricted Share$1.62 $1.39 $1.21 $2.45 $1.46 $1.95 $1.39 $1.52 $6.68 $6.33 
Underlying Combined Ratio 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, including the impact of catastrophe losses and loss and LAE reserve development from prior years, with the Insurance Expense Ratio. The Company believes the underlying combined ratio is useful to investors and is used by management to reveal the trends in the Company’s property and casualty insurance businesses that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses cause loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on 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 our insurance products in the current period. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company’s underwriting performance. The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business. 
35
Fourth Quarter 2020 Earnings

 
Cautionary Statements Regarding Forward-Looking Information Non-GAAP Financial Measures Preliminary Matters 2

 
Create Long-Term Shareholder Value Leverage competitive advantages to grow returns and BVPS1 over time ¹ Book value per share 2 Return on equity Sustainable competitive advantages and build core capabilities Growing returns and book value per share over time Diversified sources of earnings; Strong capital/liquidity positions; Disciplined approach to capital management • • • Strategic focus: 3

 
Fourth Quarter 2020 Highlights Solid results and premium growth in a challenging environment Top-line growth slightly impacted by operating environment; long-term trajectory remains intact • • • 4th Quarter Overview Delivered double-digit ROE and 10% growth in adjusted consolidated net operating EPS • • • • • Shareholder Value Creation ¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 23-32 2 Return on average shareholders’ equity (5-point average) Strong capital and liquidity position provides significant financial flexibility • • • Financial Strength 4

 
68.5% 77.8% 72.2% 69.8% 68.2% 21.3% 18.1% 17.8% 18.7% 19.5% 2016 2017 2018 2019 9/30/20 LTM Loss & LAE Ratio Net Expense Ratio 89.8% 95.9% 90.0% 88.5% AZ 6% IL 18% IN 6% NV 8% TX 62% GAAP Combined Ratio American Access Will Accelerate Specialty Auto Growth Company profile aligns with our strategy; 1Q 2021 expected close Business Mix Enhancing Specialty Market Capabilities 5 Agency Channel Distribution Geographic Mix LTM Net Written Premium: $359 million 2 • • • • • • Note: LTM figures are for the last twelve months ending September 30, 2020. 1 Assumes captive agency income tax-effected at 21%; excludes realized gains and change in fair value of equities. 2 Expense ratio shown net of policy and installment fees. 87.7% Independent 73% Captive 27%

 
Fourth Quarter Financial Highlights 16% ROATCE and 15% YoY growth in TBV per common share excluding unrealized gains1 As Reported As Reported Quarter Ended Full Year (Dollars in millions, except per share amounts) Dec 31, 2020 Dec 31, 2019 Dec 31, 2020 Dec 31, 2019 6 ¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 23-32

 
Review of Net Operating Income ¹ Non-GAAP financial measure; see reconciliation in appendix pages 23-32 *All Other includes partial satisfaction of judgment, sale of Classic Car, refinement of CEI estimate and impact of purchase accounting Adjusted Consolidated Net Operating Income Per Share Increased 10% 7 Three Months Ended, As Reported Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Variance Dollars per Unrestricted Share - Diluted 2020 2020 2020 2020 2019 QoQ Net Income 1.46$ 1.83$ 1.91$ 0.95$ 1.85$ (0.39) Adj. Consolidated Net Operating Income 1.59 1.36 1.20 2.43 1.45 0.14 Sources of Volatility:

 
Reduced Pension Liability Exposure Further de-risked non-strategic pension obligation – Ongoing Plan funding > ~100% 8 • • •

 
Consistent Capital Generation and Attractive Returns Steady growth through various economic cycles Total Adjusted Return of BVPS Ex. Unrealized Gains on Fixed Maturities and Goodwill Return on Shareholders’ Equity 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 $33.42$31.21 $31.10 $29.66 $36.46 $38.43 $40.27 $40.70 $44.41 $42.58 $46.76 1.1% 8.0% 11.4% 16.6% 19.9% 20.3% 24.7% 19.5% 18.8% 17.9% 16.3% 0.9% 6.6% 8.3% 11.4% 13.3% 13.1% 16.3% 13.0% 12.8% 12.3% 11.3% 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 Growth 58% • • • • ¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 23-32 2 Return on average tangible common equity (rolling 5 point avg.); please see reconciliation in appendix on pages 23-32 3 Return on average shareholder’s equity excluding unrealized gains on fixed maturities (rolling 5 point avg.); please see reconciliation in appendix on pages 22-32 9

 
27.4% 27.6% 21.9% 23.0% 16.4% 20.4% Debt-to-Capital <30% Strong Balance Sheet with Well-Funded Insurance Entities Significant capital and liquidity positions Debt Cash Flow from Operating Activities Total Capitalization Parent Company Liquidity Risk-Based Capital Ratios $341 $299 $197 $101 $207 $733 $400 $385 $385 $540 $660 $700 (M M ) 375 415 430 410 355 340330 335 290 285 365 330 (% ) $741 $641$582$684 (M M ) $215 $241 $241 $539 $534 $425 $867 10 $1,433

 
52% 15% 6% 6% 6% 8% 7% Other States/ Munis 63% 30% 5% 2% Diversified & Highly-Rated Portfolio Fixed Maturity Ratings $7.6 Billion A or Higher ≤ CCC B / BB BBB Diversified Portfolio with Consistent Returns Note: Charts may not balance due to rounding ¹ Includes COLI. Please see reconciliation of COLI’s inclusion in net investment income on page 26 2 Equity securities excludes $295 million of Other Equity Interests of LP/LLC’s that have been reclassified into Alternative Investments • • • $88 $80 $80 $81 $81 $6 $6 $(12) $11 $22 Net Investment Income¹ (M M ) $97 $103$92$68$86 Overview Corporates Short-term Alternatives² Equity² U.S. Gov’t Portfolio Composition Pre-Tax Equiv. Annualized Book Yield¹ $10.4 Billion 4.6% 4.1% 3.2% 4.2% 4.7% 0.9% 11

 
93.1 93.1 88.5 85.4 90.8 92.3 93.1 91.0 88.9 89.4 Underlying Combined Ratio¹ Specialty Property & Casualty Insurance Segment1 Sustainable competitive advantages position Specialty for growth at solid margins Source: Population growth sources include U.S. Census Bureau and The Association Institute ¹ As adjusted for acquisition; see reconciliation on Pages 23-32 2 Non-GAAP financial measure; see reconciliation in appendix on pages 23-32 • • • • (% ) Key Highlights Written Premium Population CAGR State Groupings TTM ($ million) YoY Growth ’16-’19 Est. ’20-’30 12 Key Metrics ($ in millions) 4Q’20 Change to 4Q’19 2 2

 
Preferred Property & Casualty Insurance Segment Underlying combined ratio on a quarter-over-quarter basis decreased 3 points Key Highlights 104.5 97.5 88.6 96.8 103.1 82.9 83.5 77.8 80.4 77.6 Underlying Combined Ratio¹ ¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 23-32 • • • • (% ) 13 Key Metrics ($ in millions) 4Q’20 Change to 4Q’19 Auto Home & Other

 
Life & Health Insurance Segment Business remains profitable while absorbing protracted “P&C catastrophe-like” pandemic Note: Chart may not balance due to rounding ¹ Excludes other income 2 Please see reconciliation of COLI’s inclusion in net investment income on page 26 (M M ) • • • Key Highlights $161 $163 $163 $161 $162 $55 $51 $44 $51 $53 Revenues1 $215$207$214$216 $211Key Metrics ($ in millions) 4Q’20 Change to 4Q’19 L&H Life 14

 
Appendix 15

 
A Leading Specialized Insurer Taking advantage of a diversified portfolio of niche businesses…. 16

 
Capital Deployment Priorities Dedicated to being good stewards of capital 1. Investment in the business • • 2. Return capital to shareholders • • 17

 
Investment Portfolio Exposure to COVID Impacted Categories 18 $89 $69 $68 $39 $49 $122 $13 $2 $4 $32 $25 $1 $21 $5 $4 1.2% 0.9% 0.9% 0.5% 0.6% 1.6% 0.2% 0.0% 0.0% 0.4% 0.3% 0.0% 0.3% 0.1% 0.1% $ A m ou nt (M M ) % o f F ix ed M at ur it y Po rt fo lio Fixed income investments in COVID exposed industry sectors is manageable Energy ($264MM | 4% of Port) Retail ($185MM | 2% of Port) Leisure ($63MM / 1% of Port) Transportation ($31MM | <0.5% of Port)

 
Below Investment Grade Fixed Maturities Portfolio of $490 Million 19 Portfolio is diversified across different asset types $207 $103 $95 $62 $19 $5 $1 $0 42.2% 20.9% 19.4% 12.6% 3.8% 0.9% 0.2% 0.0% B el ow In ve st m en t G ra de $ A m ou nt (M M ) % o f F ix ed M at ur it y Po rt fo lio

 
CLO Composition ($768 Million) 20 $92 $532 $23 $26 $95 11.9% 69.3% 3.0% 3.4% 12.4% $ A m ou nt (M M ) % o f C LO P or tf ol io CLOs represent 7.4% of investment portfolio

 
Alternative Investment Portfolio of $533 Million 21 Portfolio is highly diversified with strategies focused on private credit, private equity and hedge funds $329.6 $110.5 $71.6 $21.3 Private Credit Private Equity Hedge Funds Tax Equity Funds

 
2021 Reinsurance Program Both programs were renewed with no significant change • • Catastrophe Reinsurance Program (Multi-Year) • • • Aggregate Catastrophe Program 2021 Aggregate Catastrophe Reinsurance Program 22 Retention 3-Year Term Placed 1/1/20 $100M xs $150M 31.67% Placed 3-Year Term Placed 1/1/21 $100M xs $150M 31.67% Placed* 3-Year Term Placed 1/1/20 $100M xs $50M 31.67% Placed 3-Year Term Placed 1/1/21 $100M xs $50M 31.67% Placed* 3-Year Term Placed 1/1/19 $100M xs $50M 31.67% Placed Retention 100% of first $50M Re te n tion 5% of $2 25M xs $ 50 M 3-Year Term Placed 1/1/19 $100M xs $150M 31.67% Placed 1-Year Term Placed 1/1/21 $25M xs $250M 95% Placed *4% was placed on an annual basis through Reinsurance Facilities

 
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities and Goodwill Non-GAAP Financial Measures 23

 
Return on Equity Non-GAAP Financial Measures 24

 
Reconciliation of “All Other” Sources of Volatility Non-GAAP Financial Measures 25 Three Months Ended, As Reported Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Variance Dollars per Unrestricted Share - Diluted 2020 2020 2020 2020 2019 QoQ

 
Reconciliation of COLI investment into Net Investment Income. Non-GAAP Financial Measures 26

 
Adjusted Consolidated Net Operating Income Non-GAAP Financial Measures 27

 
Diluted Adjusted Consolidated Net Operating Income Per Unrestricted Share Non-GAAP Financial Measures 28

 
Underlying Combined Ratio Non-GAAP Financial Measures 29

 
Underlying Combined Ratio – Continued Non-GAAP Financial Measures 30 Specialty P&C Insurance Preferred P&C Insurance Preferred Auto Preferred Home & Other

 
As Adjusted for Acquisition – Continued Non-GAAP Financial Measures ¹ As Adjusted is a non-GAAP measure, which is comprised by excluding impact of purchase accounting in 2018 and including historical results of Kemper and Infinity in periods prior to acquisition date of July 2, 2018. 31 Specialty P&C Insurance Segment 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 Earned Premiums Current Year Non-CAT Losses and LAE Insurance Expenses As Adjusted 1 Underlying Combined Ratio Three Months Ended

 
As Adjusted for Acquisition – Continued Non-GAAP Financial Measures ¹ As Adjusted is a non-GAAP measure, which is comprised by excluding impact of purchase accounting in 2018 and including historical results of Kemper and Infinity in periods prior to acquisition date of July 2, 2018. 32 Specialty Personal Automobile Insurance 31-Dec-20 30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19 Earned Premiums Current Year Non-CAT Losses and LAE Insurance Expenses As Adjusted 1 Underlying Combined Ratio Three Months Ended