KEMPER Corp 8-K, filed Nov 23, 2020
KEMPER Corp (KMPR)
8-K
2020-11-23
For: 2020-11-22
View Original
Added on
April 09, 2026
About this 8-K
KEMPER Corp filed this 8-K on November 23, 2020, reporting on events of November 22, 2020.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
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): November 22, 2020
(Exact name of registrant as specified in its charter)
Commission File Number: 001-18298
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) | |||||||
(Address of principal executive offices, including zip code)
(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 class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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 8 – Other Events
| Item 8.01 | Other Events. | ||||
On November 22, 2020, Kemper Corporation (“Kemper” or the “Company”) and one of its wholly-owned subsidiaries entered into a definitive agreement to acquire American Access Casualty Company and its related captive insurance agency, Newins Insurance Agency Holdings, LLC, and its subsidiaries, in a cash transaction valued at $370 million. The transaction is expected to close in the first quarter of 2021, subject to regulatory approval and other customary closing conditions.
A copy of the press release announcing the transaction and a presentation outlining additional information related to the transaction are attached as Exhibits 99.1 and 99.2.
Caution Regarding Forward-Looking Statements
This Current Report on Form 8-K 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 of this report. 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 report, 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.
Section 9 – Financial Statements and Exhibits
| Item 9.01 | Financial Statements and Exhibits. | ||||
(d) Exhibits
| Exhibit Number | Exhibit Description | ||||
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). | ||||
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: | November 23, 2020 | /s/ C. Thomas Evans, Jr. | ||||||||||||
| C. Thomas Evans, Jr. | ||||||||||||||
| Executive Vice President, Secretary & General Counsel | ||||||||||||||
Exhibit 99.1
 | Kemper Corporation 200 East Randolph Street Suite 3300 Chicago, IL 60601 kemper.com | ||||
| Press Release | |||||
KEMPER TO ACQUIRE AMERICAN ACCESS
IN $370 MILLION TRANSACTION
Transaction Furthers Expansion and Expertise in Specialty Auto Segment,
Strengthens Hispanic Market Alignment
CHICAGO, November 23, 2020 – Kemper Corporation (NYSE: KMPR) announced today that it has entered into a definitive agreement to acquire American Access Casualty Company and its related captive insurance agency, Newins Insurance Agency Holdings, LLC, and its subsidiaries (collectively “AAC”), in a cash transaction valued at $370 million. The transaction is expected to close in the first quarter of 2021, subject to regulatory approval and other customary closing conditions.
AAC, headquartered in Downers Grove, Illinois, provides specialty private passenger auto insurance in Arizona, Illinois, Indiana, Nevada and Texas. AAC wrote over $370 million of direct premiums in 2019 through a network of approximately 500 independent agents and over 110 captive agents. AAC’s multi-channel distribution strategy, agency relationships, and deep ties to the markets it serves—particularly Hispanic communities—have driven strong growth and consistent profitability.
“AAC is a great addition to Kemper’s specialty auto franchise and aligns with our strategic intent to serve growing niche markets with affordable and easy-to-use products,” said Duane Sanders, President of Kemper’s P&C Division. “Their distribution capabilities, including strong customer and agent relationships, will expand our geographic footprint and when combined with our financial resources will create increased reach and incremental scale. We look forward to having AAC join the Kemper team.”
The transaction is expected to be accretive to Kemper’s earnings per share (EPS) and return on tangible common equity in the first year, excluding value of business acquired and one-time items, and result in high single-digit EPS accretion in the second year, excluding restructuring and one-time items. Tangible book value per share is expected to return to pre-transaction levels within the first year following the close of the transaction.
A presentation outlining additional information related to the transaction is available online in the Investors section of kemper.com.
Sidley Austin LLP served as legal counsel for Kemper. Piper Sandler & Co. acted as financial advisor to AAC and Winston & Strawn LLP served as legal counsel for AAC.
About Kemper
The Kemper (NYSE: KMPR) family of companies is one of the nation’s leading specialized insurers. With $14.1 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 services over 6.3 million policies, is represented by more than 30,000 agents and brokers, and has over 9,300 associates dedicated to meeting the ever-changing needs of its customers. Learn more about Kemper.
About American Access
American Access, headquartered in Downers Grove, Illinois, is a specialty line auto insurance carrier (American Access Casualty Company) and agency (Newins Insurance Agency Holdings, LLC). American Access Casualty Company was chartered in 1999. Newins Insurance Agency Holdings, LLC began operations in 1975. The combined entities have been serving their insureds for over 20 years and focus on large, urban areas with a substantial concentration in Hispanic communities. For more information about American Access Casualty Company and Newins, please visit https://www.aains.com/about-us/ and https://newinsllc.com/about-newins/.
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.
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.
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Contacts
Investors: Christine Patrick, 312.661.4803, cpatrick@kemper.com
News Media: Barbara Ciesemier, 312.661.4521, bciesemier@kemper.com
Exhibit 99.2 Kemper Corporation: Acquisition of American Access November 23, 2020
Preliminary Matters Cautionary Statements Regarding Forward-Looking Information This presentation 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 of this presentation. 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 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 presentation, 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. 2
American Access Acquisition Accelerates Specialty Auto Strategy $370 million cash purchase price | 1Q 2021 estimated close Enhancing Specialty Market Capabilities Industry Leading Specialty Auto Growth Private Passenger Auto + Extends reach within specialty auto customer segment 1 (MM Commrcl. Vehicle Premium CAGR • Expands customer profile and enhances specialty capabilities, Industry 6% $3.8 ($ Billions) ($ particularly within Hispanic customer base KMPR 40% $0.4 Expanded distribution network $3.2 • Strengthens independent agent network and provides access to a $2.9 captive channel with deep ties in Hispanic communities Geographic diversification • Diversifies and scales footprint in attractive specialty markets $1.6 (AZ, IL, IN, NV, TX) Increases specialty auto scale and growth opportunities $3.4 • Scalable model that provides growth opportunities across new and existing geographies $1.0 $0.9 Value accretive transaction $0.8 $1.3 • High single digit run-rate earnings accretion; tangible book value $0.4 per share returns to current levels within a year following close $0.4 Aligns with capital deployment philosophy 2 2 2 • Deploying capital in an acquisition that accelerates our strategy and 2015 2016 2017 2018 2019 9/30/20 LTM drives long-term value for shareholders Base Net Written Premium Acquired Net Written Premium 1 Source: S&P Global industry aggregates. CAGR based on Net Written Premiums (NWP) from 2015 – 6/30/20 LTM and includes American Access’s NWP for Kemper. 2 For illustrative purposes, annual net written premium acquired is fully reflected in the year of acquisition. 3
American Access Overview Specialty auto insurer focused on Hispanic and non-standard customers Business Highlights Multi-Channel Specialty Auto Insurer Headquarters Downers Grove, IL • Large Hispanic customer base (>75% of customers) LTM Net Written Premium $359mm • ~50% of employee base is bilingual LTM GAAP Combined Ratio 87.7% • Focus on low limit auto policies LTM Adjusted Operating Income1 $44mm • Multi-channel distribution strategy (independent and captive agents) with deep ties in Hispanic communities 3Q20 Tangible Book Value $159mm • Strong financial performance demonstrated by consistent # of Independent Agents ~500 and sustainable margins and cash flows # of Captive Locations 84 • Scalable business model with opportunities to expand geographically within its customer segment # of Employees ~500 Business Mix GAAP Combined Ratio Agency Channel Distribution Geographic Mix 89.8% 95.9% 90.0% 88.5% 87.7% AZ 18.1% 6% 21.3% 17.8% 18.7% 19.5% Captive IL 27% 18% IN 6% 77.8% TX 68.5% 72.2% 69.8% 68.2% 62% NV 8% Independent 73% 2016 2017 2018 2019 9/30/20 LTM LTM Net Written Premium: $359 million 2 Loss & LAE Ratio Net Expense Ratio 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. 4 2 Expense ratio shown net of policy and installment fees.