8-K
KEMPER Corp (KMPR)
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): January 31, 2022
Kemper Corporation
(Exact name of registrant as specified in its charter)
Commission File Number: 001-18298
| DE | 95-4255452 |
|---|---|
| (State or other jurisdiction<br>of incorporation) | (IRS Employer<br>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 class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.10 per share | KMPR | NYSE |
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 January 31, 2022, Kemper Corporation ("Kemper" or the "Registrant") issued a press release announcing its financial results for the fourth quarter of 2021 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 January 31, 2022.
99.2 Fourth Quarter 2021 Investor Supplement of Kemper Corporation.
99.3 Fourth Quarter 2021 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: | January 31, 2022 | /s/ JAMES J. MCKINNEY |
| James J. McKinney | ||
| Executive Vice President and Chief Financial Officer (principal financial officer) |
Document
Exhibit 99.1
 |
Kemper Corporation<br><br>200 East Randolph Street<br><br>Suite 3300<br><br>Chicago, IL 60601<br><br>kemper.com |
|---|---|
| Press Release |
Kemper Reports Fourth Quarter 2021 Operating Results
CHICAGO, January 31, 2022 — Kemper Corporation (NYSE: KMPR) reported net loss of $105.8 million, or $(1.66) per diluted share, for the fourth quarter of 2021, compared to net income of $97.5 million, or $1.46 per diluted share, for the fourth quarter of 2020. As Adjusted for Acquisitions1 of American Access Casualty Company (“AAC”) and Infinity Property and Casualty Corporation, net loss was $101.3 million, or $(1.59) per diluted share, for the fourth quarter of 2021, compared to net income of $117.6 million, or $1.76 per diluted share, for the fourth quarter of 2020. In the fourth quarter of 2021, net loss included a $17.5 million after-tax gain, or $0.27 per diluted share, attributable to the change in fair value of equity and convertible securities.
Adjusted Consolidated Net Operating Loss1 was $130.8 million, or $(2.05) per diluted share, for the fourth quarter of 2021, compared to Adjusted Consolidated Net Operating Income1 of $105.8 million, or $1.59 per diluted share, for the fourth quarter of 2020.
Key themes of the quarter include:
•Specialty P&C earned premiums increased 17.0% due to a 17.9% increase in policies-in-force and the initial impact of rate changes; AAC contributed 10.3% and 12.6% for earned premiums and policies-in-force, respectively
•Specialty P&C underlying combined ratio1 was 119.4%, due primarily to higher claim severity trends
•Rate and non-rate actions continued at an accelerated pace, but earned benefit was minimal in the quarter
•Investment portfolio continues to provide stable net investment income supporting long-term business objectives
•Declared dividend of $0.31 per share
“This was another challenging quarter, and it goes without saying we’re disappointed in our profitability,” said President, CEO and Chairman Joseph P. Lacher, Jr. “The pandemic-driven environmental challenges the industry has experienced in the last couple of quarters intensified further in the fourth quarter, impacting results in each of our businesses. That said, we closed the year making significant progress on corrective measures that will become visible in the coming quarters. Overall, I couldn’t be prouder of our team and how our organization has responded to the circumstances and challenges in the last couple of years. We remain focused on managing through these circumstances, and our team will continue to deliver on our promises and provide attractive, long-term intrinsic value for our shareholders.”
1 Non-GAAP financial measure. All Non-GAAP financial measures are denoted with footnote 1 throughout this release. See “Use of Non-GAAP Financial Measures” for additional information.
| Three Months Ended | Year Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (Dollars in Millions, Except Per Share Amounts) (Unaudited) | Dec 31,<br>2021 | Dec 31,<br>2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||
| Net Income (Loss) | $ | (105.8) | $ | 97.5 | $ | (120.5) | $ | 409.9 |
| Adjusted Consolidated Net Operating Income (Loss) 1 | $ | (130.8) | $ | 105.8 | $ | (218.8) | $ | 438.8 |
| Impact of Catastrophe Losses and Related Loss Adjustment Expense (LAE) on Net Income | $ | (10.2) | $ | (4.4) | $ | (85.2) | $ | (84.3) |
| Diluted Net Income (Loss) Per Share From: | ||||||||
| Net Income (Loss) | $ | (1.66) | $ | 1.46 | $ | (1.87) | $ | 6.14 |
| Adjusted Consolidated Net Operating Income (Loss) 1 | $ | (2.05) | $ | 1.59 | $ | (3.40) | $ | 6.57 |
| Impact of Catastrophe Losses and Related LAE on Net Income (Loss) Per Share | $ | (0.16) | $ | (0.07) | $ | (1.33) | $ | (1.26) |
Revenues
Total revenues for the fourth quarter of 2021 increased $101.8 million, or 7 percent, to $1,493.9 million, compared to the fourth quarter of 2020, driven by $149.9 million of higher Specialty P&C earned premiums, partially offset by a $50.9 million decrease attributable to the change in fair value of equity and convertible securities. Specialty P&C earned premiums increased due primarily to the acquisition of AAC and growth in existing portfolio. Net investment income increased $5.7 million to $108.4 million in the fourth quarter of 2021 compared to the fourth quarter of 2020 due primarily to higher levels of investments and rate on Company-Owned Life Insurance. Net realized investment gains were $21.7 million in the fourth quarter of 2021, compared to a net loss of $0.1 million in the fourth quarter of 2020.
Segment Results
Unless otherwise noted, (i) the segment results discussed below are presented on an after-tax basis, (ii) prior-year development includes both catastrophe and non-catastrophe losses and LAE, (iii) catastrophe losses and LAE exclude the impact of prior-year development, (iv) loss ratio includes loss and LAE, and (v) all comparisons are made to the prior year quarter unless otherwise stated.
| Three Months Ended | Year Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (Dollars in Millions) (Unaudited) | Dec 31,<br>2021 | Dec 31,<br>2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||
| Segment Net Operating Income (Loss): | ||||||||
| Specialty Property & Casualty Insurance | $ | (125.2) | $ | 91.1 | $ | (196.1) | $ | 337.9 |
| Preferred Property & Casualty Insurance | (7.4) | 16.9 | (12.5) | 3.5 | ||||
| Life & Health Insurance | 5.1 | 9.4 | 28.2 | 60.0 | ||||
| Total Segment Net Operating Income (Loss) | (127.5) | 117.4 | (180.4) | 401.4 | ||||
| Corporate and Other Net Operating Income (Loss) | (3.3) | (11.6) | (38.4) | 37.4 | ||||
| Adjusted Consolidated Net Operating Income (Loss) 1 | (130.8) | 105.8 | (218.8) | 438.8 | ||||
| Net Income (Loss) From: | ||||||||
| Change in Fair Value of Equity and Convertible Securities | 17.5 | 57.8 | 90.5 | 57.0 | ||||
| Net Realized Gains on Sales of Investments | 17.2 | (0.1) | 51.2 | 30.1 | ||||
| Impairment Losses | (2.5) | 0.4 | (8.7) | (15.4) | ||||
| Acquisition Related Transaction, Integration and Other Costs | (7.2) | (15.8) | (34.7) | (50.0) | ||||
| Debt Extinguishment, Pension and Other Charges | — | (50.6) | — | (50.6) | ||||
| Net Income (Loss) | $ | (105.8) | $ | 97.5 | $ | (120.5) | $ | 409.9 |
The Specialty Property & Casualty Insurance segment reported net operating loss of $125.2 million for the fourth quarter of 2021, compared to net operating income of $91.1 million in the fourth quarter of 2020. Results decreased due primarily to higher Underlying Combined Ratio1. The segment’s Underlying Combined Ratio1 was 119.4 percent, compared to 91.3 percent in the fourth quarter of 2020.
The Preferred Property & Casualty Insurance segment reported net operating loss of $7.4 million for the fourth quarter of 2021, compared to net operating income of $16.9 million in the fourth quarter of 2020. Results deteriorated due primarily to a higher Underlying Combined Ratio1, higher catastrophe losses and LAE, partially offset by lower adverse prior year development. The segment’s Underlying Combined Ratio1 was 106.9 percent, compared to 93.6 percent in the fourth quarter of 2020.
The Life & Health Insurance segment reported net operating income of $5.1 million for the fourth quarter of 2021, compared to $9.4 million in the fourth quarter of 2020.
Capital
Total Shareholders’ Equity at the end of the quarter was $4,007.7 million, a decrease of $555.7 million, or 12 percent, since year-end 2020 primarily driven by a decrease in the valuation of our fixed income bond portfolio, a net operating loss, repurchases of common stock, and cash dividends. Kemper and its direct non-insurance subsidiaries ended the quarter with cash and investments of $233.9 million, and the $400.0 million revolving credit agreement was undrawn.
On November 3, 2021, Kemper announced that its Board of Directors declared a quarterly dividend of $0.31 per share, or $19.9 million. The dividend was paid on December 1, 2021 to its shareholders of record as of November 15, 2021.
Kemper ended the quarter with a book value per share of $62.93, a decrease of 10 percent from $69.74 at the end of 2020. Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1 was $55.04, compared to $58.67 at the end of 2020.
Unaudited condensed consolidated statements of income for the three and twelve months ended December 31, 2021 and 2020 are presented below.
| Three Months Ended | Year Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (Dollars in Millions, Except Per Share Amounts) | Dec 31,<br>2021 | Dec 31,<br>2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||
| Revenues: | ||||||||
| Earned Premiums | $ | 1,359.1 | $ | 1,214.0 | $ | 5,253.7 | $ | 4,672.2 |
| Net Investment Income | 108.4 | 102.7 | 427.3 | 348.2 | ||||
| Change in Value of Alternative Energy Partnership Investments2 | (14.3) | — | (61.2) | — | ||||
| Other Income | — | 1.9 | 4.8 | 94.6 | ||||
| Income (Loss) from Change in Fair Value of Equity and Convertible Securities | 22.2 | 73.1 | 114.6 | 72.1 | ||||
| Net Realized Gains on Sales of Investments | 21.7 | (0.1) | 64.8 | 38.1 | ||||
| Impairment Losses | (3.2) | 0.5 | (11.0) | (19.5) | ||||
| Total Revenues | 1,493.9 | 1,392.1 | 5,793.0 | 5,205.7 | ||||
| Expenses: | ||||||||
| Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses | 1,276.0 | 863.4 | 4,600.8 | 3,323.6 | ||||
| Insurance Expenses | 309.1 | 279.3 | 1,218.1 | 1,100.5 | ||||
| Interest and Other Expenses | 56.2 | 128.8 | 219.4 | 271.5 | ||||
| Total Expenses | 1,641.3 | 1,271.5 | 6,038.3 | 4,695.6 | ||||
| Income (Loss) before Income Taxes | (147.4) | 120.6 | (245.3) | 510.1 | ||||
| Income Tax Benefit (Expense) | 41.6 | (23.1) | 124.8 | (100.2) | ||||
| Net Income (Loss) | $ | (105.8) | $ | 97.5 | $ | (120.5) | $ | 409.9 |
| Net Income (Loss) Per Unrestricted Share: | ||||||||
| Basic | $ | (1.66) | $ | 1.49 | $ | (1.87) | $ | 6.24 |
| Diluted | $ | (1.66) | $ | 1.46 | $ | (1.87) | $ | 6.14 |
| Weighted-average Outstanding (Shares in Thousands): | ||||||||
| Unrestricted Shares - Basic | 63,654.6 | 65,413.7 | 64,264.4 | 65,636.1 | ||||
| Unrestricted Shares and Equivalent Shares - Diluted | 63,654.6 | 66,528.7 | 64,264.4 | 66,729.8 | ||||
| Dividends Paid to Shareholders Per Share | $ | 0.31 | $ | 0.30 | $ | 1.24 | $ | 1.20 |
2The Alternative Energy Partnership Investments results are included as a pre-tax loss in the Change in Value of Alternative Energy Partnership Investments of $14.3 million and $61.2 million and benefit in income tax expense of $11.2 million and $79.0 million for a net loss of $3.1 million and net income of $17.8 million for the three and twelve months ended December 31, 2021, respectively.
Unaudited business segment revenues for the three and twelve months ended December 31, 2021 and 2020 are presented below.
| Three Months Ended | Year Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (Dollars in Millions) | Dec 31,<br>2021 | Dec 31,<br>2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||
| REVENUES: | ||||||||
| Specialty Property & Casualty Insurance: | ||||||||
| Earned Premiums: | ||||||||
| Specialty Automobile | $ | 918.1 | $ | 796.1 | $ | 3,533.7 | $ | 3,031.3 |
| Commercial Automobile | 114.2 | 86.3 | 414.8 | 304.0 | ||||
| Total Earned Premiums | 1,032.3 | 882.4 | 3,948.5 | 3,335.3 | ||||
| Net Investment Income | 37.8 | 37.9 | 152.5 | 114.1 | ||||
| Change in Value of Alternative Energy Partnership Investments | (6.7) | — | (29.0) | — | ||||
| Other Income | 1.0 | 0.4 | 4.1 | 1.8 | ||||
| Total Specialty Property & Casualty Insurance Revenues | 1,064.4 | 920.7 | 4,076.1 | 3,451.2 | ||||
| Preferred Property & Casualty Insurance: | ||||||||
| Earned Premiums: | ||||||||
| Preferred Automobile | 101.4 | 107.1 | 410.5 | 431.7 | ||||
| Homeowners | 52.7 | 53.3 | 207.3 | 220.7 | ||||
| Other Personal | 8.5 | 8.8 | 33.9 | 35.8 | ||||
| Total Earned Premiums | 162.6 | 169.2 | 651.7 | 688.2 | ||||
| Net Investment Income | 17.1 | 13.4 | 68.6 | 37.7 | ||||
| Change in Value of Alternative Energy Partnership Investments | (3.8) | — | (16.3) | — | ||||
| Other Income | — | — | — | 0.1 | ||||
| Total Preferred Property & Casualty Insurance Revenues | 175.9 | 182.6 | 704.0 | 726.0 | ||||
| Life & Health Insurance: | ||||||||
| Earned Premiums: | ||||||||
| Life | 101.5 | 96.5 | 401.7 | 385.7 | ||||
| Accident & Health | 47.6 | 50.2 | 189.9 | 199.3 | ||||
| Property | 15.1 | 15.7 | 61.9 | 63.7 | ||||
| Total Earned Premiums | 164.2 | 162.4 | 653.5 | 648.7 | ||||
| Net Investment Income | 50.8 | 52.8 | 202.7 | 198.8 | ||||
| Change in Value of Alternative Energy Partnership Investments | (3.7) | — | (15.8) | — | ||||
| Other Income | (1.6) | — | (1.3) | 0.6 | ||||
| Total Life & Health Insurance Revenues | 209.7 | 215.2 | 839.1 | 848.1 | ||||
| Total Segment Revenues | 1,450.0 | 1,318.5 | 5,619.2 | 5,025.3 | ||||
| Income (Loss) from Change in Fair Value of Equity and Convertible Securities | 22.2 | 73.1 | 114.6 | 72.1 | ||||
| Net Realized Gains on Sales of Investments | 21.7 | (0.1) | 64.8 | 38.1 | ||||
| Impairment Losses | (3.2) | 0.5 | (11.0) | (19.5) | ||||
| Other | 3.2 | 0.1 | 5.4 | 89.7 | ||||
| Total Revenues | $ | 1,493.9 | $ | 1,392.1 | $ | 5,793.0 | $ | 5,205.7 |
KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)
| Dec 31,<br>2021 | Dec 31,<br>2020 | |||
|---|---|---|---|---|
| Assets: | ||||
| Investments: | ||||
| Fixed Maturities at Fair Value | $ | 7,986.9 | $ | 7,605.9 |
| Equity Securities at Fair Value | 830.6 | 858.5 | ||
| Equity Securities at Modified Cost | 32.3 | 40.1 | ||
| Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings | 241.9 | 204.0 | ||
| Alternative Energy Partnership Investments | 39.6 | 21.3 | ||
| Convertible Securities at Fair Value | 46.4 | 39.9 | ||
| Short-term Investments at Cost which Approximates Fair Value | 284.1 | 875.4 | ||
| Other Investments | 925.6 | 779.0 | ||
| Total Investments | 10,387.4 | 10,424.1 | ||
| Cash | 148.2 | 206.1 | ||
| Receivables from Policyholders | 1,418.7 | 1,194.5 | ||
| Other Receivables | 207.3 | 222.4 | ||
| Deferred Policy Acquisition Costs | 677.6 | 589.3 | ||
| Goodwill | 1,312.0 | 1,114.0 | ||
| Current Income Tax Assets | 173.1 | 15.6 | ||
| Other Assets | 592.2 | 575.9 | ||
| Total Assets | $ | 14,916.5 | $ | 14,341.9 |
| Liabilities and Shareholders’ Equity: | ||||
| Insurance Reserves: | ||||
| Life & Health | $ | 3,540.9 | $ | 3,527.5 |
| Property & Casualty | 2,772.7 | 1,982.5 | ||
| Total Insurance Reserves | 6,313.6 | 5,510.0 | ||
| Unearned Premiums | 1,898.7 | 1,615.1 | ||
| Policyholder Contract Liabilities | 504.0 | 467.0 | ||
| Deferred Income Tax Liabilities | 227.0 | 285.7 | ||
| Accrued Expenses and Other Liabilities | 843.6 | 727.9 | ||
| Debt at Amortized Cost | 1,121.9 | 1,172.8 | ||
| Total Liabilities | 10,908.8 | 9,778.5 | ||
| Shareholders’ Equity: | ||||
| Common Stock | 6.4 | 6.5 | ||
| Paid-in Capital | 1,790.7 | 1,805.2 | ||
| Retained Earnings | 1,762.5 | 2,071.2 | ||
| Accumulated Other Comprehensive Income | 448.1 | 680.5 | ||
| Total Shareholders’ Equity | 4,007.7 | 4,563.4 | ||
| Total Liabilities and Shareholders’ Equity | $ | 14,916.5 | $ | 14,341.9 |
Unaudited selected financial information for the Specialty Property & Casualty Insurance segment follows.
| Three Months Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in Millions) | Dec 31,<br>2021 | Dec 31,<br>2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||||||
| Results of Operations | ||||||||||||
| Net Premiums Written | $ | 979.0 | $ | 829.2 | $ | 4,057.3 | $ | 3,435.5 | ||||
| Earned Premiums | $ | 1,032.3 | $ | 882.4 | $ | 3,948.5 | $ | 3,335.3 | ||||
| Net Investment Income | 37.8 | 37.9 | 152.5 | 114.1 | ||||||||
| Change in Value of Alternative Energy Partnership Investments | (6.7) | — | (29.0) | — | ||||||||
| Other Income | 1.0 | 0.4 | 4.1 | 1.8 | ||||||||
| Total Revenues | 1,064.4 | 920.7 | 4,076.1 | 3,451.2 | ||||||||
| Incurred Losses and LAE related to: | ||||||||||||
| Current Year: | ||||||||||||
| Non-catastrophe Losses and LAE | 1,028.5 | 626.2 | 3,480.3 | 2,350.8 | ||||||||
| Catastrophe Losses and LAE | 2.5 | 5.5 | 15.7 | 12.3 | ||||||||
| Prior Years: | ||||||||||||
| Non-catastrophe Losses and LAE | (7.6) | (1.7) | 97.4 | 15.1 | ||||||||
| Catastrophe Losses and LAE | — | 0.1 | 0.3 | 0.2 | ||||||||
| Total Incurred Losses and LAE | 1,023.4 | 630.1 | 3,593.7 | 2,378.4 | ||||||||
| Insurance Expenses | 204.4 | 179.1 | 774.5 | 651.9 | ||||||||
| Operating Income (Loss) | (163.4) | 111.5 | (292.1) | 420.9 | ||||||||
| Income Tax Benefit (Expense) | 38.2 | (20.4) | 96.0 | (83.0) | ||||||||
| Segment Net Operating Income (Loss) | $ | (125.2) | $ | 91.1 | $ | (196.1) | $ | 337.9 | ||||
| Ratios Based On Earned Premiums | ||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 99.6 | % | 71.0 | % | 88.1 | % | 70.4 | % | ||||
| Current Year Catastrophe Losses and LAE Ratio | 0.2 | 0.6 | 0.4 | 0.4 | ||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | (0.7) | (0.2) | 2.5 | 0.5 | ||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | — | — | — | ||||||||
| Total Incurred Loss and LAE Ratio | 99.1 | 71.4 | 91.0 | 71.3 | ||||||||
| Insurance Expense Ratio | 19.8 | 20.3 | 19.6 | 19.5 | ||||||||
| Combined Ratio | 118.9 | % | 91.7 | % | 110.6 | % | 90.8 | % | ||||
| Underlying Combined Ratio1 | ||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 99.6 | % | 71.0 | % | 88.1 | % | 70.4 | % | ||||
| Insurance Expense Ratio | 19.8 | 20.3 | 19.6 | 19.5 | ||||||||
| Underlying Combined Ratio1 | 119.4 | % | 91.3 | % | 107.7 | % | 89.9 | % | ||||
| Non-GAAP Measure Reconciliation | ||||||||||||
| Combined Ratio | 118.9 | % | 91.7 | % | 110.6 | % | 90.8 | % | ||||
| Less: | ||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 0.2 | 0.6 | 0.4 | 0.4 | ||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | (0.7) | (0.2) | 2.5 | 0.5 | ||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | — | — | — | ||||||||
| Underlying Combined Ratio1 | 119.4 | % | 91.3 | % | 107.7 | % | 89.9 | % |
Unaudited selected financial information for the Preferred Property & Casualty Insurance segment follows.
| Three Months Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in Millions) | Dec 31,<br>2021 | Dec 31,<br>2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||||||
| Results of Operations | ||||||||||||
| Net Premiums Written | $ | 153.2 | $ | 155.2 | $ | 642.0 | $ | 653.0 | ||||
| Earned Premiums | $ | 162.6 | $ | 169.2 | $ | 651.7 | $ | 688.2 | ||||
| Net Investment Income | 17.1 | 13.4 | 68.6 | 37.7 | ||||||||
| Change in Value of Alternative Energy Partnership Investments | (3.8) | — | (16.3) | — | ||||||||
| Other Income | — | — | — | 0.1 | ||||||||
| Total Revenues | 175.9 | 182.6 | 704.0 | 726.0 | ||||||||
| Incurred Losses and LAE related to: | ||||||||||||
| Current Year: | ||||||||||||
| Non-catastrophe Losses and LAE | 122.4 | 107.1 | 450.4 | 400.9 | ||||||||
| Catastrophe Losses and LAE | 7.5 | (5.3) | 79.1 | 82.0 | ||||||||
| Prior Years: | ||||||||||||
| Non-catastrophe Losses and LAE | 8.4 | 9.5 | 13.5 | 20.7 | ||||||||
| Catastrophe Losses and LAE | (2.0) | 0.1 | (5.6) | (0.5) | ||||||||
| Total Incurred Losses and LAE | 136.3 | 111.4 | 537.4 | 503.1 | ||||||||
| Insurance Expenses | 51.6 | 51.4 | 206.4 | 221.1 | ||||||||
| Operating Income (Loss) | (12.0) | 19.8 | (39.8) | 1.8 | ||||||||
| Income Tax Benefit (Expense) | 4.6 | (2.9) | 27.3 | 1.7 | ||||||||
| Segment Net Operating Income (Loss) | $ | (7.4) | $ | 16.9 | $ | (12.5) | $ | 3.5 | ||||
| Ratios Based On Earned Premiums | ||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 75.2 | % | 63.2 | % | 69.2 | % | 58.3 | % | ||||
| Current Year Catastrophe Losses and LAE Ratio | 4.6 | (3.1) | 12.1 | 11.9 | ||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 5.2 | 5.6 | 2.1 | 3.0 | ||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (1.2) | 0.1 | (0.9) | (0.1) | ||||||||
| Total Incurred Loss and LAE Ratio | 83.8 | 65.8 | 82.5 | 73.1 | ||||||||
| Insurance Expense Ratio | 31.7 | 30.4 | 31.7 | 32.1 | ||||||||
| Combined Ratio | 115.5 | % | 96.2 | % | 114.2 | % | 105.2 | % | ||||
| Underlying Combined Ratio1 | ||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 75.2 | % | 63.2 | % | 69.2 | % | 58.3 | % | ||||
| Insurance Expense Ratio | 31.7 | 30.4 | 31.7 | 32.1 | ||||||||
| Underlying Combined Ratio1 | 106.9 | % | 93.6 | % | 100.9 | % | 90.4 | % | ||||
| Non-GAAP Measure Reconciliation | ||||||||||||
| Combined Ratio | 115.5 | % | 96.2 | % | 114.2 | % | 105.2 | % | ||||
| Less: | ||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 4.6 | (3.1) | 12.1 | 11.9 | ||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 5.2 | 5.6 | 2.1 | 3.0 | ||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (1.2) | 0.1 | (0.9) | (0.1) | ||||||||
| Underlying Combined Ratio1 | 106.9 | % | 93.6 | % | 100.9 | % | 90.4 | % |
Unaudited selected financial information for the Life & Health Insurance segment follows.
| Three Months Ended | Year Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (Dollars in Millions) | Dec 31,<br>2021 | Dec 31,<br>2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||
| Results of Operations | ||||||||
| Earned Premiums | $ | 164.2 | $ | 162.4 | $ | 653.5 | $ | 648.7 |
| Net Investment Income | 50.8 | 52.8 | 202.7 | 198.8 | ||||
| Change in Value of Alternative Energy Partnership Investments | (3.7) | — | (15.8) | — | ||||
| Other Income (Loss) | (1.6) | — | (1.3) | 0.6 | ||||
| Total Revenues | 209.7 | 215.2 | 839.1 | 848.1 | ||||
| Policyholders’ Benefits and Incurred Losses and LAE | 116.2 | 121.8 | 469.7 | 442.0 | ||||
| Insurance Expenses | 89.5 | 83.8 | 358.9 | 334.9 | ||||
| Operating Income (Loss) | 4.0 | 9.6 | 10.5 | 71.2 | ||||
| Income Tax Benefit (Expense) | 1.1 | (0.2) | 17.7 | (11.2) | ||||
| Segment Net Operating Income (Loss) | $ | 5.1 | $ | 9.4 | $ | 28.2 | $ | 60.0 |
Use of Non-GAAP Financial Measures
Adjusted Consolidated Net Operating Income (Loss)1 is an after-tax, non-GAAP financial measure and is computed by excluding from Net Income (Loss) the after-tax impact of:
(i) Income (Loss) from Change in Fair Value of Equity and Convertible Securities;
(ii) Net Realized Gains or Losses on Sales of Investments;
(iii) Impairment Losses;
(iv) Acquisition Related Transaction, Integration and Other Costs;
(v) Debt Extinguishment, Pension and Other Charges; and
(vi) Significant non-recurring or infrequent items that may not be indicative of ongoing operations
Significant non-recurring items are excluded when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, and (b) there has been no similar charge or gain within the prior two years. The most directly comparable GAAP financial measure is Net Income (Loss). There were no applicable significant non-recurring items that Kemper excluded from the calculation of Adjusted Consolidated Net Operating Income (Loss)1 for the three and twelve months ended December 31, 2021 or 2020.
Kemper believes that Adjusted Consolidated Net Operating Income (Loss)1 provides investors with a valuable measure of its ongoing performance because it reveals underlying operational performance trends that otherwise might be less apparent if the items were not excluded. Income (Loss) from Change in Fair Value of Equity and Convertible Securities, Net Realized Gains or Losses on Sales of Investments and Impairment Losses related to investments included in Kemper’s results may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions that impact the values of the Kemper’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 Kemper’s financing and refinancing decisions and capital needs, as well as external economic developments such as debt market conditions, the timing of which is unrelated to the insurance underwriting process; (ii) settlement of pension plan obligations which are business decisions made by Kemper, the timing of which is unrelated to the underwriting process; and (iii) other charges that are non-standard, not part of the ordinary course of business, and unrelated to the insurance underwriting process. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Kemper’s business or economic trends. The preceding non-GAAP financial measures should not be considered a substitute for the comparable GAAP financial measures, as they do not fully recognize the overall profitability of the Kemper’s businesses.
A reconciliation of Net Income (Loss) to Adjusted Consolidated Net Operating Income (Loss) 1 for the three and twelve months ended December 31, 2021 and 2020 is presented below.
| Three Months Ended | Year Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (Dollars in Millions) (Unaudited) | Dec 31,<br>2021 | Dec 31,<br>2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||
| Net Income (Loss) | $ | (105.8) | $ | 97.5 | $ | (120.5) | $ | 409.9 |
| Less Net Income (Loss) From: | ||||||||
| Change in Fair Value of Equity and Convertible Securities | 17.5 | 57.8 | 90.5 | 57.0 | ||||
| Net Realized Gains on Sales of Investments | 17.2 | (0.1) | 51.2 | 30.1 | ||||
| Impairment Losses | (2.5) | 0.4 | (8.7) | (15.4) | ||||
| Acquisition Related Transaction, Integration and Other Costs | (7.2) | (15.8) | (34.7) | (50.0) | ||||
| Debt Extinguishment, Pension and Other Charges | — | (50.6) | — | (50.6) | ||||
| Adjusted Consolidated Net Operating Income (Loss) 1 | $ | (130.8) | $ | 105.8 | $ | (218.8) | $ | 438.8 |
Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share1 is a non-GAAP financial measure computed by dividing Adjusted Consolidated Net Operating Income (Loss)1 attributed to unrestricted shares by the weighted-average unrestricted shares and equivalent shares outstanding. The most directly comparable GAAP financial measure is Diluted Net Income (Loss) Per Unrestricted Share.
A reconciliation of Diluted Net Income (Loss) Per Unrestricted Share to Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share1 for the three and twelve months ended December 31, 2021 and 2020 is presented below.
| Three Months Ended | Year Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (Unaudited) | Dec 31,<br>2021 | Dec 31,<br>2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||
| Diluted Net Income (Loss) Per Unrestricted Share | $ | (1.66) | $ | 1.46 | $ | (1.87) | $ | 6.14 |
| Less Net Income (Loss) Per Unrestricted Share From: | ||||||||
| Change in Fair Value of Equity and Convertible Securities | 0.27 | 0.86 | 1.41 | 0.86 | ||||
| Net Realized Gains on Sales of Investments | 0.27 | — | 0.80 | 0.45 | ||||
| Impairment Losses | (0.04) | 0.01 | (0.14) | (0.23) | ||||
| Acquisition Related Transaction, Integration and Other Costs | (0.11) | (0.24) | (0.54) | (0.75) | ||||
| Debt Extinguishment, Pension and Other Charges | — | (0.76) | — | (0.76) | ||||
| Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share1 | $ | (2.05) | $ | 1.59 | $ | (3.40) | $ | 6.57 |
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1 is a calculation that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity after excluding the after-tax impact of net unrealized gains 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.
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, 2021 and December 31, 2020 is presented below.
| (Dollars in Millions) (Unaudited) | Dec 31,<br>2021 | Dec 31,<br>2020 | ||
|---|---|---|---|---|
| Shareholders’ Equity | $ | 4,007.7 | $ | 4,563.4 |
| Net Unrealized Gains on Fixed Maturities | 502.6 | 724.0 | ||
| Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities1 | $ | 3,505.1 | $ | 3,839.4 |
Underlying Combined Ratio1 is a non-GAAP financial measure. It is computed by adding the Current Year Non-catastrophe Losses and LAE Ratio with the Insurance Expense Ratio. The most directly comparable GAAP financial measure is the Combined Ratio, which is computed by adding Total Incurred Losses and LAE Ratio, including the impact of catastrophe losses and loss and LAE reserve development from prior years, with the Insurance Expense Ratio.
Kemper believes Underlying Losses and LAE and the Underlying Combined Ratio are useful to investors and uses these financial measures to reveal the trends in Kemper’s Property & Casualty Insurance segment that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses may cause the Kemper’s loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on incurred losses and LAE and the Combined Ratio. Prior-year reserve developments are caused by unexpected loss development on historical reserves. Because reserve development relates to the re-estimation of losses from earlier periods, it has no bearing on the performance of the Kemper’s insurance products in the current period. Kemper believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Kemper’s underwriting performance.
As Adjusted for Acquisitions1 amounts are non-GAAP financial measures. Subsequent to the applicable acquisitions, the As Adjusted for Acquisitions1 amounts are computed by subtracting the impact of purchase accounting adjustments from the comparable consolidated GAAP financial measure reported by Kemper. Kemper believes computing and presenting results on an adjusted basis are useful to investors and are used by management to provide meaningful and comparable year-over-year comparisons.
A reconciliation of the As Adjusted for Acquisitions1 non-GAAP financial measures used in this press release to the comparable GAAP financial measure for the three months ended December 31, 2021 is presented below.
| (Dollars in Millions, Except Per Share Amounts) (Unaudited) | Kemper Consolidated GAAP Financial Measure | Less Impact of Purchase Accounting Adjustments | As Adjusted for Acquisitions1 | |||
|---|---|---|---|---|---|---|
| Net Income (Loss) | $ | (105.8) | $ | (4.5) | $ | (101.3) |
| Net Income (Loss) Per Share - Diluted | $ | (1.66) | $ | (0.07) | $ | (1.59) |
| Specialty Property & Casualty Insurance Segment: | ||||||
| Earned Premiums | $ | 1,032.3 | $ | — | $ | 1,032.3 |
| Segment Net Operating Income (Loss) | $ | (125.2) | $ | (4.8) | $ | (120.4) |
| Specialty Personal Automobile Insurance: | ||||||
| Earned Premiums | $ | 918.1 | $ | — | $ | 918.1 |
| Segment Net Operating Income (Loss) | $ | (129.7) | $ | (4.5) | $ | (125.2) |
A reconciliation of the As Adjusted for Acquisitions1 non-GAAP financial measures used in this press release to the comparable GAAP financial measure for the three months ended December 31, 2020 is presented below.
| (Dollars in Millions, Except Per Share Amounts) (Unaudited) | Kemper Consolidated GAAP Financial Measure | AAC Historical GAAP Financial Measure | Less Impact of Purchase Accounting Adjustments | As Adjusted for Acquisitions1 | ||||
|---|---|---|---|---|---|---|---|---|
| Net Income (Loss) | $ | 97.5 | $ | 16.9 | $ | (3.2) | $ | 117.6 |
| Net Income (Loss) Per Share - Diluted | $ | 1.46 | $ | 0.25 | $ | (0.05) | $ | 1.76 |
| Specialty Property & Casualty Insurance Segment: | ||||||||
| Earned Premiums | $ | 882.4 | $ | 91.2 | $ | — | $ | 973.6 |
| Segment Net Operating Income (Loss) | $ | 91.1 | $ | 9.5 | $ | (3.6) | $ | 104.2 |
| Specialty Personal Automobile Insurance: | ||||||||
| Earned Premiums | $ | 796.1 | $ | 91.2 | $ | — | $ | 887.3 |
| Segment Net Operating Income (Loss) | $ | 77.4 | $ | 9.5 | $ | (2.8) | $ | 89.7 |
Conference Call
Kemper will host its conference call to discuss fourth quarter 2021 results on Monday, January 31st, at 5:00 p.m. Eastern (4:00 p.m. Central). The conference call will be accessible via the internet and by telephone at 844.200.6205, access code 863164. 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 2021, which is available at the investor section of kemper.com.
About Kemper
The Kemper family of companies is one of the nation’s leading specialized insurers. With approximately $15 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 6.5 million policies, is represented by approximately 35,400 agents and brokers, and has approximately 10,300 associates dedicated to meeting the ever-changing needs of its customers.
Learn more about Kemper at kemper.com.
Caution Regarding Forward-Looking Statements
This press release may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Such statements involve known and unknown risks, uncertainties, and other factors, including but not limited to:
•changes in the frequency and severity of insurance claims;
•claim development and the process of estimating claim reserves;
•the impacts of inflation;
•product demand and pricing;
•effects of governmental and regulatory actions;
•litigation outcomes;
•investment risks;
•cybersecurity risks;
•impact of catastrophes; and
•other risks and uncertainties detailed in Kemper’s Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission (“SEC”).
The COVID-19 outbreak and subsequent global pandemic (“Pandemic”) is an extraordinary catastrophe that creates unique uncertainties and risks. Kemper cannot provide any assurances as to the impacts of the Pandemic and related economic conditions on Kemper’s operating and financial results.
Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this press release, including any such statements related to the Pandemic.
| Contacts | |
|---|---|
| Investors: Karen Guerra | 312.661.4930 or investors@kemper.com |
| Media: Barbara Ciesemier | 312.661.4521 or bciesemier@kemper.com |
14
Document
Exhibit 99.2
Investor Supplement
Fourth Quarter 2021
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.
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. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Such statements involve known and unknown risks, uncertainties, and other factors, including but not limited to:
•changes in the frequency and severity of insurance claims;
•claim development and the process of estimating claim reserves;
•the impacts of inflation;
•product demand and pricing;
•effects of governmental and regulatory actions;
•litigation outcomes;
•investment risks;
•cybersecurity risks;
•impact of catastrophes; and
•other risks and uncertainties detailed in Kemper’s Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission (“SEC”).
The COVID-19 outbreak and subsequent global pandemic (“Pandemic”) is an extraordinary catastrophe that creates unique uncertainties and risks. Kemper cannot provide any assurances as to the impacts of the Pandemic and related economic conditions on Kemper’s operating and financial results.
Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this Investor Supplement, including any such statements related to the Pandemic.
Exhibit 99.2
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 Pages 34-35.
Kemper Corporation
Investor Supplement
Fourth Quarter 2021
Table of Contents
| Page | |
|---|---|
| Consolidated Financial Highlights | 3 |
| Consolidated Statements of Income | 4 |
| Consolidated Balance Sheets | 5 |
| Consolidated Statements of Cash Flows | 6-7 |
| Capital Metrics | 8-9 |
| Debt Outstanding, FHLB Advances and Ratings | 10 |
| Segment Summary Results: | |
| Revenues | 11 |
| Operating Income | 12 |
| Net Operating Income | 12 |
| Catastrophe Frequency and Severity | 13 |
| Specialty Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information | 14-15 |
| Specialty Personal Automobile Insurance | 16 |
| Commercial Automobile Insurance | 17 |
| Preferred Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information | 18-19 |
| Preferred Personal Automobile Insurance | 20 |
| Homeowners and Other Personal Insurance | 21 |
| Homeowners Insurance | 22 |
| Other Personal Insurance | 23 |
| Life & Health Insurance Segment - Results of Operations and Selected Financial Information | 24 |
| Life Insurance | 25 |
| Accident and Health Insurance | 25 |
| Property Insurance | 26 |
| Expenses | 27 |
| Details of Investment Performance | 28 |
| Details of Invested Assets | 29-30 |
| Investment Concentration | 31 |
| Municipal Bond Securities | 32 |
| Investments in Limited Liability Companies and Limited Partnerships | 33 |
| Definitions of Non-GAAP Financial Measures | 34-35 |
| As Adjusted for Acquisition | 36-39 |
Kemper Corporation
Consolidated Financial Highlights
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||
| For Period Ended | ||||||||||||||||||||||||||||
| Earned Premiums | $ | 1,359.1 | $ | 1,356.1 | $ | 1,337.7 | $ | 1,200.8 | $ | 1,214.0 | $ | 1,206.5 | $ | 1,085.3 | $ | 1,166.4 | $ | 5,253.7 | $ | 4,672.2 | ||||||||
| Net Investment Income | 108.4 | 101.9 | 113.9 | 103.1 | 102.7 | 92.1 | 67.8 | 85.6 | 427.3 | 348.2 | ||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (14.3) | (23.8) | (7.7) | (15.4) | — | — | — | — | (61.2) | — | ||||||||||||||||||
| Other Income | — | 1.5 | 1.8 | 1.5 | 1.9 | 0.9 | 1.5 | 90.3 | 4.8 | 94.6 | ||||||||||||||||||
| Income (Loss) from Change in Fair Value of Equity and Convertible Securities | 22.2 | (0.6) | 40.8 | 52.2 | 73.1 | 45.2 | 71.6 | (117.8) | 114.6 | 72.1 | ||||||||||||||||||
| Net Investment Gains (Loss) | 18.5 | 9.5 | 16.0 | 9.8 | 0.4 | 9.0 | 4.7 | 4.5 | 53.8 | 18.6 | ||||||||||||||||||
| Total Revenues | $ | 1,493.9 | $ | 1,444.6 | $ | 1,502.5 | $ | 1,352.0 | $ | 1,392.1 | $ | 1,353.7 | $ | 1,230.9 | $ | 1,229.0 | $ | 5,793.0 | $ | 5,205.7 | ||||||||
| Net Income (Loss) | $ | (105.8) | $ | (75.3) | $ | (62.6) | $ | 123.2 | $ | 97.5 | $ | 122.3 | $ | 126.1 | $ | 64.0 | $ | (120.5) | $ | 409.9 | ||||||||
| Adjusted Consolidated Net Operating Income (Loss) 1 | $ | (130.8) | $ | (75.8) | $ | (99.4) | $ | 87.2 | $ | 105.8 | $ | 90.9 | $ | 79.2 | $ | 162.9 | $ | (218.8) | $ | 438.8 | ||||||||
| Per Unrestricted Common Share Amounts: | ||||||||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||||||||
| Net Income (Loss) | $ | (1.66) | $ | (1.18) | $ | (0.97) | $ | 1.88 | $ | 1.49 | $ | 1.87 | $ | 1.93 | $ | 0.96 | $ | (1.87) | $ | 6.24 | ||||||||
| Adjusted Consolidated Net Operating Income (Loss) 1 | $ | (2.05) | $ | (1.19) | $ | (1.54) | $ | 1.33 | $ | 1.62 | $ | 1.39 | $ | 1.21 | $ | 2.45 | $ | (3.40) | $ | 6.68 | ||||||||
| Diluted: | ||||||||||||||||||||||||||||
| Net Income (Loss) | $ | (1.66) | $ | (1.18) | $ | (0.97) | $ | 1.85 | $ | 1.46 | $ | 1.83 | $ | 1.91 | $ | 0.95 | $ | (1.87) | $ | 6.14 | ||||||||
| Adjusted Consolidated Net Operating Income (Loss) 1 | $ | (2.05) | $ | (1.19) | $ | (1.54) | $ | 1.31 | $ | 1.59 | $ | 1.36 | $ | 1.20 | $ | 2.43 | $ | (3.40) | $ | 6.57 | ||||||||
| Dividends Paid to Shareholders Per Share | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 1.24 | $ | 1.20 | ||||||||
| At Period End | ||||||||||||||||||||||||||||
| Total Assets | $ | 14,916.5 | $ | 14,977.2 | $ | 14,950.7 | $ | 14,203.7 | $ | 14,341.9 | $ | 14,090.4 | $ | 13,489.4 | $ | 12,932.3 | ||||||||||||
| Insurance Reserves | $ | 6,313.6 | $ | 6,120.3 | $ | 5,982.4 | $ | 5,541.1 | $ | 5,510.0 | $ | 5,461.5 | $ | 5,375.0 | $ | 5,442.4 | ||||||||||||
| Debt | $ | 1,121.9 | $ | 1,122.1 | $ | 1,122.3 | $ | 1,122.6 | $ | 1,172.8 | $ | 1,173.0 | $ | 777.7 | $ | 778.1 | ||||||||||||
| Shareholders’ Equity | $ | 4,007.7 | $ | 4,151.2 | $ | 4,306.2 | $ | 4,339.1 | $ | 4,563.4 | $ | 4,347.5 | $ | 4,187.9 | $ | 3,760.8 | ||||||||||||
| Shareholders’ Equity Excluding Goodwill1,2 | $ | 2,695.7 | $ | 2,839.2 | $ | 2,994.3 | $ | 3,225.1 | $ | 3,449.4 | $ | 3,233.5 | $ | 3,073.9 | $ | 2,646.8 | ||||||||||||
| Common Shares Issued and Outstanding (In Millions) | 63.685 | 63.652 | 63.636 | 65.016 | 65.436 | 65.406 | 65.282 | 65.365 | ||||||||||||||||||||
| Book Value Per Share2 | $ | 62.93 | $ | 65.22 | $ | 67.67 | $ | 66.74 | $ | 69.74 | $ | 66.47 | $ | 64.15 | $ | 57.54 | ||||||||||||
| Book Value Per Share Excluding Goodwill1,2 | $ | 42.33 | $ | 44.61 | $ | 47.05 | $ | 49.60 | $ | 52.71 | $ | 49.44 | $ | 47.09 | $ | 40.49 | ||||||||||||
| Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1,2 | $ | 55.04 | $ | 56.94 | $ | 58.39 | $ | 60.00 | $ | 58.67 | $ | 56.63 | $ | 55.13 | $ | 53.53 | ||||||||||||
| Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities and Goodwill1,2 | $ | 34.44 | $ | 36.33 | $ | 37.77 | $ | 42.87 | $ | 41.65 | $ | 39.60 | $ | 38.07 | $ | 36.49 | ||||||||||||
| Debt to Total Capitalization2 | 21.9 | % | 21.3 | % | 20.7 | % | 20.6 | % | 20.4 | % | 21.2 | % | 15.7 | % | 17.1 | % | ||||||||||||
| Rolling 12 Months Return on 5-point Average Shareholders Equity2,3 | (2.8) | % | 1.9 | % | 6.4 | % | 11.1 | % | 9.8 | % | 10.8 | % | 11.4 | % | 11.8 | % | ||||||||||||
| 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. |
Kemper Corporation
Consolidated Statements of Income
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||
| Revenues: | ||||||||||||||||||||
| Earned Premiums | $ | 1,359.1 | $ | 1,356.1 | $ | 1,337.7 | $ | 1,200.8 | $ | 1,214.0 | $ | 1,206.5 | $ | 1,085.3 | $ | 1,166.4 | $ | 5,253.7 | $ | 4,672.2 |
| Net Investment Income | 108.4 | 101.9 | 113.9 | 103.1 | 102.7 | 92.1 | 67.8 | 85.6 | 427.3 | 348.2 | ||||||||||
| Change in Value of Alternative Energy Partnership Investments | (14.3) | (23.8) | (7.7) | (15.4) | — | — | — | — | (61.2) | — | ||||||||||
| Other Income | — | 1.5 | 1.8 | 1.5 | 1.9 | 0.9 | 1.5 | 90.3 | 4.8 | 94.6 | ||||||||||
| Income (Loss) from Change in Fair Value of Equity and Convertible Securities | 22.2 | (0.6) | 40.8 | 52.2 | 73.1 | 45.2 | 71.6 | (117.8) | 114.6 | 72.1 | ||||||||||
| Net Realized Gains (Losses) on Sales of Investments | 21.7 | 10.1 | 19.2 | 13.8 | (0.1) | 10.0 | 11.7 | 16.5 | 64.8 | 38.1 | ||||||||||
| Impairment Losses | (3.2) | (0.6) | (3.2) | (4.0) | 0.5 | (1.0) | (7.0) | (12.0) | (11.0) | (19.5) | ||||||||||
| Total Revenues | 1,493.9 | 1,444.6 | 1,502.5 | 1,352.0 | 1,392.1 | 1,353.7 | 1,230.9 | 1,229.0 | 5,793.0 | 5,205.7 | ||||||||||
| Expenses: | ||||||||||||||||||||
| Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses | 1,276.0 | 1,211.2 | 1,224.1 | 889.5 | 863.4 | 877.5 | 747.5 | 835.2 | 4,600.8 | 3,323.6 | ||||||||||
| Insurance Expenses | 309.1 | 311.3 | 314.0 | 283.7 | 279.3 | 276.9 | 272.7 | 271.6 | 1,218.1 | 1,100.5 | ||||||||||
| Interest and Other Expenses | 56.2 | 51.9 | 54.1 | 57.2 | 128.8 | 47.2 | 51.0 | 44.5 | 219.4 | 271.5 | ||||||||||
| Total Expenses | 1,641.3 | 1,574.4 | 1,592.2 | 1,230.4 | 1,271.5 | 1,201.6 | 1,071.2 | 1,151.3 | 6,038.3 | 4,695.6 | ||||||||||
| Income (Loss) before Income Taxes | (147.4) | (129.8) | (89.7) | 121.6 | 120.6 | 152.1 | 159.7 | 77.7 | (245.3) | 510.1 | ||||||||||
| Income Tax Benefit (Expense) | 41.6 | 54.5 | 27.1 | 1.6 | (23.1) | (29.8) | (33.6) | (13.7) | 124.8 | (100.2) | ||||||||||
| Net Income (Loss) | $ | (105.8) | $ | (75.3) | $ | (62.6) | $ | 123.2 | $ | 97.5 | $ | 122.3 | $ | 126.1 | $ | 64.0 | $ | (120.5) | $ | 409.9 |
| Income (Loss) Per Unrestricted Share: | ||||||||||||||||||||
| Basic | $ | (1.66) | $ | (1.18) | $ | (0.97) | $ | 1.88 | $ | 1.49 | $ | 1.87 | $ | 1.93 | $ | 0.96 | $ | (1.87) | $ | 6.24 |
| Diluted | $ | (1.66) | $ | (1.18) | $ | (0.97) | $ | 1.85 | $ | 1.46 | $ | 1.83 | $ | 1.91 | $ | 0.95 | $ | (1.87) | $ | 6.14 |
| Net Income (Loss) Per Unrestricted Share: | ||||||||||||||||||||
| Basic | $ | (1.66) | $ | (1.18) | $ | (0.97) | $ | 1.88 | $ | 1.49 | $ | 1.87 | $ | 1.93 | $ | 0.96 | $ | (1.87) | $ | 6.24 |
| Diluted | $ | (1.66) | $ | (1.18) | $ | (0.97) | $ | 1.85 | $ | 1.46 | $ | 1.83 | $ | 1.91 | $ | 0.95 | $ | (1.87) | $ | 6.14 |
| Dividends Paid to Shareholders Per Share | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 1.24 | $ | 1.20 |
| Weighted Average Unrestricted Common Shares Outstanding (in Millions) | 63.655 | 63.628 | 64.377 | 65.425 | 65.414 | 65.363 | 65.258 | 66.516 | 64.264 | 65.636 |
Kemper Corporation
Consolidated Balance Sheets
(Dollars in Millions)
(Unaudited)
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets: | ||||||||||||||||||||||||
| Investments: | ||||||||||||||||||||||||
| Fixed Maturities at Fair Value | $ | 7,986.9 | $ | 7,885.1 | $ | 7,835.0 | $ | 7,479.4 | $ | 7,605.9 | $ | 7,504.8 | $ | 7,480.4 | $ | 6,998.5 | ||||||||
| Equity Securities at Fair Value | 830.6 | 969.6 | 957.7 | 897.4 | 858.5 | 788.2 | 783.3 | 709.8 | ||||||||||||||||
| Equity Securities at Modified Cost | 32.3 | 33.0 | 32.5 | 36.0 | 40.1 | 48.4 | 48.1 | 44.8 | ||||||||||||||||
| Equity Method Limited Liability Investments | 241.9 | 255.1 | 245.5 | 219.2 | 204.0 | 206.2 | 209.9 | 226.3 | ||||||||||||||||
| Alternative Energy Partnerships | 39.6 | 54.2 | 46.6 | 54.4 | 21.3 | — | — | — | ||||||||||||||||
| Convertible Securities at Fair Value | 46.4 | 44.1 | 43.6 | 42.6 | 39.9 | 36.3 | 35.0 | 32.8 | ||||||||||||||||
| Short-term Investments at Cost which Approximates Fair Value | 284.1 | 259.7 | 370.6 | 196.9 | 875.4 | 628.8 | 154.2 | 166.7 | ||||||||||||||||
| Other Investments | 925.6 | 921.5 | 910.8 | 896.8 | 779.0 | 762.8 | 757.5 | 760.2 | ||||||||||||||||
| Total Investments | 10,387.4 | 10,422.3 | 10,442.3 | 9,822.7 | 10,424.1 | 9,975.5 | 9,468.4 | 8,939.1 | ||||||||||||||||
| Cash | 148.2 | 119.8 | 105.1 | 547.4 | 206.1 | 352.2 | 389.3 | 301.3 | ||||||||||||||||
| Receivables from Policyholders | 1,418.7 | 1,481.2 | 1,479.9 | 1,260.9 | 1,194.5 | 1,249.3 | 1,165.3 | 1,219.1 | ||||||||||||||||
| Other Receivables | 207.3 | 207.3 | 214.9 | 225.4 | 222.4 | 214.0 | 207.1 | 207.8 | ||||||||||||||||
| Deferred Policy Acquisition Costs | 677.6 | 676.6 | 652.7 | 611.7 | 589.3 | 578.2 | 560.8 | 551.5 | ||||||||||||||||
| Goodwill | 1,312.0 | 1,312.0 | 1,311.9 | 1,114.0 | 1,114.0 | 1,114.0 | 1,114.0 | 1,114.0 | ||||||||||||||||
| Current Income Tax Assets | 173.1 | 138.7 | 94.2 | 65.6 | 15.6 | 33.1 | 3.5 | 17.8 | ||||||||||||||||
| Other Assets | 592.2 | 619.3 | 649.7 | 556.0 | 575.9 | 574.1 | 581.0 | 581.7 | ||||||||||||||||
| Total Assets | $ | 14,916.5 | $ | 14,977.2 | $ | 14,950.7 | $ | 14,203.7 | $ | 14,341.9 | $ | 14,090.4 | $ | 13,489.4 | $ | 12,932.3 | ||||||||
| Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||
| Insurance Reserves: | ||||||||||||||||||||||||
| Life and Health | $ | 3,540.9 | $ | 3,524.1 | $ | 3,551.6 | $ | 3,541.6 | $ | 3,527.5 | $ | 3,511.5 | $ | 3,497.7 | $ | 3,500.8 | ||||||||
| Property and Casualty | 2,772.7 | 2,596.2 | 2,430.8 | 1,999.5 | 1,982.5 | 1,950.0 | 1,877.3 | 1,941.6 | ||||||||||||||||
| Total Insurance Reserves | 6,313.6 | 6,120.3 | 5,982.4 | 5,541.1 | 5,510.0 | 5,461.5 | 5,375.0 | 5,442.4 | ||||||||||||||||
| Unearned Premiums | 1,898.7 | 1,965.7 | 1,968.1 | 1,713.0 | 1,615.1 | 1,681.6 | 1,642.6 | 1,621.4 | ||||||||||||||||
| Policyholder Contract Liabilities | 504.0 | 481.8 | 442.7 | 466.5 | 467.0 | 503.7 | 520.3 | 430.5 | ||||||||||||||||
| Deferred Income Tax Liabilities | 227.0 | 242.4 | 269.6 | 227.6 | 285.7 | 245.5 | 226.8 | 116.0 | ||||||||||||||||
| Accrued Expenses and Other Liabilities | 843.6 | 893.7 | 859.4 | 793.8 | 727.9 | 677.6 | 759.1 | 783.1 | ||||||||||||||||
| Long-term Debt, Current and Non-current, at Amortized Cost | 1,121.9 | 1,122.1 | 1,122.3 | 1,122.6 | 1,172.8 | 1,173.0 | 777.7 | 778.1 | ||||||||||||||||
| Total Liabilities | 10,908.8 | 10,826.0 | 10,644.5 | 9,864.6 | 9,778.5 | 9,742.9 | 9,301.5 | 9,171.5 | ||||||||||||||||
| Shareholders’ Equity: | ||||||||||||||||||||||||
| Common Stock | 6.4 | 6.4 | 6.4 | 6.5 | 6.5 | 6.5 | 6.5 | 6.5 | ||||||||||||||||
| Paid-in Capital | 1,790.7 | 1,777.0 | 1,770.9 | 1,802.1 | 1,805.2 | 1,798.5 | 1,792.5 | 1,788.2 | ||||||||||||||||
| Retained Earnings | 1,762.5 | 1,888.4 | 1,985.9 | 2,140.0 | 2,071.2 | 1,993.5 | 1,891.6 | 1,791.2 | ||||||||||||||||
| Accumulated Other Comprehensive Income | 448.1 | 479.4 | 543.0 | 390.5 | 680.5 | 549.0 | 497.3 | 174.9 | ||||||||||||||||
| Total Shareholders’ Equity | 4,007.7 | 4,151.2 | 4,306.2 | 4,339.1 | 4,563.4 | 4,347.5 | 4,187.9 | 3,760.8 | ||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 14,916.5 | $ | 14,977.2 | $ | 14,950.7 | $ | 14,203.7 | $ | 14,341.9 | $ | 14,090.4 | $ | 13,489.4 | $ | 12,932.3 | ||||||||
| Kemper Corporation<br><br>Consolidated Statements of Cash Flows<br><br>(Dollars in Millions)<br><br>(Unaudited) | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | ||||||||||||||||||||
| Year Ended | ||||||||||||||||||||||||
| Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||||
| Cash Flows from Operating Activities: | ||||||||||||||||||||||||
| Net Income (Loss) | $ | (120.5) | $ | 409.9 | ||||||||||||||||||||
| Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: | ||||||||||||||||||||||||
| Net Realized Investment (Gains) Losses | (64.8) | (38.1) | ||||||||||||||||||||||
| Impairment Losses | 11.0 | 19.5 | ||||||||||||||||||||||
| Depreciation and Amortization of Property, Equipment and Software | 46.3 | 36.2 | ||||||||||||||||||||||
| Amortization of Intangibles Assets Acquired | 53.5 | 18.8 | ||||||||||||||||||||||
| Settlement Costs Related to Defined Benefit Pension Plan | — | 64.1 | ||||||||||||||||||||||
| Change in Accumulated Undistributed Earnings of Equity Method Limited Liability Investments | (33.5) | (4.0) | ||||||||||||||||||||||
| Loss from Alternative Energy Partnership Investments | 61.2 | — | ||||||||||||||||||||||
| (Increase) Decrease in Value of Equity and Convertible Securities | (114.6) | (72.1) | ||||||||||||||||||||||
| Changes in: | ||||||||||||||||||||||||
| Receivables from Policyholders | (75.2) | (77.4) | ||||||||||||||||||||||
| Reinsurance Recoverables | 20.6 | 16.8 | ||||||||||||||||||||||
| Deferred Policy Acquisition Costs | (88.3) | (52.3) | ||||||||||||||||||||||
| Insurance Reserves | 623.1 | 38.3 | ||||||||||||||||||||||
| Unearned Premiums | 105.9 | 69.6 | ||||||||||||||||||||||
| Income Taxes | (163.1) | 46.5 | ||||||||||||||||||||||
| Other Assets and Liabilities | 89.1 | (27.8) | ||||||||||||||||||||||
| Net Cash Provided by Operating Activities | 350.7 | 448.0 | ||||||||||||||||||||||
| Kemper Corporation<br><br>Consolidated Statements of Cash Flows<br><br>(Dollars in Millions)<br><br>(Unaudited) | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | ||||||||||||||||||||
| Year Ended | ||||||||||||||||||||||||
| Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||||
| Net Cash Provided by Operating Activities (Carryforward from page 6) | $ | 350.7 | $ | 448.0 | ||||||||||||||||||||
| Cash Flows from Investing Activities: | ||||||||||||||||||||||||
| Proceeds from Sales, Calls, and Maturities of Fixed Maturities | 1,388.9 | 972.4 | ||||||||||||||||||||||
| Proceeds from the Sales of Investments: | ||||||||||||||||||||||||
| Equity Securities | 316.6 | 434.4 | ||||||||||||||||||||||
| Real Estate Investments | 8.0 | 5.4 | ||||||||||||||||||||||
| Mortgage Loans | 70.8 | 25.5 | ||||||||||||||||||||||
| Other Investments | 47.5 | 45.2 | ||||||||||||||||||||||
| Purchases of Investments: | ||||||||||||||||||||||||
| Fixed Maturities | (1,825.4) | (1,293.3) | ||||||||||||||||||||||
| Equity Securities | (124.3) | (319.1) | ||||||||||||||||||||||
| Real Estate Investments | (5.1) | (0.5) | ||||||||||||||||||||||
| Corporate-Owned Life Insurance | (100.0) | (100.0) | ||||||||||||||||||||||
| Mortgage Loans | (119.9) | (52.7) | ||||||||||||||||||||||
| Other Investments | (104.9) | (43.5) | ||||||||||||||||||||||
| Net Sales (Purchases) of Short-term Investments | 687.2 | (390.8) | ||||||||||||||||||||||
| Acquisition of Business, Net of Cash Acquired | (316.6) | — | ||||||||||||||||||||||
| Acquisition of Software and Long-lived Assets | (57.8) | (53.4) | ||||||||||||||||||||||
| Other | 16.8 | 13.4 | ||||||||||||||||||||||
| Net Cash Provided (Used In) by Investing Activities | (118.2) | (757.0) | ||||||||||||||||||||||
| Cash Flows from Financing Activities: | ||||||||||||||||||||||||
| Repayment of Long-Term Debt | (50.0) | — | ||||||||||||||||||||||
| Net Proceeds from Issuance of Long-term Debt | — | 395.6 | ||||||||||||||||||||||
| Proceeds from Policyholder Contract Obligations | 386.8 | 467.0 | ||||||||||||||||||||||
| Repayment of Policyholder Contract Obligations | (394.0) | (304.8) | ||||||||||||||||||||||
| Proceeds from Shares Issued under Employee Stock Purchase Plan | 5.4 | 4.4 | ||||||||||||||||||||||
| Common Stock Repurchases | (161.7) | (110.4) | ||||||||||||||||||||||
| Dividends and Dividend Equivalents Paid | (80.6) | (78.9) | ||||||||||||||||||||||
| Other | 3.7 | 5.4 | ||||||||||||||||||||||
| Net Cash Provided by (Used In) Financing Activities | (290.4) | 378.3 | ||||||||||||||||||||||
| Increase (Decrease) in Cash | (57.9) | 69.3 | ||||||||||||||||||||||
| Cash, Beginning of Year | 206.1 | 136.8 | ||||||||||||||||||||||
| Cash, End of Period | $ | 148.2 | $ | 206.1 | ||||||||||||||||||||
| Kemper Corporation<br><br>Capital Metrics<br><br>(Dollars and Shares in Millions, Except Per Share Amounts)<br><br>(Unaudited) | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||||||||||||
| Book Value Per Share | ||||||||||||||||||||||||
| Numerator | ||||||||||||||||||||||||
| Shareholders’ Equity | $ | 4,007.7 | $ | 4,151.2 | $ | 4,306.2 | $ | 4,339.1 | $ | 4,563.4 | $ | 4,347.5 | $ | 4,187.9 | $ | 3,760.8 | ||||||||
| Less: Goodwill | (1,312.0) | (1,312.0) | (1,311.9) | (1,114.0) | (1,114.0) | (1,114.0) | (1,114.0) | (1,114.0) | ||||||||||||||||
| Shareholders’ Equity Excluding Goodwill1 | $ | 2,695.7 | $ | 2,839.2 | $ | 2,994.3 | $ | 3,225.1 | $ | 3,449.4 | $ | 3,233.5 | $ | 3,073.9 | $ | 2,646.8 | ||||||||
| Shareholders’ Equity | $ | 4,007.7 | $ | 4,151.2 | $ | 4,306.2 | $ | 4,339.1 | $ | 4,563.4 | $ | 4,347.5 | $ | 4,187.9 | $ | 3,760.8 | ||||||||
| Less: Net Unrealized Gains on Fixed Maturities | (502.6) | (526.9) | (590.5) | (438.0) | (724.0) | (643.7) | (588.6) | (261.6) | ||||||||||||||||
| Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities1 | $ | 3,505.1 | $ | 3,624.3 | $ | 3,715.7 | $ | 3,901.1 | $ | 3,839.4 | $ | 3,703.8 | $ | 3,599.3 | $ | 3,499.2 | ||||||||
| Less: Goodwill | (1,312.0) | (1,312.0) | (1,311.9) | (1,114.0) | (1,114.0) | (1,114.0) | (1,114.0) | (1,114.0) | ||||||||||||||||
| Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities and Goodwill1 | $ | 2,193.1 | $ | 2,312.3 | $ | 2,403.8 | $ | 2,787.1 | $ | 2,725.4 | $ | 2,589.8 | $ | 2,485.3 | $ | 2,385.2 | ||||||||
| Denominator | ||||||||||||||||||||||||
| Common Shares Issued and Outstanding | 63.685 | 63.652 | 63.636 | 65.016 | 65.436 | 65.406 | 65.282 | 65.365 | ||||||||||||||||
| Book Value Per Share | $ | 62.93 | $ | 65.22 | $ | 67.67 | $ | 66.74 | $ | 69.74 | $ | 66.47 | $ | 64.15 | $ | 57.54 | ||||||||
| Book Value Per Share Excluding Goodwill1 | $ | 42.33 | $ | 44.61 | $ | 47.05 | $ | 49.60 | $ | 52.71 | $ | 49.44 | $ | 47.09 | $ | 40.49 | ||||||||
| Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1 | $ | 55.04 | $ | 56.94 | $ | 58.39 | $ | 60.00 | $ | 58.67 | $ | 56.63 | $ | 55.13 | $ | 53.53 | ||||||||
| Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities and Goodwill1 | $ | 34.44 | $ | 36.33 | $ | 37.77 | $ | 42.87 | $ | 41.65 | $ | 39.60 | $ | 38.07 | $ | 36.49 | ||||||||
| Return on Shareholders’ Equity | ||||||||||||||||||||||||
| Numerator | ||||||||||||||||||||||||
| Rolling 12 Months Net Income | $ | (120.5) | $ | 82.8 | $ | 280.4 | $ | 469.1 | $ | 409.9 | $ | 437.1 | $ | 443.8 | $ | 439.8 | ||||||||
| Denominator (5-point Average) | ||||||||||||||||||||||||
| 5-point Average Shareholders’ Equity | $ | 4,273.5 | $ | 4,341.5 | $ | 4,348.8 | $ | 4,239.7 | $ | 4,166.4 | $ | 4,032.5 | $ | 3,899.8 | $ | 3,726.2 | ||||||||
| Rolling 12 Months Return on Average Shareholders' Equity (5-point Average) | (2.8) | % | 1.9 | % | 6.4 | % | 11.1 | % | 9.8 | % | 10.8 | % | 11.4 | % | 11.8 | % | ||||||||
| Return on Shareholders’ Equity Excluding Goodwill1 | ||||||||||||||||||||||||
| Denominator (5-point Average) | ||||||||||||||||||||||||
| 5-point Average Shareholders’ Equity Excluding Goodwill1 | $ | 3,040.7 | $ | 3,148.3 | $ | 3,195.2 | $ | 3,125.7 | $ | 3,052.4 | $ | 2,918.5 | $ | 2,785.8 | $ | 2,612.7 | ||||||||
| Rolling 12 Months Return on Average Shareholders' Equity Excluding Goodwill (5-point Average)1 | (4.0) | % | 2.6 | % | 8.8 | % | 15.0 | % | 13.4 | % | 15.0 | % | 15.9 | % | 16.8 | % | ||||||||
| 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 | $ | 3,717.1 | $ | 3,756.8 | $ | 3,751.8 | $ | 3,708.5 | $ | 3,636.0 | $ | 3,554.7 | $ | 3,477.1 | $ | 3,372.9 | ||||||||
| Rolling 12 Months Return on Average Shareholders' Equity Excluding Net Unrealized Gains on Fixed Maturities (5-point Average)1 | (3.2) | % | 2.2 | % | 7.5 | % | 12.6 | % | 11.3 | % | 12.3 | % | 12.8 | % | 13.0 | % | ||||||||
| 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 | $ | 2,484.3 | $ | 2,563.7 | $ | 2,598.3 | $ | 2,594.5 | $ | 2,522.0 | $ | 2,440.7 | $ | 2,363.1 | $ | 2,259.4 | ||||||||
| Rolling 12 Months Return on Average Shareholders' Equity Excluding Net Unrealized Gains on Fixed Maturities and Goodwill (5-point Average)1 | (4.9) | % | 3.2 | % | 10.8 | % | 18.1 | % | 16.3 | % | 17.9 | % | 18.8 | % | 19.5 | % | ||||||||
| 1 Non-GAAP financial measure. See definitions beginning on page 34. | ||||||||||||||||||||||||
| Kemper Corporation<br><br>Capital Metrics<br><br>(Dollars and Shares in Millions, Except Per Share Amounts)<br><br>(Unaudited) | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||||||||||||
| Debt and Total Capitalization | ||||||||||||||||||||||||
| Debt | $ | 1,121.9 | $ | 1,122.1 | $ | 1,122.3 | $ | 1,122.6 | $ | 1,172.8 | $ | 1,173.0 | $ | 777.7 | $ | 778.1 | ||||||||
| Shareholders’ Equity | 4,007.7 | 4,151.2 | 4,306.2 | 4,339.1 | 4,563.4 | 4,347.5 | 4,187.9 | 3,760.8 | ||||||||||||||||
| Total Capitalization | $ | 5,129.6 | $ | 5,273.3 | $ | 5,428.5 | $ | 5,461.7 | $ | 5,736.2 | $ | 5,520.5 | $ | 4,965.6 | $ | 4,538.9 | ||||||||
| Ratio of Debt to Shareholders’ Equity | 28.0 | % | 27.0 | % | 26.1 | % | 25.9 | % | 25.7 | % | 27.0 | % | 18.6 | % | 20.7 | % | ||||||||
| Ratio of Debt to Total Capitalization | 21.9 | % | 21.3 | % | 20.7 | % | 20.6 | % | 20.4 | % | 21.2 | % | 15.7 | % | 17.1 | % | ||||||||
| Parent Company Liquidity | ||||||||||||||||||||||||
| Kemper Holding Company Cash and Investments1 | $ | 233.9 | $ | 330.6 | $ | 214.8 | $ | 607.1 | $ | 733.2 | $ | 738.7 | $ | 270.5 | $ | 199.1 | ||||||||
| Borrowings Available Under Credit Agreement | 400.0 | 400.0 | 400.0 | 400.0 | 400.0 | 400.0 | 400.0 | 400.0 | ||||||||||||||||
| Parent Company Liquidity | $ | 633.9 | $ | 730.6 | $ | 614.8 | $ | 1,007.1 | $ | 1,133.2 | $ | 1,138.7 | $ | 670.5 | $ | 599.1 | ||||||||
| Capital Returned to Shareholders | ||||||||||||||||||||||||
| Cash Dividends Paid 2 | $ | 19.9 | $ | 19.7 | $ | 20.4 | $ | 21.0 | $ | 19.7 | $ | 19.7 | $ | 19.7 | $ | 20.0 | ||||||||
| 1 Includes Kemper's direct non-insurance subsidiaries | ||||||||||||||||||||||||
| 2 Three Months Ended |
Kemper Corporation
Debt Outstanding, FHLB Advances and Ratings
(Dollars in Millions)
(Unaudited)
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Kemper Corporation: | ||||||||||||||||
| Term Loan due July 5, 2023 | — | — | — | — | 49.9 | 49.9 | 49.9 | 49.9 | ||||||||
| Senior Notes at Amortized Cost: | ||||||||||||||||
| 5.000% Senior Notes due September 19, 2022 | 276.7 | 277.1 | 277.6 | 277.9 | 278.3 | 278.7 | 279.1 | 279.6 | ||||||||
| 4.350% Senior Notes due February 15, 2025 | 449.0 | 448.9 | 448.8 | 448.9 | 448.8 | 448.8 | 448.7 | 448.6 | ||||||||
| 2.400% Senior Notes due September 30, 2030 | 396.2 | 396.1 | 395.9 | 395.8 | 395.8 | 395.6 | — | — | ||||||||
| Long-term Debt Outstanding | $ | 1,121.9 | $ | 1,122.1 | $ | 1,122.3 | $ | 1,122.6 | $ | 1,172.8 | $ | 1,173.0 | $ | 777.7 | $ | 778.1 |
| Federal Home Loan Bank Advances to Insurance Subsidiaries: | ||||||||||||||||
| Reported as Policyholder Contract Liabilities: | ||||||||||||||||
| Federal Home Loan Bank of Chicago | $ | 401.9 | $ | 378.9 | $ | 382.8 | $ | 407.5 | $ | 407.8 | $ | 444.1 | $ | 454.3 | $ | 364.2 |
| 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. Best | Moody’s | S&P | Fitch | |||||||||||||
| As of Date of Financial Supplement | ||||||||||||||||
| Kemper Debt Ratings: | ||||||||||||||||
| Senior Unsecured Debt | BBB | Baa3 | BBB | BBB | ||||||||||||
| Insurance Company Financial Strength Ratings: | ||||||||||||||||
| Trinity Universal Insurance Company | A | A3 | A | A | ||||||||||||
| United Insurance Company of America | A | A3 | A- | A- | ||||||||||||
| Reserve National Insurance Company | A | NR | NR | NR | ||||||||||||
| Infinity Insurance Company | A | A3 | A | NR |
NR - Not Rated
Kemper Corporation
Segment Revenues
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||
| Revenues: | ||||||||||||||||||||
| Specialty Property & Casualty Insurance: | ||||||||||||||||||||
| Earned Premiums: | ||||||||||||||||||||
| Specialty Automobile | $ | 918.1 | $ | 920.6 | $ | 909.6 | $ | 785.4 | $ | 796.1 | $ | 792.2 | $ | 689.8 | $ | 753.2 | $ | 3,533.7 | $ | 3,031.3 |
| Commercial Automobile | 114.2 | 107.7 | 100.7 | 92.2 | 86.3 | 79.2 | 69.2 | 69.3 | 414.8 | 304.0 | ||||||||||
| Total Specialty Property & Casualty Insurance Earned Premiums | 1,032.3 | 1,028.3 | 1,010.3 | 877.6 | 882.4 | 871.4 | 759.0 | 822.5 | 3,948.5 | 3,335.3 | ||||||||||
| Net Investment Income | 37.8 | 37.0 | 42.7 | 35.0 | 37.9 | 30.5 | 16.9 | 28.8 | 152.5 | 114.1 | ||||||||||
| Change in Value of Alternative Energy Partnership Investments | (6.7) | (11.3) | (3.7) | (7.3) | — | — | — | — | (29.0) | — | ||||||||||
| Other Income | 1.0 | 1.2 | 1.0 | 0.9 | 0.4 | 0.4 | 0.1 | 0.9 | 4.1 | 1.8 | ||||||||||
| Total Specialty Property & Casualty Insurance Revenues | 1,064.4 | 1,055.2 | 1,050.3 | 906.2 | 920.7 | 902.3 | 776.0 | 852.2 | 4,076.1 | 3,451.2 | ||||||||||
| Preferred Property & Casualty Insurance: | ||||||||||||||||||||
| Earned Premiums: | ||||||||||||||||||||
| Preferred Automobile | 101.4 | 102.6 | 103.5 | 103.0 | 107.1 | 110.6 | 99.1 | 114.9 | 410.5 | 431.7 | ||||||||||
| Homeowners | 52.7 | 52.5 | 51.3 | 50.8 | 53.3 | 55.0 | 55.6 | 56.8 | 207.3 | 220.7 | ||||||||||
| Other Personal | 8.5 | 8.6 | 8.4 | 8.4 | 8.8 | 8.9 | 8.9 | 9.2 | 33.9 | 35.8 | ||||||||||
| Total Preferred Property & Casualty Insurance Earned Premiums | 162.6 | 163.7 | 163.2 | 162.2 | 169.2 | 174.5 | 163.6 | 180.9 | 651.7 | 688.2 | ||||||||||
| Net Investment Income | 17.1 | 16.1 | 19.5 | 15.9 | 13.4 | 10.3 | 4.3 | 9.7 | 68.6 | 37.7 | ||||||||||
| Change in Value of Alternative Energy Partnership Investments | (3.8) | (6.4) | (2.0) | (4.1) | — | — | — | — | (16.3) | — | ||||||||||
| Other Income | — | — | — | — | — | — | 0.1 | — | — | 0.1 | ||||||||||
| Total Preferred Property & Casualty Insurance Revenues | 175.9 | 173.4 | 180.7 | 174.0 | 182.6 | 184.8 | 168.0 | 190.6 | 704.0 | 726.0 | ||||||||||
| Life & Health Insurance: | ||||||||||||||||||||
| Earned Premiums: | ||||||||||||||||||||
| Life | 101.5 | 101.5 | 100.6 | 98.1 | 96.5 | 96.3 | 95.7 | 97.2 | 401.7 | 385.7 | ||||||||||
| Accident and Health | 47.6 | 47.0 | 47.9 | 47.4 | 50.2 | 48.9 | 50.8 | 49.4 | 189.9 | 199.3 | ||||||||||
| Property | 15.1 | 15.6 | 15.7 | 15.5 | 15.7 | 15.4 | 16.2 | 16.4 | 61.9 | 63.7 | ||||||||||
| Total Life & Health Insurance Earned Premiums | 164.2 | 164.1 | 164.2 | 161.0 | 162.4 | 160.6 | 162.7 | 163.0 | 653.5 | 648.7 | ||||||||||
| Net Investment Income | 50.8 | 48.4 | 52.4 | 51.1 | 52.8 | 50.7 | 44.3 | 51.0 | 202.7 | 198.8 | ||||||||||
| Change in Value of Alternative Energy Partnership Investments | (3.7) | (6.1) | (2.0) | (4.0) | — | — | — | — | (15.8) | — | ||||||||||
| Other Income | (1.6) | 0.1 | 0.1 | 0.1 | — | — | 0.5 | 0.1 | (1.3) | 0.6 | ||||||||||
| Total Life & Health Insurance Revenues | 209.7 | 206.5 | 214.7 | 208.2 | 215.2 | 211.3 | 207.5 | 214.1 | 839.1 | 848.1 | ||||||||||
| Total Segment Revenues | 1,450.0 | 1,435.1 | 1,445.7 | 1,288.4 | 1,318.5 | 1,298.4 | 1,151.5 | 1,256.9 | 5,619.2 | 5,025.3 | ||||||||||
| Income (Loss) from Change in Fair Value of Equity and Convertible Securities | 22.2 | (0.6) | 40.8 | 52.2 | 73.1 | 45.2 | 71.6 | (117.8) | 114.6 | 72.1 | ||||||||||
| Net Realized Gains (Losses) on Sales of Investments | 21.7 | 10.1 | 19.2 | 13.8 | (0.1) | 10.0 | 11.7 | 16.5 | 64.8 | 38.1 | ||||||||||
| Impairment Losses | (3.2) | (0.6) | (3.2) | (4.0) | 0.5 | (1.0) | (7.0) | (12.0) | (11.0) | (19.5) | ||||||||||
| Other | 3.2 | 0.6 | — | 1.6 | 0.1 | 1.1 | 3.1 | 85.4 | 5.4 | 89.7 | ||||||||||
| Total Revenues | $ | 1,493.9 | $ | 1,444.6 | $ | 1,502.5 | $ | 1,352.0 | $ | 1,392.1 | $ | 1,353.7 | $ | 1,230.9 | $ | 1,229.0 | $ | 5,793.0 | $ | 5,205.7 |
Kemper Corporation
Segment Operating Results
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||
| Segment Operating Income (Loss): | ||||||||||||||||||||
| Specialty Property & Casualty Insurance | $ | (163.4) | $ | (91.8) | $ | (122.1) | $ | 85.2 | $ | 111.5 | $ | 149.9 | $ | 84.5 | $ | 75.0 | $ | (292.1) | $ | 420.9 |
| Preferred Property & Casualty Insurance | (12.0) | (17.4) | (13.4) | 3.0 | 19.8 | (41.8) | 0.8 | 23.0 | (39.8) | 1.8 | ||||||||||
| Life & Health Insurance | 4.0 | (5.9) | 13.2 | (0.8) | 9.6 | 15.2 | 19.9 | 26.5 | 10.5 | 71.2 | ||||||||||
| Total Segment Operating Income (Loss) | (171.4) | (115.1) | (122.3) | 87.4 | 140.9 | 123.3 | 105.2 | 124.5 | (321.4) | 493.9 | ||||||||||
| Partial Satisfaction of Judgment | — | — | — | — | — | — | — | 89.4 | — | 89.4 | ||||||||||
| Other | (7.6) | (15.5) | (13.8) | (11.5) | (9.7) | (11.0) | (4.7) | (11.1) | (48.4) | (36.5) | ||||||||||
| Corporate and Other Operating Income (Loss) | (7.6) | (15.5) | (13.8) | (11.5) | (9.7) | (11.0) | (4.7) | 78.3 | (48.4) | 52.9 | ||||||||||
| Total Operating Income (Loss) | (179.0) | (130.6) | (136.1) | 75.9 | 131.2 | 112.3 | 100.5 | 202.8 | (369.8) | 546.8 | ||||||||||
| Income From: | ||||||||||||||||||||
| Change in Fair Value of Equity and Convertible Securities | 22.2 | (0.6) | 40.8 | 52.2 | 73.1 | 45.2 | 71.6 | (117.8) | 114.6 | 72.1 | ||||||||||
| Net Realized Gains (Losses) on Sales of Investments | 21.7 | 10.1 | 19.2 | 13.8 | (0.1) | 10.0 | 11.7 | 16.5 | 64.8 | 38.1 | ||||||||||
| Impairment Losses | (3.2) | (0.6) | (3.2) | (4.0) | 0.5 | (1.0) | (7.0) | (12.0) | (11.0) | (19.5) | ||||||||||
| Acquisition Related Transaction, Integration and Other Costs | (9.1) | (8.1) | (10.4) | (16.3) | (20.0) | (14.4) | (17.1) | (11.8) | (43.9) | (63.3) | ||||||||||
| Debt Extinguishment, Pension and Other Charges | — | — | — | — | (64.1) | — | — | — | — | (64.1) | ||||||||||
| Income (Loss) before Income Taxes | $ | (147.4) | $ | (129.8) | $ | (89.7) | $ | 121.6 | $ | 120.6 | $ | 152.1 | $ | 159.7 | $ | 77.7 | $ | (245.3) | $ | 510.1 |
| Segment Net Operating Income (Loss): | ||||||||||||||||||||
| Specialty Property & Casualty Insurance | $ | (125.2) | $ | (59.3) | $ | (91.7) | $ | 80.1 | $ | 91.1 | $ | 119.2 | $ | 67.5 | $ | 60.1 | $ | (196.1) | $ | 337.9 |
| Preferred Property & Casualty Insurance | (7.4) | (6.4) | (8.3) | 9.6 | 16.9 | (32.7) | 0.9 | 18.4 | (12.5) | 3.5 | ||||||||||
| Life & Health Insurance | 5.1 | 2.8 | 13.0 | 7.3 | 9.4 | 12.2 | 16.1 | 22.3 | 28.2 | 60.0 | ||||||||||
| Total Segment Net Operating Income (Loss) | (127.5) | (62.9) | (87.0) | 97.0 | 117.4 | 98.7 | 84.5 | 100.8 | (180.4) | 401.4 | ||||||||||
| Corporate and Other Net Operating Income (Loss) From: | ||||||||||||||||||||
| Partial Satisfaction of Legal Judgment | — | — | — | — | — | — | — | 70.6 | — | 70.6 | ||||||||||
| Other | (3.3) | (12.9) | (12.4) | (9.8) | (11.6) | (7.8) | (5.3) | (8.5) | (38.4) | (33.2) | ||||||||||
| Corporate and Other Net Operating Income (Loss) | (3.3) | (12.9) | (12.4) | (9.8) | (11.6) | (7.8) | (5.3) | 62.1 | (38.4) | 37.4 | ||||||||||
| Adjusted Consolidated Net Operating Income (Loss) | (130.8) | (75.8) | (99.4) | 87.2 | 105.8 | 90.9 | 79.2 | 162.9 | (218.8) | 438.8 | ||||||||||
| Net Income (Loss) From: | ||||||||||||||||||||
| Change in Fair Value of Equity and Convertible Securities | 17.5 | (0.5) | 32.3 | 41.2 | 57.8 | 35.7 | 56.6 | (93.1) | 90.5 | 57.0 | ||||||||||
| Net Realized Gains (Losses) on Sales of Investments | 17.2 | 7.9 | 15.2 | 10.9 | (0.1) | 7.9 | 9.3 | 13.0 | 51.2 | 30.1 | ||||||||||
| Impairment Losses | (2.5) | (0.5) | (2.5) | (3.2) | 0.4 | (0.8) | (5.5) | (9.5) | (8.7) | (15.4) | ||||||||||
| Acquisition Related Transaction, Integration and Other Costs | (7.2) | (6.4) | (8.2) | (12.9) | (15.8) | (11.4) | (13.5) | (9.3) | (34.7) | (50.0) | ||||||||||
| Debt Extinguishment, Pension and Other Charges | — | — | — | — | (50.6) | — | — | — | — | (50.6) | ||||||||||
| Net Income (Loss) | $ | (105.8) | $ | (75.3) | $ | (62.6) | $ | 123.2 | $ | 97.5 | $ | 122.3 | $ | 126.1 | $ | 64.0 | $ | (120.5) | $ | 409.9 |
Kemper Corporation
Catastrophe Frequency and Severity
(Dollars in Millions)
(Unaudited)
| Year Ended December 31, 2021 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Specialty Property & Casualty Insurance Segment | Preferred Property & Casualty Insurance Segment | Life & Health Insurance Segment | Consolidated | |||||||||
| Number of Events | Losses and LAE | Number of Events | Losses and LAE | Number of Events | Losses and LAE | Number of Events | Losses and LAE | |||||
| Range of Losses and LAE Per Event1: | ||||||||||||
| Below $5 | 52 | $ | 15.7 | 58 | $ | 42.6 | 47 | $ | 5.0 | 65 | $ | 56.1 |
| $5 - $10 | — | — | 3 | 21.5 | 1 | 8.0 | 2 | 16.5 | ||||
| $10 - $15 | — | — | 1 | 15.0 | — | — | — | — | ||||
| $15 - $20 | — | — | — | — | — | — | 2 | 35.2 | ||||
| $20 - $25 | — | — | — | — | — | — | — | — | ||||
| Greater Than $25 | — | — | — | — | — | — | — | — | ||||
| Total | 52 | $ | 15.7 | 62 | $ | 79.1 | 48 | $ | 13.0 | 69 | $ | 107.8 |
| Year Ended December 31, 2020 | ||||||||||||
| Specialty Property & Casualty Insurance Segment | Preferred Property & Casualty Insurance Segment | Life & Health Insurance Segment | Consolidated | |||||||||
| Number of Events | Losses and LAE | Number of Events | Losses and LAE | Number of Events | Losses and LAE | Number of Events | Losses and LAE | |||||
| Range of Losses and LAE Per Event1: | ||||||||||||
| Below $5 | 55 | $ | 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 | — | — | — | — | — | — | — | — | ||||
| Total | 55 | $ | 12.3 | 53 | $ | 82.0 | 34 | $ | 12.4 | 66 | $ | 106.7 |
| 1 Current accident year net incurred catastrophe Losses and LAE only |
Kemper Corporation
Specialty Property & Casualty Insurance Segment
Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Results of Operations | ||||||||||||||||||||||||||||||
| Net Premiums Written | $ | 979.0 | $ | 1,024.3 | $ | 1,082.0 | $ | 972.0 | $ | 829.2 | $ | 914.2 | $ | 780.9 | $ | 911.2 | $ | 4,057.3 | $ | 3,435.5 | ||||||||||
| Total Specialty P&C | ||||||||||||||||||||||||||||||
| Specialty Personal Automobile | 918.1 | 920.6 | 909.6 | 785.4 | 796.1 | 792.2 | 689.8 | 753.2 | 3,533.7 | 3,031.3 | ||||||||||||||||||||
| Commercial Automobile | 114.2 | 107.7 | 100.7 | 92.2 | 86.3 | 79.2 | 69.2 | 69.3 | 414.8 | 304.0 | ||||||||||||||||||||
| Earned Premium | $ | 1,032.3 | $ | 1,028.3 | $ | 1,010.3 | $ | 877.6 | $ | 882.4 | $ | 871.4 | $ | 759.0 | $ | 822.5 | $ | 3,948.5 | $ | 3,335.3 | ||||||||||
| Net Investment Income | 37.8 | 37.0 | 42.7 | 35.0 | 37.9 | 30.5 | 16.9 | 28.8 | 152.5 | 114.1 | ||||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (6.7) | (11.3) | (3.7) | (7.3) | — | — | — | — | (29.0) | — | ||||||||||||||||||||
| Other Income | 1.0 | 1.2 | 1.0 | 0.9 | 0.4 | 0.4 | 0.1 | 0.9 | 4.1 | 1.8 | ||||||||||||||||||||
| Total Revenues | 1,064.4 | 1,055.2 | 1,050.3 | 906.2 | 920.7 | 902.3 | 776.0 | 852.2 | 4,076.1 | 3,451.2 | ||||||||||||||||||||
| Incurred Losses and LAE related to: | ||||||||||||||||||||||||||||||
| Current Year: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 1,028.5 | 924.4 | 877.4 | 650.0 | 626.2 | 589.0 | 515.8 | 619.8 | 3,480.3 | 2,350.8 | ||||||||||||||||||||
| Catastrophe Losses and LAE | 2.5 | 3.4 | 8.1 | 1.7 | 5.5 | 2.1 | 4.5 | 0.2 | 15.7 | 12.3 | ||||||||||||||||||||
| Prior Years: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | (7.6) | 25.1 | 81.3 | (1.4) | (1.7) | 1.9 | 9.6 | 5.3 | 97.4 | 15.1 | ||||||||||||||||||||
| Catastrophe Losses and LAE | — | (0.1) | — | 0.4 | 0.1 | (0.1) | — | 0.2 | 0.3 | 0.2 | ||||||||||||||||||||
| Total Incurred Losses and LAE | 1,023.4 | 952.8 | 966.8 | 650.7 | 630.1 | 592.9 | 529.9 | 625.5 | 3,593.7 | 2,378.4 | ||||||||||||||||||||
| Insurance Expenses | 204.4 | 194.2 | 205.6 | 170.3 | 179.1 | 159.5 | 161.2 | 152.1 | 774.5 | 651.9 | ||||||||||||||||||||
| Other Expenses | — | — | — | — | — | — | 0.4 | (0.4) | — | — | ||||||||||||||||||||
| Operating Income (Loss) | (163.4) | (91.8) | (122.1) | 85.2 | 111.5 | 149.9 | 84.5 | 75.0 | (292.1) | 420.9 | ||||||||||||||||||||
| Income Tax Benefit (Expense) | 38.2 | 32.5 | 30.4 | (5.1) | (20.4) | (30.7) | (17.0) | (14.9) | 96.0 | (83.0) | ||||||||||||||||||||
| Segment Net Operating Income (Loss) | $ | (125.2) | $ | (59.3) | $ | (91.7) | $ | 80.1 | $ | 91.1 | $ | 119.2 | $ | 67.5 | $ | 60.1 | $ | (196.1) | $ | 337.9 | ||||||||||
| Ratios Based On Earned Premiums | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 99.6 | % | 90.0 | % | 86.9 | % | 74.1 | % | 71.0 | % | 67.6 | % | 67.9 | % | 75.4 | % | 88.1 | % | 70.4 | % | ||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 0.2 | 0.3 | 0.8 | 0.2 | 0.6 | 0.2 | 0.6 | — | 0.4 | 0.4 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | (0.7) | 2.4 | 8.0 | (0.2) | (0.2) | 0.2 | 1.3 | 0.6 | 2.5 | 0.5 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
| Total Incurred Loss and LAE Ratio | 99.1 | 92.7 | 95.7 | 74.1 | 71.4 | 68.0 | 69.8 | 76.0 | 91.0 | 71.3 | ||||||||||||||||||||
| Insurance Expense Ratio | 19.8 | 18.9 | 20.4 | 19.4 | 20.3 | 18.3 | 21.2 | 18.5 | 19.6 | 19.5 | ||||||||||||||||||||
| Combined Ratio | 118.9 | % | 111.6 | % | 116.1 | % | 93.5 | % | 91.7 | % | 86.3 | % | 91.0 | % | 94.5 | % | 110.6 | % | 90.8 | % | ||||||||||
| Underlying Combined Ratio 1 | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 99.6 | % | 90.0 | % | 86.9 | % | 74.1 | % | 71.0 | % | 67.6 | % | 67.9 | % | 75.4 | % | 88.1 | % | 70.4 | % | ||||||||||
| Insurance Expense Ratio | 19.8 | 18.9 | 20.4 | 19.4 | 20.3 | 18.3 | 21.2 | 18.5 | 19.6 | 19.5 | ||||||||||||||||||||
| Underlying Combined Ratio | 119.4 | % | 108.9 | % | 107.3 | % | 93.5 | % | 91.3 | % | 85.9 | % | 89.1 | % | 93.9 | % | 107.7 | % | 89.9 | % | ||||||||||
| Non-GAAP Measure Reconciliation | ||||||||||||||||||||||||||||||
| Combined Ratio as Reported | 118.9 | % | 111.6 | % | 116.1 | % | 93.5 | % | 91.7 | % | 86.3 | % | 91.0 | % | 94.5 | % | 110.6 | % | 90.8 | % | ||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 0.2 | 0.3 | 0.8 | 0.2 | 0.6 | 0.2 | 0.6 | — | 0.4 | 0.4 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | (0.7) | 2.4 | 8.0 | (0.2) | (0.2) | 0.2 | 1.3 | 0.6 | 2.5 | 0.5 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
| Underlying Combined Ratio | 119.4 | % | 108.9 | % | 107.3 | % | 93.5 | % | 91.3 | % | 85.9 | % | 89.1 | % | 93.9 | % | 107.7 | % | 89.9 | % | ||||||||||
| 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. |
Kemper Corporation
Specialty Property & Casualty Insurance Segment
Results of Operations and Selected Financial Information (continued)
(Dollars in Millions)
(Unaudited)
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Insurance Reserves: | ||||||||||||||||
| Non-Standard Automobile | $ | 1,985.8 | $ | 1,841.1 | $ | 1,703.1 | $ | 1,304.7 | $ | 1,308.3 | $ | 1,271.9 | $ | 1,252.6 | $ | 1,326.3 |
| Commercial Automobile | 333.9 | 302.4 | 281.6 | 257.2 | 236.5 | 223.0 | 221.0 | 215.1 | ||||||||
| Insurance Reserves | $ | 2,319.7 | $ | 2,143.5 | $ | 1,984.7 | $ | 1,561.9 | $ | 1,544.8 | $ | 1,494.9 | $ | 1,473.6 | $ | 1,541.4 |
| Insurance Reserves: | ||||||||||||||||
| Loss and Allocated LAE Reserves: | ||||||||||||||||
| Case and Allocated LAE | $ | 1,157.9 | $ | 1,071.1 | $ | 1,005.8 | $ | 799.7 | $ | 744.6 | $ | 718.8 | $ | 667.9 | $ | 716.0 |
| Incurred but Not Reported | 953.0 | 881.6 | 810.2 | 614.1 | 653.6 | 631.8 | 660.8 | 679.1 | ||||||||
| Total Loss Reserves | 2,110.9 | 1,952.7 | 1,816.0 | 1,413.8 | 1,398.2 | 1,350.6 | 1,328.7 | 1,395.1 | ||||||||
| Unallocated LAE Reserves | 208.8 | 190.8 | 168.7 | 148.1 | 146.6 | 144.3 | 144.9 | 146.3 | ||||||||
| Insurance Reserves | $ | 2,319.7 | $ | 2,143.5 | $ | 1,984.7 | $ | 1,561.9 | $ | 1,544.8 | $ | 1,494.9 | $ | 1,473.6 | $ | 1,541.4 |
Kemper Corporation
Specialty Property & Casualty Insurance Segment
Specialty Personal Automobile Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Results of Operations | ||||||||||||||||||||||||||||||
| Net Premiums Written | $ | 858.7 | $ | 902.7 | $ | 964.3 | $ | 861.5 | $ | 736.3 | $ | 819.4 | $ | 700.5 | $ | 830.3 | $ | 3,587.2 | $ | 3,086.5 | ||||||||||
| Earned Premiums | $ | 918.1 | $ | 920.6 | $ | 909.6 | $ | 785.4 | $ | 796.1 | $ | 792.2 | $ | 689.8 | $ | 753.2 | $ | 3,533.7 | $ | 3,031.3 | ||||||||||
| Net Investment Income | 31.5 | 30.9 | 35.4 | 29.1 | 32.4 | 26.2 | 15.2 | 24.8 | 126.9 | 98.6 | ||||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (5.3) | (8.9) | (2.9) | (5.8) | — | — | — | — | (22.9) | — | ||||||||||||||||||||
| Other Income | 1.0 | 1.2 | 1.0 | 0.9 | 0.4 | 0.4 | 0.1 | 0.8 | 4.1 | 1.7 | ||||||||||||||||||||
| Total Revenues | 945.3 | 943.8 | 943.1 | 809.6 | 828.9 | 818.8 | 705.1 | 778.8 | 3,641.8 | 3,131.6 | ||||||||||||||||||||
| Incurred Losses and LAE related to: | ||||||||||||||||||||||||||||||
| Current Year: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 938.5 | 843.9 | 805.1 | 586.4 | 569.1 | 543.4 | 472.4 | 576.0 | 3,173.9 | 2,160.9 | ||||||||||||||||||||
| Catastrophe Losses and LAE | 2.3 | 3.1 | 7.4 | 1.6 | 5.2 | 2.0 | 4.2 | 0.2 | 14.4 | 11.6 | ||||||||||||||||||||
| Prior Years: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | (11.7) | 25.1 | 76.0 | (4.4) | (3.1) | 2.1 | 11.2 | 17.8 | 85.0 | 28.0 | ||||||||||||||||||||
| Catastrophe Losses and LAE | — | (0.1) | — | 0.4 | — | (0.1) | 0.1 | 0.2 | 0.3 | 0.2 | ||||||||||||||||||||
| Total Incurred Losses and LAE | 929.1 | 872.0 | 888.5 | 584.0 | 571.2 | 547.4 | 487.9 | 594.2 | 3,273.6 | 2,200.7 | ||||||||||||||||||||
| Insurance Expenses | 184.3 | 176.0 | 187.7 | 155.3 | 162.8 | 145.6 | 146.7 | 139.2 | 703.3 | 594.3 | ||||||||||||||||||||
| Other Expenses | — | — | — | — | — | — | 0.4 | (0.4) | — | — | ||||||||||||||||||||
| Operating Income (Loss) | (168.1) | (104.2) | (133.1) | 70.3 | 94.9 | 125.8 | 70.1 | 45.8 | (335.1) | 336.6 | ||||||||||||||||||||
| Income Benefit (Expense) | 38.4 | 32.4 | 31.8 | (4.6) | (17.5) | (25.7) | (14.2) | (8.8) | 98.0 | (66.2) | ||||||||||||||||||||
| Total Product Line Net Operating Income (Loss) | $ | (129.7) | $ | (71.8) | $ | (101.3) | $ | 65.7 | $ | 77.4 | $ | 100.1 | $ | 55.9 | $ | 37.0 | $ | (237.1) | $ | 270.4 | ||||||||||
| Ratios Based On Earned Premiums | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 102.2 | % | 91.7 | % | 88.5 | % | 74.7 | % | 71.4 | % | 68.5 | % | 68.5 | % | 76.5 | % | 89.8 | % | 71.3 | % | ||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 0.3 | 0.3 | 0.8 | 0.2 | 0.7 | 0.3 | 0.6 | — | 0.4 | 0.4 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | (1.3) | 2.7 | 8.4 | (0.6) | (0.4) | 0.3 | 1.6 | 2.4 | 2.4 | 0.9 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | — | — | 0.1 | — | — | — | — | — | — | ||||||||||||||||||||
| Total Incurred Loss and LAE Ratio | 101.2 | 94.7 | 97.7 | 74.4 | 71.7 | 69.1 | 70.7 | 78.9 | 92.6 | 72.6 | ||||||||||||||||||||
| Insurance Expense Ratio | 20.1 | 19.1 | 20.6 | 19.8 | 20.4 | 18.4 | 21.3 | 18.5 | 19.9 | 19.6 | ||||||||||||||||||||
| Combined Ratio | 121.3 | % | 113.8 | % | 118.3 | % | 94.2 | % | 92.1 | % | 87.5 | % | 92.0 | % | 97.4 | % | 112.5 | % | 92.2 | % | ||||||||||
| Underlying Combined Ratio 1 | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 102.2 | % | 91.7 | % | 88.5 | % | 74.7 | % | 71.4 | % | 68.5 | % | 68.5 | % | 76.5 | % | 89.8 | % | 71.3 | % | ||||||||||
| Insurance Expense Ratio | 20.1 | 19.1 | 20.6 | 19.8 | 20.4 | 18.4 | 21.3 | 18.5 | 19.9 | 19.6 | ||||||||||||||||||||
| Underlying Combined Ratio | 122.3 | % | 110.8 | % | 109.1 | % | 94.5 | % | 91.8 | % | 86.9 | % | 89.8 | % | 95.0 | % | 109.7 | % | 90.9 | % | ||||||||||
| Non-GAAP Measure Reconciliation | ||||||||||||||||||||||||||||||
| Combined Ratio | 121.3 | % | 113.8 | % | 118.3 | % | 94.2 | % | 92.1 | % | 87.5 | % | 92.0 | % | 97.4 | % | 112.5 | % | 92.2 | % | ||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 0.3 | 0.3 | 0.8 | 0.2 | 0.7 | 0.3 | 0.6 | — | 0.4 | 0.4 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | (1.3) | 2.7 | 8.4 | (0.6) | (0.4) | 0.3 | 1.6 | 2.4 | 2.4 | 0.9 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | — | — | 0.1 | — | — | — | — | — | — | ||||||||||||||||||||
| Underlying Combined Ratio | 122.3 | % | 110.8 | % | 109.1 | % | 94.5 | % | 91.8 | % | 86.9 | % | 89.8 | % | 95.0 | % | 109.7 | % | 90.9 | % | ||||||||||
| 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. |
Kemper Corporation
Specialty Property & Casualty Insurance Segment
Commercial Automobile Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Results of Operations | ||||||||||||||||||||||||||||||
| Net Premiums Written | $ | 120.3 | $ | 121.6 | $ | 117.7 | $ | 110.5 | $ | 92.9 | $ | 94.8 | $ | 80.4 | $ | 80.9 | $ | 470.1 | $ | 349.0 | ||||||||||
| Earned Premiums | $ | 114.2 | $ | 107.7 | $ | 100.7 | $ | 92.2 | $ | 86.3 | $ | 79.2 | $ | 69.2 | $ | 69.3 | $ | 414.8 | $ | 304.0 | ||||||||||
| Net Investment Income | 6.3 | 6.1 | 7.3 | 5.9 | 5.5 | 4.3 | 1.7 | 4.0 | 25.6 | 15.5 | ||||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (1.4) | (2.4) | (0.8) | (1.5) | — | — | — | — | (6.1) | — | ||||||||||||||||||||
| Other Income | — | — | — | — | — | — | — | 0.1 | — | 0.1 | ||||||||||||||||||||
| Total Revenues | 119.1 | 111.4 | 107.2 | 96.6 | 91.8 | 83.5 | 70.9 | 73.4 | 434.3 | 319.6 | ||||||||||||||||||||
| Incurred Losses and LAE related to: | ||||||||||||||||||||||||||||||
| Current Year: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 90.0 | 80.5 | 72.3 | 63.6 | 57.1 | 45.6 | 43.4 | 43.8 | 306.4 | 189.9 | ||||||||||||||||||||
| Catastrophe Losses and LAE | 0.2 | 0.3 | 0.7 | 0.1 | 0.3 | 0.1 | 0.3 | — | 1.3 | 0.7 | ||||||||||||||||||||
| Prior Years: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 4.1 | — | 5.3 | 3.0 | 1.4 | (0.2) | (1.6) | (12.5) | 12.4 | (12.9) | ||||||||||||||||||||
| Catastrophe Losses and LAE | — | — | — | — | 0.1 | — | (0.1) | — | — | — | ||||||||||||||||||||
| Total Incurred Losses and LAE | 94.3 | 80.8 | 78.3 | 66.7 | 58.9 | 45.5 | 42.0 | 31.3 | 320.1 | 177.7 | ||||||||||||||||||||
| Insurance Expenses | 20.1 | 18.2 | 17.9 | 15.0 | 16.3 | 13.9 | 14.5 | 12.9 | 71.2 | 57.6 | ||||||||||||||||||||
| Operating Income (Loss) | 4.7 | 12.4 | 11.0 | 14.9 | 16.6 | 24.1 | 14.4 | 29.2 | 43.0 | 84.3 | ||||||||||||||||||||
| Income Tax Benefit (Expense) | (0.2) | 0.1 | (1.4) | (0.5) | (2.9) | (5.0) | (2.8) | (6.1) | (2.0) | (16.8) | ||||||||||||||||||||
| Total Product Line Net Operating Income (Loss) | $ | 4.5 | $ | 12.5 | $ | 9.6 | $ | 14.4 | $ | 13.7 | $ | 19.1 | $ | 11.6 | $ | 23.1 | $ | 41.0 | $ | 67.5 | ||||||||||
| Ratios Based On Earned Premiums | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 78.8 | % | 74.7 | % | 71.8 | % | 68.9 | % | 66.3 | % | 57.6 | % | 62.7 | % | 63.2 | % | 73.9 | % | 62.5 | % | ||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 0.2 | 0.3 | 0.7 | 0.1 | 0.3 | 0.1 | 0.4 | — | 0.3 | 0.2 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 3.6 | — | 5.3 | 3.3 | 1.6 | (0.3) | (2.3) | (18.0) | 3.0 | (4.2) | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | — | — | — | 0.1 | — | (0.1) | — | — | — | ||||||||||||||||||||
| Total Incurred Loss and LAE Ratio | 82.6 | 75.0 | 77.8 | 72.3 | 68.3 | 57.4 | 60.7 | 45.2 | 77.2 | 58.5 | ||||||||||||||||||||
| Insurance Expense Ratio | 17.6 | 16.9 | 17.8 | 16.3 | 18.9 | 17.6 | 21.0 | 18.6 | 17.2 | 18.9 | ||||||||||||||||||||
| Combined Ratio | 100.2 | % | 91.9 | % | 95.6 | % | 88.6 | % | 87.2 | % | 75.0 | % | 81.7 | % | 63.8 | % | 94.4 | % | 77.4 | % | ||||||||||
| Underlying Combined Ratio 1 | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 78.8 | % | 74.7 | % | 71.8 | % | 68.9 | % | 66.3 | % | 57.6 | % | 62.7 | % | 63.2 | % | 73.9 | % | 62.5 | % | ||||||||||
| Insurance Expense Ratio | 17.6 | 16.9 | 17.8 | 16.3 | 18.9 | 17.6 | 21.0 | 18.6 | 17.2 | 18.9 | ||||||||||||||||||||
| Underlying Combined Ratio | 96.4 | % | 91.6 | % | 89.6 | % | 85.2 | % | 85.2 | % | 75.2 | % | 83.7 | % | 81.8 | % | 91.1 | % | 81.4 | % | ||||||||||
| Non-GAAP Measure Reconciliation | ||||||||||||||||||||||||||||||
| Combined Ratio | 100.2 | % | 91.9 | % | 95.6 | % | 88.6 | % | 87.2 | % | 75.0 | % | 81.7 | % | 63.8 | % | 94.4 | % | 77.4 | % | ||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 0.2 | 0.3 | 0.7 | 0.1 | 0.3 | 0.1 | 0.4 | — | 0.3 | 0.2 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 3.6 | — | 5.3 | 3.3 | 1.6 | (0.3) | (2.3) | (18.0) | 3.0 | (4.2) | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | — | — | — | 0.1 | — | (0.1) | — | — | — | ||||||||||||||||||||
| Underlying Combined Ratio | 96.4 | % | 91.6 | % | 89.6 | % | 85.2 | % | 85.2 | % | 75.2 | % | 83.7 | % | 81.8 | % | 91.1 | % | 81.4 | % | ||||||||||
| 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. |
Kemper Corporation
Preferred Property & Casualty Insurance Segment
Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Results of Operations | ||||||||||||||||||||||||||||||
| Net Premiums Written | $ | 153.2 | $ | 164.8 | $ | 169.6 | $ | 154.4 | $ | 155.2 | $ | 172.2 | $ | 161.5 | $ | 164.1 | $ | 642.0 | $ | 653.0 | ||||||||||
| Earned Premiums | $ | 162.6 | $ | 163.7 | $ | 163.2 | $ | 162.2 | $ | 169.2 | $ | 174.5 | $ | 163.6 | $ | 180.9 | $ | 651.7 | $ | 688.2 | ||||||||||
| Net Investment Income | 17.1 | 16.1 | 19.5 | 15.9 | 13.4 | 10.3 | 4.3 | 9.7 | 68.6 | 37.7 | ||||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (3.8) | (6.4) | (2.0) | (4.1) | — | — | — | — | (16.3) | — | ||||||||||||||||||||
| Other Income | — | — | — | — | — | — | 0.1 | — | — | 0.1 | ||||||||||||||||||||
| Total Revenues | 175.9 | 173.4 | 180.7 | 174.0 | 182.6 | 184.8 | 168.0 | 190.6 | 704.0 | 726.0 | ||||||||||||||||||||
| Incurred Losses and LAE related to: | ||||||||||||||||||||||||||||||
| Current Year: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 122.4 | 115.6 | 116.2 | 96.2 | 107.1 | 102.8 | 82.5 | 108.5 | 450.4 | 400.9 | ||||||||||||||||||||
| Catastrophe Losses and LAE | 7.5 | 23.4 | 24.2 | 24.0 | (5.3) | 61.9 | 20.6 | 4.8 | 79.1 | 82.0 | ||||||||||||||||||||
| Prior Years: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 8.4 | — | 5.0 | 0.1 | 9.5 | 6.3 | 8.2 | (3.3) | 13.5 | 20.7 | ||||||||||||||||||||
| Catastrophe Losses and LAE | (2.0) | 0.1 | (3.4) | (0.3) | 0.1 | 0.1 | 0.4 | (1.1) | (5.6) | (0.5) | ||||||||||||||||||||
| Total Incurred Losses and LAE | 136.3 | 139.1 | 142.0 | 120.0 | 111.4 | 171.1 | 111.7 | 108.9 | 537.4 | 503.1 | ||||||||||||||||||||
| Insurance Expenses | 51.6 | 51.7 | 52.1 | 51.0 | 51.4 | 55.5 | 55.5 | 58.7 | 206.4 | 221.1 | ||||||||||||||||||||
| Operating Income (Loss) | (12.0) | (17.4) | (13.4) | 3.0 | 19.8 | (41.8) | 0.8 | 23.0 | (39.8) | 1.8 | ||||||||||||||||||||
| Income Tax Benefit (Expense) | 4.6 | 11.0 | 5.1 | 6.6 | (2.9) | 9.1 | 0.1 | (4.6) | 27.3 | 1.7 | ||||||||||||||||||||
| Segment Net Operating Income (Loss) | $ | (7.4) | $ | (6.4) | $ | (8.3) | $ | 9.6 | $ | 16.9 | $ | (32.7) | $ | 0.9 | $ | 18.4 | $ | (12.5) | $ | 3.5 | ||||||||||
| Ratios Based On Earned Premiums | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 75.2 | % | 70.6 | % | 71.2 | % | 59.3 | % | 63.2 | % | 58.9 | % | 50.5 | % | 59.9 | % | 69.2 | % | 58.3 | % | ||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 4.6 | 14.3 | 14.8 | 14.8 | (3.1) | 35.5 | 12.6 | 2.7 | 12.1 | 11.9 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 5.2 | — | 3.1 | 0.1 | 5.6 | 3.6 | 5.0 | (1.8) | 2.1 | 3.0 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (1.2) | 0.1 | (2.1) | (0.2) | 0.1 | 0.1 | 0.2 | (0.6) | (0.9) | (0.1) | ||||||||||||||||||||
| Total Incurred Loss and LAE Ratio | 83.8 | 85.0 | 87.0 | 74.0 | 65.8 | 98.1 | 68.3 | 60.2 | 82.5 | 73.1 | ||||||||||||||||||||
| Insurance Expense Ratio | 31.7 | 31.6 | 31.9 | 31.4 | 30.4 | 31.8 | 33.9 | 32.4 | 31.7 | 32.1 | ||||||||||||||||||||
| Combined Ratio | 115.5 | % | 116.6 | % | 118.9 | % | 105.4 | % | 96.2 | % | 129.9 | % | 102.2 | % | 92.6 | % | 114.2 | % | 105.2 | % | ||||||||||
| Underlying Combined Ratio 1 | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 75.2 | % | 70.6 | % | 71.2 | % | 59.3 | % | 63.2 | % | 58.9 | % | 50.5 | % | 59.9 | % | 69.2 | % | 58.3 | % | ||||||||||
| Insurance Expense Ratio | 31.7 | 31.6 | 31.9 | 31.4 | 30.4 | 31.8 | 33.9 | 32.4 | 31.7 | 32.1 | ||||||||||||||||||||
| Underlying Combined Ratio | 106.9 | % | 102.2 | % | 103.1 | % | 90.7 | % | 93.6 | % | 90.7 | % | 84.4 | % | 92.3 | % | 100.9 | % | 90.4 | % | ||||||||||
| Non-GAAP Measure Reconciliation | ||||||||||||||||||||||||||||||
| Combined Ratio as Reported | 115.5 | % | 116.6 | % | 118.9 | % | 105.4 | % | 96.2 | % | 129.9 | % | 102.2 | % | 92.6 | % | 114.2 | % | 105.2 | % | ||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 4.6 | 14.3 | 14.8 | 14.8 | (3.1) | 35.5 | 12.6 | 2.7 | 12.1 | 11.9 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 5.2 | — | 3.1 | 0.1 | 5.6 | 3.6 | 5.0 | (1.8) | 2.1 | 3.0 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (1.2) | 0.1 | (2.1) | (0.2) | 0.1 | 0.1 | 0.2 | (0.6) | (0.9) | (0.1) | ||||||||||||||||||||
| Underlying Combined Ratio | 106.9 | % | 102.2 | % | 103.1 | % | 90.7 | % | 93.6 | % | 90.7 | % | 84.4 | % | 92.3 | % | 100.9 | % | 90.4 | % | ||||||||||
| 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. |
Kemper Corporation
Preferred Property & Casualty Insurance Segment
Results of Operations and Selected Financial Information (continued)
(Dollars in Millions)
(Unaudited)
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Insurance Reserves: | ||||||||||||||||
| Preferred Automobile | $ | 308.6 | $ | 290.0 | $ | 282.9 | $ | 275.9 | $ | 281.3 | $ | 265.2 | $ | 252.8 | $ | 254.8 |
| Homeowners | 95.4 | 108.5 | 110.7 | 107.6 | 104.0 | 137.9 | 99.5 | 90.8 | ||||||||
| Other Personal | 29.2 | 30.1 | 31.0 | 30.7 | 26.3 | 25.5 | 25.7 | 28.8 | ||||||||
| Insurance Reserves | $ | 433.2 | $ | 428.6 | $ | 424.6 | $ | 414.2 | $ | 411.6 | $ | 428.6 | $ | 378.0 | $ | 374.4 |
| Insurance Reserves: | ||||||||||||||||
| Loss and Allocated LAE Reserves: | ||||||||||||||||
| Case and Allocated LAE | $ | 272.5 | $ | 280.8 | $ | 282.3 | $ | 282.0 | $ | 262.2 | $ | 266.8 | $ | 230.7 | $ | 231.1 |
| Incurred but Not Reported | 131.9 | 120.4 | 116.1 | 105.6 | 122.0 | 134.2 | 119.6 | 115.1 | ||||||||
| Total Loss Reserves | 404.4 | 401.2 | 398.4 | 387.6 | 384.2 | 401.0 | 350.3 | 346.2 | ||||||||
| Unallocated LAE Reserves | 28.8 | 27.4 | 26.2 | 26.6 | 27.4 | 27.6 | 27.7 | 28.2 | ||||||||
| Insurance Reserves | $ | 433.2 | $ | 428.6 | $ | 424.6 | $ | 414.2 | $ | 411.6 | $ | 428.6 | $ | 378.0 | $ | 374.4 |
Kemper Corporation
Preferred Property & Casualty Insurance Segment
Preferred Personal Automobile Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Results of Operations | ||||||||||||||||||||||||||||||
| Net Premiums Written | $ | 95.2 | $ | 99.9 | $ | 104.4 | $ | 100.4 | $ | 98.8 | $ | 107.2 | $ | 95.6 | $ | 105.9 | $ | 399.9 | $ | 407.5 | ||||||||||
| Earned Premiums | $ | 101.4 | $ | 102.6 | $ | 103.5 | $ | 103.0 | $ | 107.1 | $ | 110.6 | $ | 99.1 | $ | 114.9 | $ | 410.5 | $ | 431.7 | ||||||||||
| Net Investment Income | 7.9 | 7.4 | 9.0 | 7.3 | 7.9 | 6.1 | 2.5 | 5.8 | 31.6 | 22.3 | ||||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (1.7) | (3.0) | (0.9) | (1.9) | — | — | — | — | (7.5) | — | ||||||||||||||||||||
| Other Income | — | — | — | — | — | — | 0.1 | — | — | 0.1 | ||||||||||||||||||||
| Total Revenues | 107.6 | 107.0 | 111.6 | 108.4 | 115.0 | 116.7 | 101.7 | 120.7 | 434.6 | 454.1 | ||||||||||||||||||||
| Incurred Losses and LAE related to: | ||||||||||||||||||||||||||||||
| Current Year: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 96.2 | 84.8 | 81.6 | 67.8 | 78.0 | 72.2 | 53.8 | 75.9 | 330.4 | 279.9 | ||||||||||||||||||||
| Catastrophe Losses and LAE | 1.3 | 2.7 | 2.8 | 0.6 | 0.4 | 1.8 | 2.0 | 0.2 | 7.4 | 4.4 | ||||||||||||||||||||
| Prior Years: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 7.3 | 0.1 | 3.6 | 1.2 | 9.9 | 5.9 | 9.7 | 2.2 | 12.2 | 27.7 | ||||||||||||||||||||
| Catastrophe Losses and LAE | (0.1) | 0.1 | (0.2) | 0.1 | (0.4) | (0.2) | (0.3) | (0.1) | (0.1) | (1.0) | ||||||||||||||||||||
| Total Incurred Losses and LAE | 104.7 | 87.7 | 87.8 | 69.7 | 87.9 | 79.7 | 65.2 | 78.2 | 349.9 | 311.0 | ||||||||||||||||||||
| Insurance Expenses | 32.7 | 32.7 | 33.6 | 32.8 | 32.3 | 34.7 | 34.0 | 36.1 | 131.8 | 137.1 | ||||||||||||||||||||
| Operating Income (Loss) | (29.8) | (13.4) | (9.8) | 5.9 | (5.2) | 2.3 | 2.5 | 6.4 | (47.1) | 6.0 | ||||||||||||||||||||
| Income Tax Benefit (Expense) | 7.2 | 6.2 | 3.1 | 2.1 | 1.9 | (0.3) | (0.4) | (1.2) | 18.6 | — | ||||||||||||||||||||
| Total Product Line Net Operating Income (Loss) | $ | (22.6) | $ | (7.2) | $ | (6.7) | $ | 8.0 | $ | (3.3) | $ | 2.0 | $ | 2.1 | $ | 5.2 | $ | (28.5) | $ | 6.0 | ||||||||||
| Ratios Based On Earned Premiums | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 94.9 | % | 82.7 | % | 78.8 | % | 65.8 | % | 72.9 | % | 65.4 | % | 54.3 | % | 66.1 | % | 80.4 | % | 64.8 | % | ||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 1.3 | 2.6 | 2.7 | 0.6 | 0.4 | 1.6 | 2.0 | 0.2 | 1.8 | 1.0 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 7.2 | 0.1 | 3.5 | 1.2 | 9.2 | 5.3 | 9.8 | 1.9 | 3.0 | 6.4 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (0.1) | 0.1 | (0.2) | 0.1 | (0.4) | (0.2) | (0.3) | (0.1) | — | (0.2) | ||||||||||||||||||||
| Total Incurred Loss and LAE Ratio | 103.3 | 85.5 | 84.8 | 67.7 | 82.1 | 72.1 | 65.8 | 68.1 | 85.2 | 72.0 | ||||||||||||||||||||
| Insurance Expense Ratio | 32.2 | 31.9 | 32.5 | 31.8 | 30.2 | 31.4 | 34.3 | 31.4 | 32.1 | 31.8 | ||||||||||||||||||||
| Combined Ratio | 135.5 | % | 117.4 | % | 117.3 | % | 99.5 | % | 112.3 | % | 103.5 | % | 100.1 | % | 99.5 | % | 117.3 | % | 103.8 | % | ||||||||||
| Underlying Combined Ratio 1 | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 94.9 | % | 82.7 | % | 78.8 | % | 65.8 | % | 72.9 | % | 65.4 | % | 54.3 | % | 66.1 | % | 80.4 | % | 64.8 | % | ||||||||||
| Insurance Expense Ratio | 32.2 | 31.9 | 32.5 | 31.8 | 30.2 | 31.4 | 34.3 | 31.4 | 32.1 | 31.8 | ||||||||||||||||||||
| Underlying Combined Ratio | 127.1 | % | 114.6 | % | 111.3 | % | 97.6 | % | 103.1 | % | 96.8 | % | 88.6 | % | 97.5 | % | 112.5 | % | 96.6 | % | ||||||||||
| Non-GAAP Measure Reconciliation | ||||||||||||||||||||||||||||||
| Combined Ratio | 135.5 | % | 117.4 | % | 117.3 | % | 99.5 | % | 112.3 | % | 103.5 | % | 100.1 | % | 99.5 | % | 117.3 | % | 103.8 | % | ||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 1.3 | 2.6 | 2.7 | 0.6 | 0.4 | 1.6 | 2.0 | 0.2 | 1.8 | 1.0 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 7.2 | 0.1 | 3.5 | 1.2 | 9.2 | 5.3 | 9.8 | 1.9 | 3.0 | 6.4 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (0.1) | 0.1 | (0.2) | 0.1 | (0.4) | (0.2) | (0.3) | (0.1) | — | (0.2) | ||||||||||||||||||||
| Underlying Combined Ratio | 127.1 | % | 114.6 | % | 111.3 | % | 97.6 | % | 103.1 | % | 96.8 | % | 88.6 | % | 97.5 | % | 112.5 | % | 96.6 | % | ||||||||||
| 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. |
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 Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Results of Operations | ||||||||||||||||||||||||||||||
| Net Premiums Written | $ | 58.0 | $ | 64.9 | $ | 65.2 | $ | 54.0 | $ | 56.4 | $ | 65.0 | $ | 65.9 | $ | 58.2 | $ | 242.1 | $ | 245.5 | ||||||||||
| Earned Premiums | $ | 61.2 | $ | 61.1 | $ | 59.7 | $ | 59.2 | $ | 62.1 | $ | 63.9 | $ | 64.5 | $ | 66.0 | $ | 241.2 | $ | 256.5 | ||||||||||
| Net Investment Income | 9.2 | 8.7 | 10.5 | 8.6 | 5.5 | 4.2 | 1.8 | 3.9 | 37.0 | 15.4 | ||||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (2.1) | (3.4) | (1.1) | (2.2) | — | — | — | — | (8.8) | — | ||||||||||||||||||||
| Total Revenues | 68.3 | 66.4 | 69.1 | 65.6 | 67.6 | 68.1 | 66.3 | 69.9 | 269.4 | 271.9 | ||||||||||||||||||||
| Incurred Losses and LAE related to: | ||||||||||||||||||||||||||||||
| Current Year: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 26.2 | 30.8 | 34.6 | 28.4 | 29.1 | 30.6 | 28.7 | 32.6 | 120.0 | 121.0 | ||||||||||||||||||||
| Catastrophe Losses and LAE | 6.2 | 20.7 | 21.4 | 23.4 | (5.7) | 60.1 | 18.6 | 4.6 | 71.7 | 77.6 | ||||||||||||||||||||
| Prior Years: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 1.1 | (0.1) | 1.4 | (1.1) | (0.4) | 0.4 | (1.5) | (5.5) | 1.3 | (7.0) | ||||||||||||||||||||
| Catastrophe Losses and LAE | (1.9) | — | (3.2) | (0.4) | 0.5 | 0.3 | 0.7 | (1.0) | (5.5) | 0.5 | ||||||||||||||||||||
| Total Incurred Losses and LAE | 31.6 | 51.4 | 54.2 | 50.3 | 23.5 | 91.4 | 46.5 | 30.7 | 187.5 | 192.1 | ||||||||||||||||||||
| Insurance Expenses | 18.9 | 19.0 | 18.5 | 18.2 | 19.1 | 20.8 | 21.5 | 22.6 | 74.6 | 84.0 | ||||||||||||||||||||
| Operating Income (Loss) | 17.8 | (4.0) | (3.6) | (2.9) | 25.0 | (44.1) | (1.7) | 16.6 | 7.3 | (4.2) | ||||||||||||||||||||
| Income Tax Benefit (Expense) | (2.6) | 4.8 | 2.0 | 4.5 | (4.8) | 9.4 | 0.5 | (3.4) | 8.7 | 1.7 | ||||||||||||||||||||
| Total Product Line Net Operating Income (Loss) | $ | 15.2 | $ | 0.8 | $ | (1.6) | $ | 1.6 | $ | 20.2 | $ | (34.7) | $ | (1.2) | $ | 13.2 | $ | 16.0 | $ | (2.5) | ||||||||||
| Ratios Based On Earned Premiums | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 42.8 | % | 50.4 | % | 58.1 | % | 48.1 | % | 46.8 | % | 47.8 | % | 44.5 | % | 49.3 | % | 49.8 | % | 47.1 | % | ||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 10.1 | 33.9 | 35.8 | 39.5 | (9.2) | 94.1 | 28.8 | 7.0 | 29.7 | 30.3 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 1.8 | (0.2) | 2.3 | (1.9) | (0.6) | 0.6 | (2.3) | (8.3) | 0.5 | (2.7) | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (3.1) | — | (5.4) | (0.7) | 0.8 | 0.5 | 1.1 | (1.5) | (2.3) | 0.2 | ||||||||||||||||||||
| Total Incurred Loss and LAE Ratio | 51.6 | 84.1 | 90.8 | 85.0 | 37.8 | 143.0 | 72.1 | 46.5 | 77.7 | 74.9 | ||||||||||||||||||||
| Insurance Expense Ratio | 30.9 | 31.1 | 31.0 | 30.7 | 30.8 | 32.6 | 33.3 | 34.2 | 30.9 | 32.7 | ||||||||||||||||||||
| Combined Ratio | 82.5 | % | 115.2 | % | 121.8 | % | 115.7 | % | 68.6 | % | 175.6 | % | 105.4 | % | 80.7 | % | 108.6 | % | 107.6 | % | ||||||||||
| Underlying Combined Ratio 1 | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 42.8 | % | 50.4 | % | 58.1 | % | 48.1 | % | 46.8 | % | 47.8 | % | 44.5 | % | 49.3 | % | 49.8 | % | 47.1 | % | ||||||||||
| Insurance Expense Ratio | 30.9 | 31.1 | 31.0 | 30.7 | 30.8 | 32.6 | 33.3 | 34.2 | 30.9 | 32.7 | ||||||||||||||||||||
| Underlying Combined Ratio | 73.7 | % | 81.5 | % | 89.1 | % | 78.8 | % | 77.6 | % | 80.4 | % | 77.8 | % | 83.5 | % | 80.7 | % | 79.8 | % | ||||||||||
| Non-GAAP Measure Reconciliation | ||||||||||||||||||||||||||||||
| Combined Ratio | 82.5 | % | 115.2 | % | 121.8 | % | 115.7 | % | 68.6 | % | 175.6 | % | 105.4 | % | 80.7 | % | 108.6 | % | 107.6 | % | ||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 10.1 | 33.9 | 35.8 | 39.5 | (9.2) | 94.1 | 28.8 | 7.0 | 29.7 | 30.3 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 1.8 | (0.2) | 2.3 | (1.9) | (0.6) | 0.6 | (2.3) | (8.3) | 0.5 | (2.7) | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (3.1) | — | (5.4) | (0.7) | 0.8 | 0.5 | 1.1 | (1.5) | (2.3) | 0.2 | ||||||||||||||||||||
| Underlying Combined Ratio | 73.7 | % | 81.5 | % | 89.1 | % | 78.8 | % | 77.6 | % | 80.4 | % | 77.8 | % | 83.5 | % | 80.7 | % | 79.8 | % | ||||||||||
| 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. |
Kemper Corporation
Preferred Property & Casualty Insurance Segment
Homeowners Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Results of Operations | ||||||||||||||||||||||||||||||
| Net Premiums Written | $ | 49.9 | $ | 56.1 | $ | 56.3 | $ | 46.1 | $ | 48.3 | $ | 55.7 | $ | 57.2 | $ | 49.9 | $ | 208.4 | $ | 211.1 | ||||||||||
| Earned Premiums | $ | 52.7 | $ | 52.5 | $ | 51.3 | $ | 50.8 | $ | 53.3 | $ | 55.0 | $ | 55.6 | $ | 56.8 | $ | 207.3 | $ | 220.7 | ||||||||||
| Net Investment Income | 8.3 | 7.9 | 9.6 | 7.8 | 5.0 | 3.8 | 1.6 | 3.6 | 33.6 | 14.0 | ||||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (1.9) | (3.1) | (1.0) | (2.0) | — | — | — | — | (8.0) | — | ||||||||||||||||||||
| Total Revenues | 59.1 | 57.3 | 59.9 | 56.6 | 58.3 | 58.8 | 57.2 | 60.4 | 232.9 | 234.7 | ||||||||||||||||||||
| Incurred Losses and LAE related to: | ||||||||||||||||||||||||||||||
| Current Year: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 22.8 | 26.6 | 30.5 | 24.2 | 26.5 | 28.1 | 25.4 | 28.7 | 104.1 | 108.7 | ||||||||||||||||||||
| Catastrophe Losses and LAE | 6.0 | 20.4 | 21.8 | 22.0 | (10.1) | 58.6 | 18.2 | 4.5 | 70.2 | 71.2 | ||||||||||||||||||||
| Prior Years: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | (0.1) | (0.2) | 0.2 | (2.5) | 0.3 | 2.0 | (0.8) | (4.3) | (2.6) | (2.8) | ||||||||||||||||||||
| Catastrophe Losses and LAE | (2.1) | 0.1 | (1.8) | (0.1) | 0.6 | 0.2 | 0.6 | (0.7) | (3.9) | 0.7 | ||||||||||||||||||||
| Total Incurred Losses and LAE | 26.6 | 46.9 | 50.7 | 43.6 | 17.3 | 88.9 | 43.4 | 28.2 | 167.8 | 177.8 | ||||||||||||||||||||
| Insurance Expenses | 16.3 | 16.3 | 16.1 | 15.7 | 16.6 | 18.2 | 18.6 | 19.5 | 64.4 | 72.9 | ||||||||||||||||||||
| Operating Income (Loss) | 16.2 | (5.9) | (6.9) | (2.7) | 24.4 | (48.3) | (4.8) | 12.7 | 0.7 | (16.0) | ||||||||||||||||||||
| Income Tax Benefit (Expense) | (2.4) | 4.8 | 2.6 | 4.1 | (4.7) | 10.3 | 1.1 | (2.6) | 9.1 | 4.1 | ||||||||||||||||||||
| Total Product Line Net Operating Income (Loss) | $ | 13.8 | $ | (1.1) | $ | (4.3) | $ | 1.4 | $ | 19.7 | $ | (38.0) | $ | (3.7) | $ | 10.1 | $ | 9.8 | $ | (11.9) | ||||||||||
| Ratios Based On Earned Premiums | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 43.3 | % | 50.6 | % | 59.4 | % | 47.6 | % | 49.7 | % | 51.1 | % | 45.7 | % | 50.5 | % | 50.2 | % | 49.3 | % | ||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 11.4 | 38.9 | 42.5 | 43.3 | (18.9) | 106.5 | 32.7 | 7.9 | 33.9 | 32.3 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | (0.2) | (0.4) | 0.4 | (4.9) | 0.6 | 3.6 | (1.4) | (7.6) | (1.3) | (1.3) | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (4.0) | 0.2 | (3.5) | (0.2) | 1.1 | 0.4 | 1.1 | (1.2) | (1.9) | 0.3 | ||||||||||||||||||||
| Total Incurred Loss and LAE Ratio | 50.5 | 89.3 | 98.8 | 85.8 | 32.5 | 161.6 | 78.1 | 49.6 | 80.9 | 80.6 | ||||||||||||||||||||
| Insurance Expense Ratio | 30.9 | 31.0 | 31.4 | 30.9 | 31.1 | 33.1 | 33.5 | 34.3 | 31.1 | 33.0 | ||||||||||||||||||||
| Combined Ratio | 81.4 | % | 120.3 | % | 130.2 | % | 116.7 | % | 63.6 | % | 194.7 | % | 111.6 | % | 83.9 | % | 112.0 | % | 113.6 | % | ||||||||||
| Underlying Combined Ratio 1 | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 43.3 | % | 50.6 | % | 59.4 | % | 47.6 | % | 49.7 | % | 51.1 | % | 45.7 | % | 50.5 | % | 50.2 | % | 49.3 | % | ||||||||||
| Insurance Expense Ratio | 30.9 | 31.0 | 31.4 | 30.9 | 31.1 | 33.1 | 33.5 | 34.3 | 31.1 | 33.0 | ||||||||||||||||||||
| Underlying Combined Ratio | 74.2 | % | 81.6 | % | 90.8 | % | 78.5 | % | 80.8 | % | 84.2 | % | 79.2 | % | 84.8 | % | 81.3 | % | 82.3 | % | ||||||||||
| Non-GAAP Measure Reconciliation | ||||||||||||||||||||||||||||||
| Combined Ratio | 81.4 | % | 120.3 | % | 130.2 | % | 116.7 | % | 63.6 | % | 194.7 | % | 111.6 | % | 83.9 | % | 112.0 | % | 113.6 | % | ||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 11.4 | 38.9 | 42.5 | 43.3 | (18.9) | 106.5 | 32.7 | 7.9 | 33.9 | 32.3 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | (0.2) | (0.4) | 0.4 | (4.9) | 0.6 | 3.6 | (1.4) | (7.6) | (1.3) | (1.3) | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | (4.0) | 0.2 | (3.5) | (0.2) | 1.1 | 0.4 | 1.1 | (1.2) | (1.9) | 0.3 | ||||||||||||||||||||
| Underlying Combined Ratio | 74.2 | % | 81.6 | % | 90.8 | % | 78.5 | % | 80.8 | % | 84.2 | % | 79.2 | % | 84.8 | % | 81.3 | % | 82.3 | % | ||||||||||
| 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. |
Kemper Corporation
Preferred Property & Casualty Insurance Segment
Other Personal Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Results of Operations | ||||||||||||||||||||||||||||||
| Net Premiums Written | $ | 8.1 | $ | 8.8 | $ | 8.9 | $ | 7.9 | $ | 8.1 | $ | 9.3 | $ | 8.7 | $ | 8.3 | $ | 33.7 | $ | 34.4 | ||||||||||
| Earned Premiums | $ | 8.5 | $ | 8.6 | $ | 8.4 | $ | 8.4 | $ | 8.8 | $ | 8.9 | $ | 8.9 | $ | 9.2 | $ | 33.9 | $ | 35.8 | ||||||||||
| Net Investment Income | 0.9 | 0.8 | 0.9 | 0.8 | 0.5 | 0.4 | 0.2 | 0.3 | 3.4 | 1.4 | ||||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (0.2) | (0.3) | (0.1) | (0.2) | — | — | — | — | (0.8) | — | ||||||||||||||||||||
| Total Revenues | 9.2 | 9.1 | 9.2 | 9.0 | 9.3 | 9.3 | 9.1 | 9.5 | 36.5 | 37.2 | ||||||||||||||||||||
| Incurred Losses and LAE related to: | ||||||||||||||||||||||||||||||
| Current Year: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 3.4 | 4.2 | 4.1 | 4.2 | 2.6 | 2.5 | 3.3 | 3.9 | 15.9 | 12.3 | ||||||||||||||||||||
| Catastrophe Losses and LAE | 0.2 | 0.3 | (0.4) | 1.4 | 4.4 | 1.5 | 0.4 | 0.1 | 1.5 | 6.4 | ||||||||||||||||||||
| Prior Years: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 1.2 | 0.1 | 1.2 | 1.4 | (0.7) | (1.6) | (0.7) | (1.2) | 3.9 | (4.2) | ||||||||||||||||||||
| Catastrophe Losses and LAE | 0.2 | (0.1) | (1.4) | (0.3) | (0.1) | 0.1 | 0.1 | (0.3) | (1.6) | (0.2) | ||||||||||||||||||||
| Total Incurred Losses and LAE | 5.0 | 4.5 | 3.5 | 6.7 | 6.2 | 2.5 | 3.1 | 2.5 | 19.7 | 14.3 | ||||||||||||||||||||
| Insurance Expenses | 2.6 | 2.7 | 2.4 | 2.5 | 2.5 | 2.6 | 2.9 | 3.1 | 10.2 | 11.1 | ||||||||||||||||||||
| Operating Income (Loss) | 1.6 | 1.9 | 3.3 | (0.2) | 0.6 | 4.2 | 3.1 | 3.9 | 6.6 | 11.8 | ||||||||||||||||||||
| Income Tax Benefit (Expense) | (0.2) | — | (0.6) | 0.4 | (0.1) | (0.9) | (0.6) | (0.8) | (0.4) | (2.4) | ||||||||||||||||||||
| Total Product Line Net Operating Income (Loss) | $ | 1.4 | $ | 1.9 | $ | 2.7 | $ | 0.2 | $ | 0.5 | $ | 3.3 | $ | 2.5 | $ | 3.1 | $ | 6.2 | $ | 9.4 | ||||||||||
| Ratios Based On Earned Premiums | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 39.9 | % | 48.8 | % | 48.9 | % | 50.0 | % | 29.6 | % | 28.1 | % | 37.1 | % | 42.4 | % | 46.9 | % | 34.3 | % | ||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 2.4 | 3.5 | (4.8) | 16.7 | 50.0 | 16.9 | 4.5 | 1.1 | 4.4 | 17.9 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 14.1 | 1.2 | 14.3 | 16.7 | (8.0) | (18.0) | (7.9) | (13.0) | 11.5 | (11.7) | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | 2.4 | (1.2) | (16.7) | (3.6) | (1.1) | 1.1 | 1.1 | (3.3) | (4.7) | (0.6) | ||||||||||||||||||||
| Total Incurred Loss and LAE Ratio | 58.8 | 52.3 | 41.7 | 79.8 | 70.5 | 28.1 | 34.8 | 27.2 | 58.1 | 39.9 | ||||||||||||||||||||
| Insurance Expense Ratio | 30.6 | 31.4 | 28.6 | 29.8 | 28.4 | 29.2 | 32.6 | 33.7 | 30.1 | 31.0 | ||||||||||||||||||||
| Combined Ratio | 89.4 | % | 83.7 | % | 70.3 | % | 109.6 | % | 98.9 | % | 57.3 | % | 67.4 | % | 60.9 | % | 88.2 | % | 70.9 | % | ||||||||||
| Underlying Combined Ratio 1 | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 39.9 | % | 48.8 | % | 48.9 | % | 50.0 | % | 29.6 | % | 28.1 | % | 37.1 | % | 42.4 | % | 46.9 | % | 34.3 | % | ||||||||||
| Insurance Expense Ratio | 30.6 | 31.4 | 28.6 | 29.8 | 28.4 | 29.2 | 32.6 | 33.7 | 30.1 | 31.0 | ||||||||||||||||||||
| Underlying Combined Ratio | 70.5 | % | 80.2 | % | 77.5 | % | 79.8 | % | 58.0 | % | 57.3 | % | 69.7 | % | 76.1 | % | 77.0 | % | 65.3 | % | ||||||||||
| Non-GAAP Measure Reconciliation | ||||||||||||||||||||||||||||||
| Combined Ratio | 89.4 | % | 83.7 | % | 70.3 | % | 109.6 | % | 98.9 | % | 57.3 | % | 67.4 | % | 60.9 | % | 88.2 | % | 70.9 | % | ||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 2.4 | 3.5 | (4.8) | 16.7 | 50.0 | 16.9 | 4.5 | 1.1 | 4.4 | 17.9 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | 14.1 | 1.2 | 14.3 | 16.7 | (8.0) | (18.0) | (7.9) | (13.0) | 11.5 | (11.7) | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | 2.4 | (1.2) | (16.7) | (3.6) | (1.1) | 1.1 | 1.1 | (3.3) | (4.7) | (0.6) | ||||||||||||||||||||
| Underlying Combined Ratio | 70.5 | % | 80.2 | % | 77.5 | % | 79.8 | % | 58.0 | % | 57.3 | % | 69.7 | % | 76.1 | % | 77.0 | % | 65.3 | % | ||||||||||
| 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. |
Kemper Corporation
Life & Health Insurance Segment
Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||
| Results of Operations | ||||||||||||||||||||
| Earned Premiums | $ | 164.2 | $ | 164.1 | $ | 164.2 | $ | 161.0 | $ | 162.4 | $ | 160.6 | $ | 162.7 | $ | 163.0 | $ | 653.5 | $ | 648.7 |
| Net Investment Income | 50.8 | 48.4 | 52.4 | 51.1 | 52.8 | 50.7 | 44.3 | 51.0 | 202.7 | 198.8 | ||||||||||
| Change in Value of Alternative Energy Partnership Investments | (3.7) | (6.1) | (2.0) | (4.0) | — | — | — | — | (15.8) | — | ||||||||||
| Other Income | (1.6) | 0.1 | 0.1 | 0.1 | — | — | 0.5 | 0.1 | (1.3) | 0.6 | ||||||||||
| Total Revenues | 209.7 | 206.5 | 214.7 | 208.2 | 215.2 | 211.3 | 207.5 | 214.1 | 839.1 | 848.1 | ||||||||||
| Policyholders’ Benefits and Incurred Losses and LAE | 116.2 | 119.5 | 115.3 | 118.7 | 121.8 | 113.6 | 105.9 | 100.7 | 469.7 | 442.0 | ||||||||||
| Insurance Expenses | 89.5 | 92.9 | 86.2 | 90.3 | 83.8 | 82.5 | 81.7 | 86.9 | 358.9 | 334.9 | ||||||||||
| Operating Income (Loss) | 4.0 | (5.9) | 13.2 | (0.8) | 9.6 | 15.2 | 19.9 | 26.5 | 10.5 | 71.2 | ||||||||||
| Income Tax Benefit (Expense) | 1.1 | 8.7 | (0.2) | 8.1 | (0.2) | (3.0) | (3.8) | (4.2) | 17.7 | (11.2) | ||||||||||
| Segment Net Operating Income (Loss) | $ | 5.1 | $ | 2.8 | $ | 13.0 | $ | 7.3 | $ | 9.4 | $ | 12.2 | $ | 16.1 | $ | 22.3 | $ | 28.2 | $ | 60.0 |
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31,<br>2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Insurance Reserves: | ||||||||||||||||||||
| Future Policyholder Benefits | $ | 3,454.1 | $ | 3,436.1 | $ | 3,466.4 | $ | 3,448.0 | $ | 3,440.5 | $ | 3,426.4 | $ | 3,407.0 | $ | 3,397.1 | ||||
| Incurred Losses and LAE Reserves: | ||||||||||||||||||||
| Life | 60.7 | 62.3 | 58.8 | 68.1 | 61.1 | 59.0 | 61.6 | 75.5 | ||||||||||||
| Accident and Health | 26.1 | 25.7 | 26.4 | 25.5 | 25.9 | 26.1 | 29.1 | 28.2 | ||||||||||||
| Property | 3.6 | 7.4 | 4.4 | 5.4 | 4.6 | 5.1 | 3.8 | 3.1 | ||||||||||||
| Total Incurred Losses and LAE Reserves | 90.4 | 95.4 | 89.6 | 99.0 | 91.6 | 90.2 | 94.5 | 106.8 | ||||||||||||
| Insurance Reserves | $ | 3,544.5 | $ | 3,531.5 | $ | 3,556.0 | $ | 3,547.0 | $ | 3,532.1 | $ | 3,516.6 | $ | 3,501.5 | $ | 3,503.9 |
Kemper Corporation
Life & Health Insurance Segment
Life Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||
| Results of Operations | ||||||||||||||||||||
| Earned Premiums | $ | 101.5 | $ | 101.5 | $ | 100.6 | $ | 98.1 | $ | 96.5 | $ | 96.3 | $ | 95.7 | $ | 97.2 | $ | 401.7 | $ | 385.7 |
| Net Investment Income | 49.3 | 47.0 | 50.9 | 49.6 | 52.3 | 47.5 | 44.8 | 48.7 | 196.8 | 193.3 | ||||||||||
| Change in Value of Alternative Energy Partnership Investments | (3.5) | (5.8) | (1.9) | (3.8) | — | — | — | — | (15.0) | — | ||||||||||
| Other Income | (1.6) | — | — | — | (0.1) | — | 0.1 | — | (1.6) | — | ||||||||||
| Total Revenues | 145.7 | 142.7 | 149.6 | 143.9 | 148.7 | 143.8 | 140.6 | 145.9 | 581.9 | 579.0 | ||||||||||
| Policyholders’ Benefits and Incurred Losses and LAE | 88.2 | 87.3 | 81.9 | 87.9 | 89.4 | 84.0 | 76.7 | 68.1 | 345.3 | 318.2 | ||||||||||
| Insurance Expenses | 60.5 | 61.5 | 55.6 | 58.0 | 52.9 | 54.7 | 50.9 | 60.3 | 235.6 | 218.8 | ||||||||||
| Operating Income (Loss) | (3.0) | (6.1) | 12.1 | (2.0) | 6.4 | 5.1 | 13.0 | 17.5 | 1.0 | 42.0 | ||||||||||
| Income Tax Benefit (Expense) | 2.4 | 8.4 | (0.1) | 8.0 | 0.3 | (0.8) | (2.4) | (2.3) | 18.7 | (5.2) | ||||||||||
| Total Product Line Operating Income (Loss) | $ | (0.6) | $ | 2.3 | $ | 12.0 | $ | 6.0 | $ | 6.7 | $ | 4.3 | $ | 10.6 | $ | 15.2 | $ | 19.7 | $ | 36.8 |
Kemper Corporation
Life & Health Insurance Segment
Accident & Health Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||
| Results of Operations | ||||||||||||||||||||
| Earned Premiums | $ | 47.6 | $ | 47.0 | $ | 47.9 | $ | 47.4 | $ | 50.2 | $ | 48.9 | $ | 50.8 | $ | 49.4 | $ | 189.9 | $ | 199.3 |
| Net Investment Income | 0.9 | 0.9 | 0.8 | 1.0 | 0.3 | 3.1 | (0.4) | 2.0 | 3.6 | 5.0 | ||||||||||
| Change in Value of Alternative Energy Partnership Investments | (0.1) | (0.1) | — | (0.1) | — | — | — | — | (0.3) | — | ||||||||||
| Other Income | — | 0.1 | 0.1 | 0.1 | 0.1 | — | 0.4 | 0.1 | 0.3 | 0.6 | ||||||||||
| Total Revenues | 48.4 | 47.9 | 48.8 | 48.4 | 50.6 | 52.0 | 50.8 | 51.5 | 193.5 | 204.9 | ||||||||||
| Policyholders’ Benefits and Incurred Losses and LAE | 21.9 | 22.9 | 26.8 | 24.5 | 24.5 | 20.7 | 22.0 | 28.1 | 96.1 | 95.3 | ||||||||||
| Insurance Expenses | 21.5 | 23.5 | 22.2 | 24.4 | 25.1 | 22.1 | 24.6 | 20.1 | 91.6 | 91.9 | ||||||||||
| Operating Income (Loss) | 5.0 | 1.5 | (0.2) | (0.5) | 1.0 | 9.2 | 4.2 | 3.3 | 5.8 | 17.7 | ||||||||||
| Income Tax Benefit (Expense) | (1.0) | (0.2) | 0.1 | 0.2 | — | (2.0) | (0.9) | (0.7) | (0.9) | (3.6) | ||||||||||
| Total Product Line Net Operating Income (Loss) | $ | 4.0 | $ | 1.3 | $ | (0.1) | $ | (0.3) | $ | 1.0 | $ | 7.2 | $ | 3.3 | $ | 2.6 | $ | 4.9 | $ | 14.1 |
Kemper Corporation
Life & Health Insurance Segment
Property Insurance - Results of Operations and Selected Financial Information
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Results of Operations | ||||||||||||||||||||||||||||||
| Earned Premiums | $ | 15.1 | $ | 15.6 | $ | 15.7 | $ | 15.5 | $ | 15.7 | $ | 15.4 | $ | 16.2 | $ | 16.4 | $ | 61.9 | $ | 63.7 | ||||||||||
| Net Investment Income | 0.6 | 0.5 | 0.7 | 0.5 | 0.2 | 0.1 | (0.1) | 0.3 | 2.3 | 0.5 | ||||||||||||||||||||
| Change in Value of Alternative Energy Partnership Investments | (0.1) | (0.2) | (0.1) | (0.1) | — | — | — | — | (0.5) | — | ||||||||||||||||||||
| Total Revenues | 15.6 | 15.9 | 16.3 | 15.9 | 15.9 | 15.5 | 16.1 | 16.7 | 63.7 | 64.2 | ||||||||||||||||||||
| Incurred Losses and LAE related to: | ||||||||||||||||||||||||||||||
| Current Year: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | 3.2 | 3.6 | 4.2 | 3.2 | 2.5 | 5.2 | 3.5 | 4.0 | 14.2 | 15.2 | ||||||||||||||||||||
| Catastrophe Losses and LAE | 2.9 | 5.7 | 2.5 | 1.9 | 5.3 | 3.1 | 3.2 | 0.8 | 13.0 | 12.4 | ||||||||||||||||||||
| Prior Years: | ||||||||||||||||||||||||||||||
| Non-catastrophe Losses and LAE | — | 0.4 | 0.1 | 0.7 | 0.1 | 0.4 | 0.3 | (0.4) | 1.2 | 0.4 | ||||||||||||||||||||
| Catastrophe Losses and LAE | — | (0.4) | (0.2) | 0.5 | — | 0.2 | 0.2 | 0.1 | (0.1) | 0.5 | ||||||||||||||||||||
| Total Incurred Losses and LAE | 6.1 | 9.3 | 6.6 | 6.3 | 7.9 | 8.9 | 7.2 | 4.5 | 28.3 | 28.5 | ||||||||||||||||||||
| Insurance Expenses | 7.5 | 7.9 | 8.4 | 7.9 | 5.8 | 5.7 | 6.2 | 6.5 | 31.7 | 24.2 | ||||||||||||||||||||
| Operating Income (Loss) | 2.0 | (1.3) | 1.3 | 1.7 | 2.2 | 0.9 | 2.7 | 5.7 | 3.7 | 11.5 | ||||||||||||||||||||
| Income Tax Benefit (Expense) | (0.3) | 0.5 | (0.2) | (0.1) | (0.5) | (0.2) | (0.5) | (1.2) | (0.1) | (2.4) | ||||||||||||||||||||
| Total Product Line Net Operating Income (Loss) | $ | 1.7 | $ | (0.8) | $ | 1.1 | $ | 1.6 | $ | 1.7 | $ | 0.7 | $ | 2.2 | $ | 4.5 | $ | 3.6 | $ | 9.1 | ||||||||||
| Ratios Based On Earned Premiums | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 21.2 | % | 23.1 | % | 26.8 | % | 20.6 | % | 15.9 | % | 33.8 | % | 21.5 | % | 24.3 | % | 23.0 | % | 23.8 | % | ||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 19.2 | 36.5 | 15.9 | 12.3 | 33.8 | 20.1 | 19.8 | 4.9 | 21.0 | 19.5 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | — | 2.6 | 0.6 | 4.5 | 0.6 | 2.6 | 1.9 | (2.4) | 1.9 | 0.6 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | (2.6) | (1.3) | 3.2 | — | 1.3 | 1.2 | 0.6 | (0.2) | 0.8 | ||||||||||||||||||||
| Total Incurred Loss and LAE Ratio | 40.4 | 59.6 | 42.0 | 40.6 | 50.3 | 57.8 | 44.4 | 27.4 | 45.7 | 44.7 | ||||||||||||||||||||
| Insurance Expense Ratio | 49.7 | 50.6 | 53.5 | 51.0 | 36.9 | 37.0 | 38.3 | 39.6 | 51.2 | 38.0 | ||||||||||||||||||||
| Combined Ratio | 90.1 | % | 110.2 | % | 95.5 | % | 91.6 | % | 87.2 | % | 94.8 | % | 82.7 | % | 67.0 | % | 96.9 | % | 82.7 | % | ||||||||||
| Underlying Combined Ratio 1 | ||||||||||||||||||||||||||||||
| Current Year Non-catastrophe Losses and LAE Ratio | 21.2 | % | 23.1 | % | 26.8 | % | 20.6 | % | 15.9 | % | 33.8 | % | 21.5 | % | 24.3 | % | 23.0 | % | 23.8 | % | ||||||||||
| Insurance Expense Ratio | 49.7 | 50.6 | 53.5 | 51.0 | 36.9 | 37.0 | 38.3 | 39.6 | 51.2 | 38.0 | ||||||||||||||||||||
| Underlying Combined Ratio | 70.9 | % | 73.7 | % | 80.3 | % | 71.6 | % | 52.8 | % | 70.8 | % | 59.8 | % | 63.9 | % | 74.2 | % | 61.8 | % | ||||||||||
| Non-GAAP Measure Reconciliation | ||||||||||||||||||||||||||||||
| Combined Ratio | 90.1 | % | 110.2 | % | 95.5 | % | 91.6 | % | 87.2 | % | 94.8 | % | 82.7 | % | 67.0 | % | 96.9 | % | 82.7 | % | ||||||||||
| Less: | ||||||||||||||||||||||||||||||
| Current Year Catastrophe Losses and LAE Ratio | 19.2 | 36.5 | 15.9 | 12.3 | 33.8 | 20.1 | 19.8 | 4.9 | 21.0 | 19.5 | ||||||||||||||||||||
| Prior Years Non-catastrophe Losses and LAE Ratio | — | 2.6 | 0.6 | 4.5 | 0.6 | 2.6 | 1.9 | (2.4) | 1.9 | 0.6 | ||||||||||||||||||||
| Prior Years Catastrophe Losses and LAE Ratio | — | (2.6) | (1.3) | 3.2 | — | 1.3 | 1.2 | 0.6 | (0.2) | 0.8 | ||||||||||||||||||||
| Underlying Combined Ratio | 70.9 | % | 73.7 | % | 80.3 | % | 71.6 | % | 52.8 | % | 70.8 | % | 59.8 | % | 63.9 | % | 74.2 | % | 61.8 | % | ||||||||||
| 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. |
Kemper Corporation
Expenses
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||
| Insurance Expenses: | ||||||||||||||||||||
| Commissions | $ | 192.3 | $ | 210.0 | $ | 220.1 | $ | 195.2 | $ | 183.3 | $ | 195.5 | $ | 178.2 | $ | 188.8 | $ | 817.6 | $ | 745.8 |
| General Expenses | 87.5 | 85.1 | 82.3 | 84.6 | 83.1 | 74.6 | 79.2 | 70.5 | 339.5 | 307.4 | ||||||||||
| Premium Taxes | 25.2 | 26.5 | 27.2 | 25.4 | 23.0 | 23.3 | 23.1 | 24.8 | 104.3 | 94.2 | ||||||||||
| Total Costs Incurred | 305.0 | 321.6 | 329.6 | 305.2 | 289.4 | 293.4 | 280.5 | 284.1 | 1,261.4 | 1,147.4 | ||||||||||
| Net Policy Acquisition Costs Deferred | (1.0) | (23.8) | (41.1) | (22.4) | (11.1) | (17.4) | (9.3) | (13.8) | (88.3) | (51.6) | ||||||||||
| Amortization of Valuation of Business Acquired ("VOBA") | 5.1 | 13.5 | 25.5 | 0.9 | 1.0 | 0.9 | 1.5 | 1.3 | 45.0 | 4.7 | ||||||||||
| Insurance Expenses | 309.1 | 311.3 | 314.0 | 283.7 | 279.3 | 276.9 | 272.7 | 271.6 | 1,218.1 | 1,100.5 | ||||||||||
| Interest and Other Expenses: | ||||||||||||||||||||
| Interest Expense | 10.6 | 10.7 | 11.2 | 11.1 | 11.3 | 8.3 | 8.9 | 7.5 | 43.6 | 36.0 | ||||||||||
| Other Expenses: | ||||||||||||||||||||
| Acquisition Related Transaction, Integration and Other Costs | 9.2 | 8.0 | 10.4 | 16.3 | 20.0 | 14.4 | 17.1 | 11.8 | 43.9 | 63.3 | ||||||||||
| Pension Settlement Expense | — | — | — | — | 64.1 | — | — | — | — | 64.1 | ||||||||||
| Other | 36.4 | 33.2 | 32.5 | 29.8 | 33.4 | 24.5 | 25.0 | 25.2 | 131.9 | 108.1 | ||||||||||
| Other Expenses | 45.6 | 41.2 | 42.9 | 46.1 | 117.5 | 38.9 | 42.1 | 37.0 | 175.8 | 235.5 | ||||||||||
| Interest and Other Expenses | 56.2 | 51.9 | 54.1 | 57.2 | 128.8 | 47.2 | 51.0 | 44.5 | 219.4 | 271.5 | ||||||||||
| Total Expenses | $ | 365.3 | $ | 363.2 | $ | 368.1 | $ | 340.9 | $ | 408.1 | $ | 324.1 | $ | 323.7 | $ | 316.1 | $ | 1,437.5 | $ | 1,372.0 |
Kemper Corporation
Details of Investment Performance
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||
| Net Investment Income | ||||||||||||||||||||
| Interest on Fixed Income Securities | $ | 70.6 | $ | 68.4 | $ | 69.7 | $ | 69.0 | $ | 71.8 | $ | 72.7 | $ | 74.3 | $ | 71.0 | $ | 277.7 | $ | 289.8 |
| Dividends on Equity Securities Excluding Alternative Investments | 6.1 | 2.9 | 4.8 | 2.1 | 4.7 | 2.8 | 3.6 | 4.3 | 15.9 | 15.4 | ||||||||||
| Alternative Investments: | ||||||||||||||||||||
| Equity Method Limited Liability Investments | 5.8 | 12.0 | 16.4 | 22.5 | 7.6 | 8.2 | (12.7) | 1.8 | 56.7 | 4.9 | ||||||||||
| Limited Liability Investments Included in Equity Securities | 17.6 | 9.5 | 15.3 | 4.5 | 14.8 | 2.4 | 1.1 | 3.8 | 46.9 | 22.1 | ||||||||||
| Total Alternative Investments | 23.4 | 21.5 | 31.7 | 27.0 | 22.4 | 10.6 | (11.6) | 5.6 | 103.6 | 27.0 | ||||||||||
| Short-term Investments | 0.4 | 0.2 | (0.8) | 1.2 | 1.3 | 2.3 | 0.3 | 1.6 | 1.0 | 5.5 | ||||||||||
| Loans to Policyholders | 5.4 | 5.4 | 5.4 | 5.5 | 5.5 | 5.5 | 5.5 | 5.6 | 21.7 | 22.1 | ||||||||||
| Real Estate | 2.2 | 2.3 | 2.4 | 2.4 | 2.5 | 2.3 | 2.3 | 2.5 | 9.3 | 9.6 | ||||||||||
| Other | 9.3 | 9.1 | 9.3 | 4.7 | 3.9 | 2.7 | 2.4 | 4.2 | 32.4 | 13.2 | ||||||||||
| Total Investment Income | 117.4 | 109.8 | 122.5 | 111.9 | 112.1 | 98.9 | 76.8 | 94.8 | 461.6 | 382.6 | ||||||||||
| Investment Expenses: | ||||||||||||||||||||
| Real Estate | 2.9 | 2.6 | 2.1 | 2.1 | 2.3 | 1.2 | 2.7 | 2.6 | 9.7 | 8.8 | ||||||||||
| Other Investment Expenses | 6.1 | 5.3 | 6.5 | 6.7 | 7.1 | 5.6 | 6.3 | 6.6 | 24.6 | 25.6 | ||||||||||
| Total Investment Expenses | 9.0 | 7.9 | 8.6 | 8.8 | 9.4 | 6.8 | 9.0 | 9.2 | 34.3 | 34.4 | ||||||||||
| Net Investment Income | $ | 108.4 | $ | 101.9 | $ | 113.9 | $ | 103.1 | $ | 102.7 | $ | 92.1 | $ | 67.8 | $ | 85.6 | $ | 427.3 | $ | 348.2 |
| Net Realized Gains (Losses) on Sales of Investments | ||||||||||||||||||||
| Fixed Maturities: | ||||||||||||||||||||
| Gains on Sales | $ | 20.7 | $ | 10.3 | $ | 19.2 | $ | 13.2 | $ | 1.9 | $ | 11.9 | $ | 10.9 | $ | 15.9 | $ | 63.4 | $ | 40.6 |
| Losses on Sales | (0.4) | (0.4) | (0.2) | (1.1) | (4.4) | (1.9) | (0.5) | (1.1) | (2.1) | (7.9) | ||||||||||
| Equity Securities: | ||||||||||||||||||||
| Gains on Sales | 2.3 | 0.1 | — | 1.7 | 4.4 | 0.1 | 0.1 | 1.3 | 4.1 | 5.9 | ||||||||||
| Losses on Sales | (0.5) | (0.2) | — | — | (1.7) | — | — | (0.2) | (0.7) | (1.9) | ||||||||||
| Equity Method Limited Liability Investments: | ||||||||||||||||||||
| Gains on Sales | — | 0.4 | — | — | — | — | — | — | 0.4 | — | ||||||||||
| Losses on Sales | — | — | — | — | (0.3) | (0.1) | — | — | — | (0.4) | ||||||||||
| Real Estate: | ||||||||||||||||||||
| Gains on Sales | — | (0.1) | 0.2 | — | — | — | 1.2 | 0.6 | 0.1 | 1.8 | ||||||||||
| Losses on Sales | (0.4) | — | — | — | — | — | — | — | (0.4) | — | ||||||||||
| Net Realized Gains (Losses) on Sales of Investments | $ | 21.7 | $ | 10.1 | $ | 19.2 | $ | 13.8 | $ | (0.1) | $ | 10.0 | $ | 11.7 | $ | 16.5 | $ | 64.8 | $ | 38.1 |
| Net Impairment Losses Recognized in Earnings | ||||||||||||||||||||
| Fixed Maturities | $ | (3.1) | $ | 0.5 | $ | (0.6) | $ | (3.2) | $ | 1.3 | $ | (1.0) | $ | (7.0) | $ | (10.0) | $ | (6.4) | $ | (16.7) |
| Equity Securities | (0.1) | (0.7) | (2.6) | (0.8) | (0.8) | — | — | (2.0) | (4.2) | (2.8) | ||||||||||
| Real Estate | — | (0.4) | — | — | — | — | — | — | (0.4) | — | ||||||||||
| Net Impairment Losses Recognized in Earnings | $ | (3.2) | $ | (0.6) | $ | (3.2) | $ | (4.0) | $ | 0.5 | $ | (1.0) | $ | (7.0) | $ | (12.0) | $ | (11.0) | $ | (19.5) |
Kemper Corporation
Details of Invested Assets
(Dollars in Millions)
(Unaudited)
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Carrying<br>Value | Percent<br><br>of Total1 | Carrying<br>Value | Percent<br><br>of Total1 | Carrying<br>Value | Percent<br><br>of Total1 | |||||||
| Fixed Maturities Reported at Fair Value: | ||||||||||||
| U.S. Government and Government Agencies and Authorities | $ | 637.4 | 6.1 | % | $ | 585.3 | 5.6 | % | $ | 815.9 | 8.8 | % |
| States and Political Subdivisions | 1,890.1 | 18.2 | 1,589.5 | 15.2 | 1,515.8 | 16.4 | ||||||
| Foreign Governments | 5.5 | 0.1 | 5.2 | — | 16.8 | 0.2 | ||||||
| Corporate Securities: | ||||||||||||
| Bonds and Notes | 4,386.9 | 42.2 | 4,425.4 | 42.5 | 3,859.7 | 41.7 | ||||||
| Redeemable Preferred Stocks | 7.4 | 0.1 | 7.5 | 0.1 | 6.7 | 0.1 | ||||||
| Collateralized Loan Obligations | 752.1 | 7.2 | 767.7 | 7.4 | 618.2 | 6.7 | ||||||
| Other Mortgage- and Asset-backed | 307.5 | 3.0 | 225.3 | 2.2 | 89.0 | 1.0 | ||||||
| Total Fixed Maturities Reported at Fair Value | 7,986.9 | 76.9 | 7,605.9 | 73.0 | 6,922.1 | 74.7 | ||||||
| Equity Securities Reported at Fair Value: | ||||||||||||
| Preferred Stocks | 51.8 | 0.5 | 59.1 | 0.6 | 59.2 | 0.6 | ||||||
| Common Stocks | 21.8 | 0.2 | 10.8 | 0.1 | 13.2 | 0.1 | ||||||
| Other Equity Interests: | ||||||||||||
| Exchange Traded Funds | 432.0 | 4.2 | 496.6 | 4.8 | 586.8 | 6.3 | ||||||
| Limited Liability Companies and Limited Partnerships | 325.0 | 3.1 | 292.0 | 2.8 | 248.1 | 2.7 | ||||||
| Total Equity Securities Reported at Fair Value | 830.6 | 8.0 | 858.5 | 8.2 | 907.3 | 9.8 | ||||||
| Equity Securities Reported at Modified Cost: | ||||||||||||
| Preferred Stocks | 7.1 | 0.1 | 8.1 | 0.1 | 9.1 | 0.1 | ||||||
| Common Stocks | 17.4 | 0.2 | 16.3 | 0.2 | 12.3 | 0.1 | ||||||
| Limited Liability Companies and Limited Partnerships | 7.8 | 0.1 | 15.7 | 0.2 | 20.5 | 0.2 | ||||||
| Total Equity Securities Reported at Modified Cost | 32.3 | 0.4 | 40.1 | 0.5 | 41.9 | 0.4 | ||||||
| Convertible Securities at Fair Value | 46.4 | 0.4 | 39.9 | 0.4 | 37.3 | 0.4 | ||||||
| Equity Method Limited Liability Investments | 241.9 | 2.3 | 204.0 | 2.0 | 220.4 | 2.4 | ||||||
| Alternative Energy Partnership Investments | 39.6 | 0.4 | 21.3 | 0.2 | — | — | ||||||
| Short-term Investments at Cost which Approximates Fair Value | 284.1 | 2.7 | 875.4 | 8.4 | 470.9 | 5.1 | ||||||
| Other Investments: | ||||||||||||
| Company Owned Life Insurance | 448.1 | 4.3 | 327.4 | 3.1 | 217.0 | 2.3 | ||||||
| Loans to Policyholders at Unpaid Principal | 286.2 | 2.8 | 297.9 | 2.9 | 305.6 | 3.3 | ||||||
| Real Estate at Depreciated Cost | 94.0 | 0.9 | 98.7 | 0.9 | 111.4 | 1.2 | ||||||
| Mortgage Loans | 96.8 | 0.9 | 54.6 | 0.5 | 27.5 | 0.3 | ||||||
| Other | 0.5 | — | 0.4 | — | — | — | ||||||
| Total Other Investments | 925.6 | 8.9 | 779.0 | 7.4 | 661.5 | 7.1 | ||||||
| Total Investments | $ | 10,387.4 | 100.0 | % | $ | 10,424.1 | 100.0 | % | $ | 9,261.4 | 100.0 | % |
| 1 Sum of percentages for individual lines may not equal subtotals and grand total due to rounding. |
Kemper Corporation
Details of Invested Assets (continued)
(Dollars in Millions)
(Unaudited)
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Carrying<br>Value | Percent<br><br>of Total1 | Carrying<br>Value | Percent<br><br>of Total1 | Carrying<br>Value | Percent<br><br>of Total1 | |||||||
| S&P Equivalent Rating for Fixed Maturities | ||||||||||||
| AAA, AA, A | $ | 5,351.6 | 67.0 | % | $ | 4,759.9 | 62.6 | % | $ | 4,387.1 | 63.4 | % |
| BBB | 2,215.1 | 27.7 | 2,355.6 | 31.0 | 2,044.1 | 29.5 | ||||||
| BB, B | 331.0 | 4.2 | 353.1 | 4.6 | 319.2 | 4.6 | ||||||
| CCC or Lower | 89.2 | 1.1 | 137.3 | 1.8 | 171.7 | 2.5 | ||||||
| Total Investments in Fixed Maturities | $ | 7,986.9 | 100.0 | % | $ | 7,605.9 | 100.0 | % | $ | 6,922.1 | 100.0 | % |
| Duration (in Years) | ||||||||||||
| Total Investments in Fixed Maturities | 8.5 | 7.8 | 7.1 | |||||||||
| 1 Sum of percentages for individual lines may not equal subtotals and grand total due to rounding. |
Kemper Corporation
Investment Concentration
(Dollars in Millions)
(Unaudited)
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair Value of Non-governmental Fixed Maturities by Industry | Amount | Percent<br>of Total<br>Investments | Amount | Percent<br>of Total<br>Investments | Amount | Percent<br>of Total<br>Investments | ||||||
| Finance, Insurance and Real Estate | $ | 1,996.7 | 19.2 | % | $ | 1,916.3 | 18.4 | % | $ | 1,522.8 | 16.4 | % |
| Manufacturing | 1,571.0 | 15.1 | 1,633.5 | 15.7 | 1,356.4 | 14.6 | ||||||
| Transportation, Communication and Utilities | 815.8 | 7.9 | 825.5 | 7.9 | 650.2 | 7.0 | ||||||
| Services | 617.5 | 5.9 | 581.3 | 5.6 | 604.4 | 6.5 | ||||||
| Mining | 254.3 | 2.4 | 285.7 | 2.7 | 154.5 | 1.7 | ||||||
| Retail Trade | 171.4 | 1.7 | 172.6 | 1.7 | 183.3 | 2.0 | ||||||
| Construction | 13.1 | 0.1 | — | — | — | — | ||||||
| Wholesale Trade | — | — | — | — | 72.9 | 0.8 | ||||||
| Agriculture, Forestry and Fishing | — | — | — | — | 12.4 | 0.1 | ||||||
| Other | 14.1 | 0.1 | 11.0 | 0.1 | 16.6 | 0.2 | ||||||
| Total Fair Value of Non-governmental Fixed Maturities | $ | 5,453.9 | 52.4 | % | $ | 5,425.9 | 52.1 | % | $ | 4,573.5 | 49.3 | % |
| Dec 31, 2021 | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| Ten Largest Investment Exposures 1 | Fair<br>Value | Percent<br>of Total<br>Investments | ||||||||||
| Fixed Maturities: | ||||||||||||
| States including their Political Subdivisions: | ||||||||||||
| Texas | $ | 151.4 | 1.5 | % | ||||||||
| California | 107.6 | 1.0 | ||||||||||
| Georgia | 98.0 | 0.9 | ||||||||||
| New York | 95.1 | 0.9 | ||||||||||
| Florida | 74.8 | 0.7 | ||||||||||
| Louisiana | 74.7 | 0.7 | ||||||||||
| Colorado | 70.8 | 0.7 | ||||||||||
| Pennsylvania | 68.6 | 0.7 | ||||||||||
| Equity Securities at Fair Value—Other Equity Interests: | ||||||||||||
| Vanguard Total World Stock ETF | 226.9 | 2.2 | ||||||||||
| iShares® Core MSCI Total International Stock ETF | 86.1 | 0.8 | ||||||||||
| Total | $ | 1,054.0 | 10.1 | % |
1Excluding Investments in U.S. Government and Government Agencies and Authorities at December 31, 2021.
Kemper Corporation
Municipal Bond Securities
(Dollars in Millions)
(Unaudited)
| Dec 31, 2021 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| State<br>General<br>Obligation | Political<br>Subdivision<br>General<br>Obligation | Revenue | Total Fair<br>Value | Percent<br><br>of Total<br><br>Muni Bond1 | Percent<br><br>of Total<br><br>Investments1 | |||||||
| Texas | $ | 23.7 | $ | 121.2 | $ | 6.5 | $ | 151.4 | 8.0 | % | 1.5 | % |
| California | 13.5 | 86.9 | 7.2 | 107.6 | 5.7 | 1.0 | ||||||
| Georgia | 8.4 | 84.2 | 5.4 | 98.0 | 5.2 | 0.9 | ||||||
| New York | 9.0 | 79.7 | 6.4 | 95.1 | 5.0 | 0.9 | ||||||
| Florida | — | 74.8 | — | 74.8 | 4.0 | 0.7 | ||||||
| Louisiana | 5.8 | 31.8 | 37.1 | 74.7 | 4.0 | 0.7 | ||||||
| Colorado | — | 70.8 | — | 70.8 | 3.7 | 0.7 | ||||||
| Pennsylvania | 3.8 | 58.7 | 6.1 | 68.6 | 3.6 | 0.7 | ||||||
| Washington | 1.7 | 42.6 | 18.4 | 62.7 | 3.3 | 0.6 | ||||||
| Virginia | 16.9 | 38.9 | 6.8 | 62.6 | 3.3 | 0.6 | ||||||
| Oregon | 2.9 | 27.1 | 32.3 | 62.3 | 3.3 | 0.6 | ||||||
| Massachusetts | 1.4 | 52.4 | 6.4 | 60.2 | 3.2 | 0.6 | ||||||
| Maryland | 8.3 | 44.8 | 2.0 | 55.1 | 2.9 | 0.5 | ||||||
| Michigan | — | 40.6 | 14.3 | 54.9 | 2.9 | 0.5 | ||||||
| Illinois | 0.7 | 47.3 | — | 48.0 | 2.5 | 0.5 | ||||||
| Minnesota | 2.3 | 42.9 | — | 45.2 | 2.4 | 0.4 | ||||||
| Ohio | — | 38.6 | 6.3 | 44.9 | 2.4 | 0.4 | ||||||
| Tennessee | 11.7 | 27.7 | 3.5 | 42.9 | 2.3 | 0.4 | ||||||
| New Mexico | — | 38.6 | — | 38.6 | 2.0 | 0.4 | ||||||
| Utah | — | 37.5 | — | 37.5 | 2.0 | 0.4 | ||||||
| Indiana | — | 37.0 | — | 37.0 | 2.0 | 0.4 | ||||||
| Missouri | 1.3 | 32.9 | — | 34.2 | 1.8 | 0.3 | ||||||
| Connecticut | — | 17.0 | 16.0 | 33.0 | 1.7 | 0.3 | ||||||
| District of Columbia | — | 24.6 | 6.9 | 31.5 | 1.7 | 0.3 | ||||||
| Rhode Island | — | 27.7 | 1.8 | 29.5 | 1.6 | 0.3 | ||||||
| Arizona | 0.8 | 24.7 | — | 25.5 | 1.3 | 0.2 | ||||||
| Mississippi | — | 10.6 | 14.7 | 25.3 | 1.3 | 0.2 | ||||||
| Hawaii | 4.5 | 4.0 | 16.0 | 24.5 | 1.3 | 0.2 | ||||||
| Nebraska | 8.2 | 12.8 | — | 21.0 | 1.1 | 0.2 | ||||||
| New Hampshire | 0.5 | 19.7 | — | 20.2 | 1.1 | 0.2 | ||||||
| South Carolina | — | 19.9 | — | 19.9 | 1.1 | 0.2 | ||||||
| North Carolina | 2.0 | 17.7 | — | 19.7 | 1.0 | 0.2 | ||||||
| Arkansas | — | — | 18.6 | 18.6 | 1.0 | 0.2 | ||||||
| Kentucky | — | 17.8 | — | 17.8 | 0.9 | 0.2 | ||||||
| Alaska | — | 17.6 | — | 17.6 | 0.9 | 0.2 | ||||||
| Iowa | — | 16.2 | — | 16.2 | 0.9 | 0.2 | ||||||
| Oklahoma | — | 15.6 | — | 15.6 | 0.8 | 0.2 | ||||||
| North Dakota | — | 13.7 | — | 13.7 | 0.7 | 0.1 | ||||||
| Delaware | 1.6 | 10.8 | — | 12.4 | 0.7 | 0.1 | ||||||
| All Other States | 9.0 | 88.9 | 3.1 | 101.0 | 5.3 | 1.0 | ||||||
| Total | $ | 138.0 | $ | 1,516.3 | $ | 235.8 | $ | 1,890.1 | 100.0 | % | 18.2 | % |
| 1 Sum of percentages for individual lines may not equal total due to rounding. |
Kemper Corporation
Investments in Limited Liability
Companies and Limited Partnerships
(Dollars in Millions)
(Unaudited)
| Unfunded<br>Commitment | Reported Value | |||||
|---|---|---|---|---|---|---|
| Asset Class | Dec 31,<br>2021 | Dec 31,<br>2021 | Dec 31, 2020 | |||
| Reported as Equity Method Limited Liability Investments: | ||||||
| Mezzanine Debt | $ | 43.3 | $ | 120.0 | $ | 102.5 |
| Senior Debt | 46.7 | 27.5 | 28.6 | |||
| Distressed Debt | 100.1 | 21.7 | 14.5 | |||
| Secondary Transactions | 8.3 | 11.7 | 11.2 | |||
| Leveraged Buyout | 0.1 | 8.7 | 3.5 | |||
| Growth Equity | — | 0.7 | 0.7 | |||
| Real Estate | — | 29.9 | 29.9 | |||
| Hedge Funds | — | 8.7 | — | |||
| Other | — | 13.0 | 13.1 | |||
| Total Equity Method Limited Liability Investments | 198.5 | 241.9 | 204.0 | |||
| Alternative Energy Partnership Investments | — | 39.6 | 21.3 | |||
| Reported as Other Equity Interests at Fair Value: | ||||||
| Mezzanine Debt | 53.7 | 129.3 | 118.3 | |||
| Senior Debt | 15.1 | 29.9 | 33.9 | |||
| Distressed Debt | 20.0 | 44.9 | 31.8 | |||
| Secondary Transactions | 6.8 | 4.0 | 4.2 | |||
| Hedge Funds | — | 82.7 | 71.6 | |||
| Leveraged Buyout | 6.0 | 32.2 | 30.7 | |||
| Growth Equity | 0.7 | 2.0 | — | |||
| Other | — | — | 1.5 | |||
| Total Reported as Other Equity Interests at Fair Value | 102.3 | 325.0 | 292.0 | |||
| Reported as Other Equity Interests at Modified Cost: | ||||||
| Other | — | 7.7 | 15.7 | |||
| Total Reported as Other Equity Interests at Modified Cost | — | 7.7 | 15.7 | |||
| Total Investments in Limited Liability Companies and Limited Partnerships | $ | 300.8 | $ | 614.2 | $ | 533.0 |
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:
(i) Income (Loss) from Change in Fair Value of Equity and Convertible Securities;
(ii) Net Realized Gains or Losses on Sales of Investments;
(iii) Impairment Losses;
(iv) Acquisition Related Transaction, Integration and Other Costs;
(v) Debt Extinguishment, Pension and Other Charges; and
(vi) Significant non-recurring or infrequent items that may not be indicative of ongoing operations
Significant non-recurring items are excluded when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, and (b) there has been no similar charge or gain within the prior two years. The most directly comparable GAAP financial measure is Net Income (Loss). There were no applicable significant non-recurring items that the Company excluded from the calculation of Adjusted Consolidated Net Operating Income for the twelve and three months ended December 31, 2021 or 2020.
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 or Losses 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 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. The preceding non-GAAP financial measures should not be considered a substitute for the comparable GAAP financial measures, as they do not fully recognize the overall profitability of the Company’s businesses.
Kemper Corporation
Definitions of Non-GAAP Financial Measures (continued)
A reconciliation of Net Income (Loss) to Adjusted Consolidated Net Operating Income is presented below:
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in Millions (Unaudited) | Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||||||||
| Net Income (Loss) | $ | (105.8) | $ | (75.3) | $ | (62.6) | $ | 123.2 | $ | 97.5 | $ | 122.3 | $ | 126.1 | $ | 64.0 | $ | (120.5) | $ | 409.9 |
| Less Net Income (Loss) From: | ||||||||||||||||||||
| Income (Loss) from Change in Fair Value of Equity and Convertible Securities | 17.5 | (0.5) | 32.3 | 41.2 | 57.8 | 35.7 | 56.6 | (93.1) | 90.5 | 57.0 | ||||||||||
| Net Realized Gains (Losses) on Sales of Investments | 17.2 | 7.9 | 15.2 | 10.9 | (0.1) | 7.9 | 9.3 | 13.0 | 51.2 | 30.1 | ||||||||||
| Impairment Losses | (2.5) | (0.5) | (2.5) | (3.2) | 0.4 | (0.8) | (5.5) | (9.5) | (8.7) | (15.4) | ||||||||||
| Acquisition Related Transaction, Integration and Other Costs | (7.2) | (6.4) | (8.2) | (12.9) | (15.8) | (11.4) | (13.5) | (9.3) | (34.7) | (50.0) | ||||||||||
| Debt Extinguishment, Pension and Other Charges | — | — | — | — | (50.6) | — | — | — | — | (50.6) | ||||||||||
| Adjusted Consolidated Net Operating Income (Loss) | $ | (130.8) | $ | (75.8) | $ | (99.4) | $ | 87.2 | $ | 105.8 | $ | 90.9 | $ | 79.2 | $ | 162.9 | $ | (218.8) | $ | 438.8 |
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 (Loss) Per Unrestricted Share ‐ basic. A reconciliation of Net Income (Loss) Per Unrestricted Share-basic to Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share-basic is presented below:
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Unaudited) | Dec 31,<br>2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | ||||||||||
| Net Income (Loss) Per Unrestricted Share | $ | (1.66) | $ | (1.18) | $ | (0.97) | $ | 1.88 | $ | 1.49 | $ | 1.87 | $ | 1.93 | $ | 0.96 | $ | (1.87) | $ | 6.24 |
| Less Net Income (Loss) Per Unrestricted Share From: | ||||||||||||||||||||
| Income (Loss) from Change in Fair Value of Equity and Convertible Securities | 0.27 | (0.01) | 0.50 | 0.63 | 0.87 | 0.54 | 0.87 | (1.40) | 1.41 | 0.87 | ||||||||||
| Net Realized Gains (Losses) on Sales of Investments | 0.27 | 0.13 | 0.24 | 0.17 | — | 0.12 | 0.14 | 0.19 | 0.80 | 0.46 | ||||||||||
| Impairment Losses | (0.04) | (0.01) | (0.04) | (0.05) | 0.01 | (0.01) | (0.08) | (0.14) | (0.14) | (0.24) | ||||||||||
| Acquisition Related Transaction and Integration Costs | (0.11) | (0.10) | (0.13) | (0.20) | (0.24) | (0.17) | (0.21) | (0.14) | (0.54) | (0.76) | ||||||||||
| Debt Extinguishment, Pension and Other Charges | — | — | — | (0.77) | — | — | — | — | (0.77) | |||||||||||
| Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share | $ | (2.05) | $ | (1.19) | $ | (1.54) | $ | 1.33 | $ | 1.62 | $ | 1.39 | $ | 1.21 | $ | 2.45 | $ | (3.40) | $ | 6.68 |
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 Ratio, including the impact of catastrophe losses and loss and LAE reserve development from prior years, with the Insurance Expense Ratio.
The Company believes Underlying Losses and LAE and the Underlying Combined Ratio are useful to investors and uses these financial measures to reveal the trends in the Company’s Property & Casualty Insurance segment that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses may cause the Company’s loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on incurred losses and LAE and the Combined Ratio. Prior-year reserve developments are caused by unexpected loss development on historical reserves. Because reserve development relates to the re-estimation of losses from earlier periods, it has no bearing on the performance of the Company’s 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.
Kemper Corporation
As Adjusted for Acquisitions Non-GAAP Financial Measure
As Adjusted for Acquisitions amounts are non-GAAP financial measures. Subsequent to the applicable acquisitions, the As Adjusted for Acquisitions amounts are computed by subtracting the impact of purchase accounting adjustments from the comparable consolidated GAAP financial measure reported by Kemper. The Company believes computing and presenting results on an adjusted basis are useful to investors and are used by management to provide meaningful and comparable year-over-year comparisons.
Kemper Corporation
As Adjusted for Acquisitions - Consolidated Financial Highlights
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||
| Earned Premiums | ||||||||||||||||||||
| Kemper - GAAP As Reported | $ | 1,359.1 | $ | 1,356.1 | $ | 1,337.7 | $ | 1,200.8 | $ | 1,214.0 | $ | 1,206.5 | $ | 1,085.3 | $ | 1,166.4 | $ | 5,253.7 | $ | 4,672.2 |
| AAC - Prior to Acquisition | — | — | — | 87.9 | 91.2 | 92.6 | 92.0 | 90.3 | 87.9 | 366.1 | ||||||||||
| As Adjusted for Acquisitions1 | $ | 1,359.1 | $ | 1,356.1 | $ | 1,337.7 | $ | 1,288.7 | $ | 1,305.2 | $ | 1,299.1 | $ | 1,177.3 | $ | 1,256.7 | $ | 5,341.6 | $ | 5,038.3 |
| Adjusted Consolidated Net Operating Income (Loss) | ||||||||||||||||||||
| Kemper | $ | (130.8) | $ | (75.8) | $ | (99.4) | $ | 87.2 | $ | 105.8 | $ | 90.9 | $ | 79.2 | $ | 162.9 | $ | (218.8) | $ | 438.8 |
| AAC - Prior to Acquisition | — | — | — | 12.3 | 9.5 | 12.4 | 13.3 | 10.9 | 12.3 | 46.1 | ||||||||||
| Less: Impact of Purchase Accounting | (4.5) | (6.7) | (10.1) | (1.8) | (3.2) | (3.2) | (4.4) | (4.4) | (23.1) | (15.2) | ||||||||||
| As Adjusted for Acquisitions1 | $ | (126.3) | $ | (69.1) | $ | (89.3) | $ | 101.3 | $ | 118.5 | $ | 106.5 | $ | 96.9 | $ | 178.2 | $ | (183.4) | $ | 500.1 |
| 1 As Adjusted for Acquisitions is a non-GAAP financial measure, which is computed by excluding the impact of purchase accounting. See page 36. |
Kemper Corporation
Selected Financial Information
As Adjusted for Acquisitions - Specialty Property & Casualty Insurance Segment
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Earned Premiums | ||||||||||||||||||||||||||||||
| Kemper Specialty P&C - GAAP As Reported | $ | 1,032.3 | $ | 1,028.3 | $ | 1,010.3 | $ | 877.6 | $ | 882.4 | $ | 871.4 | $ | 759.0 | $ | 822.5 | $ | 3,948.5 | $ | 3,335.3 | ||||||||||
| AAC - Prior to Acquisition | — | — | — | 87.9 | 91.2 | 92.6 | 92.0 | 90.3 | 87.9 | 366.1 | ||||||||||||||||||||
| As Adjusted for Acquisitions1 | $ | 1,032.3 | $ | 1,028.3 | $ | 1,010.3 | $ | 965.5 | $ | 973.6 | $ | 964.0 | $ | 851.0 | $ | 912.8 | $ | 4,036.4 | $ | 3,701.4 | ||||||||||
| Current Year Non-CAT Losses and LAE | ||||||||||||||||||||||||||||||
| Kemper Specialty P&C - GAAP As Reported | $ | 1,028.5 | $ | 924.4 | $ | 877.4 | $ | 650.0 | $ | 626.2 | $ | 589.0 | $ | 515.8 | $ | 619.8 | $ | 3,480.3 | $ | 2,350.8 | ||||||||||
| AAC - Prior to Acquisition | — | — | — | 62.0 | 62.4 | 62.6 | 62.2 | 62.6 | 62.0 | 249.8 | ||||||||||||||||||||
| Less: Impact of Purchase Accounting | ||||||||||||||||||||||||||||||
| Amortization of Fair Value Adjustment to Unpaid Loss and LAE | 0.2 | 0.3 | 0.3 | 0.4 | 0.4 | 0.3 | 0.8 | 0.7 | 1.2 | 2.2 | ||||||||||||||||||||
| As Adjusted for Acquisitions1 | $ | 1,028.3 | $ | 924.1 | $ | 877.1 | $ | 711.6 | $ | 688.2 | $ | 651.3 | $ | 577.2 | $ | 681.7 | $ | 3,541.1 | $ | 2,598.4 | ||||||||||
| Insurance Expenses | ||||||||||||||||||||||||||||||
| Kemper Specialty P&C - GAAP As Reported | $ | 204.4 | $ | 194.2 | $ | 205.6 | $ | 170.3 | $ | 179.1 | $ | 159.5 | $ | 161.2 | $ | 152.1 | $ | 774.5 | $ | 651.9 | ||||||||||
| AAC - Prior to Acquisition | — | — | — | 13.1 | 17.2 | 18.3 | 19.7 | 15.4 | 13.1 | 70.6 | ||||||||||||||||||||
| Less: Impact of Purchase Accounting | ||||||||||||||||||||||||||||||
| Amortization of VOBA | 4.5 | 12.8 | 24.8 | 0.3 | 0.3 | 0.3 | 0.6 | 0.6 | 42.4 | 1.8 | ||||||||||||||||||||
| Amortization of Estimated Legacy AAC Deferred Policy Acquisition Costs ("DPAC") | (2.8) | (8.4) | (16.0) | — | — | — | — | — | (27.2) | — | ||||||||||||||||||||
| Amortization of VOBA, Net of Legacy DPAC | 1.7 | 4.4 | 8.8 | 0.3 | 0.3 | 0.3 | 0.6 | 0.6 | 15.2 | 1.8 | ||||||||||||||||||||
| Amortization of Finite Life Intangible Assets Acquired | 3.1 | 3.1 | 3.0 | 0.9 | 0.9 | 0.9 | 0.9 | 1.2 | 10.1 | 3.9 | ||||||||||||||||||||
| Other | 1.1 | 1.1 | 1.1 | 1.1 | 2.9 | 3.0 | 3.0 | 3.4 | 4.4 | 12.3 | ||||||||||||||||||||
| Total Purchase Accounting Adjustments | 5.9 | 8.6 | 12.9 | 2.3 | 4.1 | 4.2 | 4.5 | 5.2 | 29.7 | 18.0 | ||||||||||||||||||||
| As Adjusted for Acquisitions1 | $ | 198.5 | $ | 185.6 | $ | 192.7 | $ | 181.1 | $ | 192.2 | $ | 173.6 | $ | 176.4 | $ | 162.3 | $ | 757.9 | $ | 704.5 | ||||||||||
| Underlying Combined Ratio1 | ||||||||||||||||||||||||||||||
| Kemper Specialty P&C Segment - GAAP As Reported | 119.4 | % | 108.9 | % | 107.3 | % | 93.5 | % | 91.3 | % | 85.9 | % | 89.1 | % | 93.9 | % | 107.7 | % | 89.9 | % | ||||||||||
| As Adjusted for Acquisitions1 | 118.8 | % | 107.9 | % | 105.9 | % | 92.5 | % | 90.4 | % | 85.6 | % | 88.6 | % | 92.5 | % | 106.5 | % | 89.2 | % | ||||||||||
| 1 As Adjusted for Acquisitions is a non-GAAP financial measure, which is computed by excluding the impact of purchase accounting. See page 36. |
Kemper Corporation
Selected Financial Information
As Adjusted for Acquisitions - Specialty Personal Automobile Insurance
(Dollars in Millions)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31,<br>2021 | Dec 31,<br>2020 | |||||||||||||||||||||
| Earned Premiums | ||||||||||||||||||||||||||||||
| Kemper Specialty Personal Automobile Insurance - GAAP As Reported | $ | 918.1 | $ | 920.6 | $ | 909.6 | $ | 785.4 | $ | 796.1 | $ | 792.2 | $ | 689.8 | $ | 753.2 | $ | 3,533.7 | $ | 3,031.3 | ||||||||||
| AAC - Prior to Acquisition | — | — | — | 87.9 | 91.2 | 92.6 | 92.0 | 90.3 | 87.9 | 366.1 | ||||||||||||||||||||
| As Adjusted for Acquisitions1 | $ | 918.1 | $ | 920.6 | $ | 909.6 | $ | 873.3 | $ | 887.3 | $ | 884.8 | $ | 781.8 | $ | 843.5 | $ | 3,621.6 | $ | 3,397.4 | ||||||||||
| Current Year Non-CAT Losses and LAE | ||||||||||||||||||||||||||||||
| Kemper Specialty Personal Automobile Insurance - GAAP As Reported | $ | 938.5 | $ | 843.9 | $ | 805.1 | $ | 586.4 | $ | 569.1 | $ | 543.4 | $ | 472.4 | $ | 576.0 | $ | 3,173.9 | $ | 2,160.9 | ||||||||||
| AAC - Prior to Acquisition | — | — | — | 62.0 | 62.4 | 62.6 | 62.2 | 62.6 | 62.0 | 249.8 | ||||||||||||||||||||
| Less: Impact of Purchase Accounting | ||||||||||||||||||||||||||||||
| Amortization of Fair Value Adjustment to Unpaid Loss and LAE | 0.2 | 0.3 | 0.2 | 0.3 | 0.3 | 0.2 | 0.6 | 0.6 | 1.0 | 1.7 | ||||||||||||||||||||
| As Adjusted for Acquisitions1 | $ | 938.3 | $ | 843.6 | $ | 804.9 | $ | 648.1 | $ | 631.2 | $ | 605.8 | $ | 534.0 | $ | 638.0 | $ | 3,234.9 | $ | 2,409.0 | ||||||||||
| Insurance Expenses | ||||||||||||||||||||||||||||||
| Kemper Specialty Personal Automobile Insurance - GAAP As Reported | $ | 184.3 | $ | 176.0 | $ | 187.7 | $ | 155.3 | $ | 162.8 | $ | 145.6 | $ | 146.7 | $ | 139.2 | $ | 703.3 | $ | 594.3 | ||||||||||
| AAC - Prior to Acquisition | — | — | — | 13.1 | 17.2 | 18.3 | 19.7 | 15.4 | 13.1 | 70.6 | ||||||||||||||||||||
| Less: Impact of Purchase Accounting | ||||||||||||||||||||||||||||||
| Amortization of VOBA | 4.4 | 12.8 | 24.7 | 0.2 | 0.2 | 0.1 | 0.4 | 0.4 | 42.1 | 1.1 | ||||||||||||||||||||
| Amortization of Estimated Legacy AAC Deferred Policy Acquisition Costs ("DPAC") | (2.8) | (8.4) | (16.0) | — | — | — | — | — | (27.2) | — | ||||||||||||||||||||
| Amortization of VOBA, Net of Legacy DPAC | 1.6 | 4.4 | 8.7 | 0.2 | 0.2 | 0.1 | 0.4 | 0.4 | 14.9 | 1.1 | ||||||||||||||||||||
| Amortization of Finite Life Intangible Assets Acquired | 3.0 | 2.9 | 2.8 | 0.7 | 0.7 | 0.7 | 0.7 | 1.1 | 9.4 | 3.2 | ||||||||||||||||||||
| Other | 0.9 | 0.8 | 0.9 | 0.9 | 2.4 | 2.4 | 2.4 | 3.0 | 3.5 | 10.2 | ||||||||||||||||||||
| Total Purchase Accounting Adjustments | 5.5 | 8.1 | 12.4 | 1.8 | 3.3 | 3.2 | 3.5 | 4.5 | 27.8 | 14.5 | ||||||||||||||||||||
| As Adjusted for Acquisitions1 | $ | 178.8 | $ | 167.9 | $ | 175.3 | $ | 166.6 | $ | 176.7 | $ | 160.7 | $ | 162.9 | $ | 150.1 | $ | 688.6 | $ | 650.4 | ||||||||||
| Underlying Combined Ratio1 | ||||||||||||||||||||||||||||||
| Kemper Specialty Personal Automobile Insurance - GAAP As Reported | 122.3 | % | 110.8 | % | 109.1 | % | 94.5 | % | 91.8 | % | 86.9 | % | 89.8 | % | 95.0 | % | 109.7 | % | 90.9 | % | ||||||||||
| As Adjusted for Acquisitions1 | 121.7 | % | 109.9 | % | 107.8 | % | 93.3 | % | 91.1 | % | 86.6 | % | 89.1 | % | 93.4 | % | 108.3 | % | 90.1 | % | ||||||||||
| 1 As Adjusted for Acquisitions is a non-GAAP financial measure, which is computed by excluding the impact of purchase accounting. See page 36. |
39
q42021earningspres
Earnings Call Presentation – 4Q 2021 Fourth Quarter 2021 Earnings January 31, 2022
Earnings Call Presentation – 4Q 2021 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. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Such statements involve known and unknown risks, uncertainties, and other factors, including but not limited to: • changes in the frequency and severity of insurance claims; • claim development and the process of estimating claim reserves; • the impacts of inflation; • product demand and pricing; • effects of governmental and regulatory actions; • litigation outcomes; • investment risks; • cybersecurity risks; • impact of catastrophes; and • other risks and uncertainties detailed in Kemper’s Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission (“SEC”). The COVID-19 outbreak and subsequent global pandemic (“Pandemic”) is an extraordinary catastrophe that creates unique uncertainties and risks. Kemper cannot provide any assurances as to the impacts of the Pandemic and related economic conditions on Kemper’s operating and financial results. Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this presentation, including any such statements related to the Pandemic. Non-GAAP Financial Measures This presentation contains non-GAAP financial measures that the company believes are meaningful to investors. Non-GAAP financial measures have been reconciled to the most comparable GAAP financial measure. Preliminary Matters 2
Earnings Call Presentation – 4Q 2021 Deliver low double-digit ROE2 over time 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 Grow returns and book value per share over time Diversified sources of earnings; Strong capital/liquidity positions; Disciplined approach to capital management Consumer-related businesses with opportunities that: • Target specialty markets • Have limited, weak or unfocused competition • Require unique expertise (underwriting, claim, distribution, analytics and other) Strategic focus: 3
Earnings Call Presentation – 4Q 2021 Fourth Quarter 2021 Highlights ¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 20-29 2 Return on average shareholders’ equity (5-point average) 3 As adjusted for acquisition; see reconciliation on Pages 26-29 4 Pandemic headwinds continued to impact margins Taking actions to return to target profitability • Inflation trends related to supply chain issues and labor shortages continued to drive loss costs, exceeding the benefits of rate and underwriting actions • Specialty P&C rate actions: Filed for 8% rate increase on ~57% of book, includes California • Preferred P&C rate actions: Filed for 12% rate increase on ~23% of book, ongoing repositioning of book to improve profitability 4th Quarter Overview Environmental pressures challenged 4Q21 financial results • Net loss of $106 million ($1.66) per share, as reported, or $101 million ($1.59) per share, as adjusted3 • Adjusted consolidated net operating loss1 of $131 million ($2.05) per share, as reported, or $126 million ($1.98) per share, as adjusted3 • (3)% ROAE2, (5)% ROAE2 excluding net unrealized gains on fixed maturities and goodwill1 • Generated $351 million of operating cash flow for the year • Dividends paid of $0.31 Shareholder Value Creation Strong capital and liquidity enables us to navigate environmental challenges • Holding company remains a source of strength for subsidiaries, with more than $900 million of liquidity • Debt-to-capital ratio of 21.9% remains within target range • Upsized and renewed multi-year occurrence and annual aggregate programs Capital Management and Financial Strength
Earnings Call Presentation – 4Q 2021 Focus is on restoring profitability and positioning businesses for growth in 2023 Fourth Quarter Financial Highlights Environmental headwinds impacted profitability and TBVPS growth As Reported As Adjusted1 Quarter Ended Quarter Ended (Dollars in millions, except per share amounts) Dec 31, 2021 Dec 31, 2020 Dec 31, 2021 Dec 31, 2020 Net Income (Loss) $(106) $98 $(101) $118 Net Income (Loss) – Per Diluted Share $(1.66) $1.46 $(1.59) $1.77 Adjusted Consolidated Net Operating Income (Loss)1 $(131) $106 $(126) $119 Adj. Consolidated Net Op. Income (Loss) – Per Diluted Share1 $(2.05) $1.59 $(1.98) $1.78 Catastrophe Losses $13 $6 AAC goodwill diluted TBVPS by $3.11 Tangible Book Value Per Common Share excluding unrealized gains1 $34.44 $41.65 Return on Avg. Tangible Common Equity1 (4.9)% 16.3% Dividend Paid to Shareholders Per Share $0.31 $0.30 Specialty PIF growth 17.9% 2.5% 4.5% 2.2% 5 ¹ As adjusted for acquisition; see reconciliation on Pages 26-29
Earnings Call Presentation – 4Q 2021 Restoration activities will persist through 2022 Review of Net Operating Income ¹ Non-GAAP financial measure; see reconciliation in appendix pages 20-29 4Q21 financial results pressured by environmental challenges 6 Three Months Ended, As Reported Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Variance Dollars per Unrestricted Share - Diluted 2021 2021 2021 2021 2020 QoQ Net Income (Loss) (1.66)$ (1.18)$ (0.97)$ 1.85$ 1.46$ (3.12) (Income) Loss from Change in FV of Equity & Convertible Securities (0.27) 0.01 (0.50) (0.62) (0.86) 0.59 Investment Related (Gains)/Losses (0.27) (0.13) (0.24) (0.16) - (0.27) Net Impairment Losses 0.04 0.01 0.04 0.05 (0.01) 0.05 Acquisition Related Transaction, Integration & Other Costs 0.11 0.10 0.13 0.19 0.24 (0.13) Debt Extinguishment, Pension and Other Charges - - - - 0.76 (0.76) Adj. Consolidated Net Operating Income (Loss)1 (2.05) (1.19) (1.54) 1.31 1.59 (3.64) Sources of Volatility: Income (Loss) After-Tax From: Catastrophes (0.16) (0.40) (0.43) (0.33) (0.07) (0.09) - Solar Investment (0.05) 0.11 0.01 0.20 0.05 (0.10) Prior-year Reserve Development 0.01 (0.31) (1.01) - (0.10) 0.11 - Alternative Investment Income 0.29 0.27 0.38 0.32 0.27 0.02 - Impact of Purchase Accounting (0.07) (0.10) (0.15) (0.03) (0.05) (0.02) Total from Sources of Volatility 0.02$ (0.43)$ (1.20)$ 0.16$ 0.10$ (0.08)$
Earnings Call Presentation – 4Q 2021 Environmental Factors Pressuring Capital Generation & Returns Total Adjusted Return of BVPS Ex. Unrealized Gains on Fixed Maturities and Goodwill Return on Shareholders’ Equity 2016 2017 2018 2019 2020 2021 Book Value Per Share ex. Goodwill and Unrealized¹ Cumulative Dividends Per Share Paid $31.21 $31.10$29.66 $40.27 $46.76 $40.79 1.1% 8.0% 11.4% 24.7% 16.3% (4.9)%0.9% 6.6% 8.3% 16.3% 11.3% (3.2)% 2016 2017 2018 2019 2020 2021 ROATCE ROE ex. Unrealized Gains on Fixed Maturities Growth 38% • AAC goodwill diluted TBVPS by $3.11 • Infinity transaction diluted TBVPS by $3.84 • ROATCE measure captures investors’ compensation on tangible equity ¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 20-29 2 Return on average tangible common equity (rolling 5 point avg.); please see reconciliation in appendix on pages 20-29 3 Return on average shareholder’s equity excluding unrealized gains on fixed maturities (rolling 5 point avg.); please see reconciliation in appendix on pages 20-29 2 3 7 Infinity Acq Closed 7/18 AAC Acq Closed 4/21
Earnings Call Presentation – 4Q 2021 27.6% 21.9% 23.0% 16.4% 20.4% 21.9% 2016 2017 2018 2019 2020 2021 Debt-to-Capital <30% Strong Balance Sheet with Well-Funded Insurance Entities Significant capital and liquidity positions Debt Cash Flow from Operating Activities $2.7B $4.8B$4.0B$2.7B Total Capitalization Parent Company Liquidity Risk-Based Capital Ratios¹ $299 $197 $101 $207 $733 $234 $385 $385 $540 $660 $700 $704 2016 2017 2018 2019 2020 2021 Borrowings Available Under Credit Agreement & from Subs HoldCo Cash & Investments (M M ) 415 430 410 355 340 345335 290 285 365 330 225 2016 2017 2018 2019 2020 2021 Life & Health P&C (ex. AU & AACC) (% ) $684 $867 $641$582 (M M ) $241 $241 $539 $534 $448 $351 2016 2017 2018 2019 2020 2021 $1,433 $5.7B Capital and liquidity positions enable us to navigate environment and position business for success $5.1B 8 $938 ¹ The estimated Risk-Based Capital Ratios are calculated at the Company Action Level
Earnings Call Presentation – 4Q 2021 2022 Reinsurance Program Highlights1 Renewed programs and upsized our catastrophe excess of loss reinsurance program Program is designed to mitigate risk and reduce cost of capital ▪ Catastrophe Excess of Loss (XOL) Reinsurance Program • Increased limits by $75M for 2022 commensurate with increased size of business • Program covers losses at 95% of $300M in excess of $50M • Limits align with our risk appetite and minimizes our cost of capital ▪ Aggregate Catastrophe Program • Increased retention by $5 million • Coverage: ‒ $50 million in excess of $65 million ‒ $500K deductible per storm ‒ Perils: All perils, excluding named storms (e.g., hurricanes) and earthquakes ‒ Covered Line: Property, Fire and Dwelling ▪ Minimal change in total reinsurance program costs vs 2021 9 $50 $50 $225 $300 2021 Program 2022 Program CAT XOL Program Retention Limit 5 % R eten tio n 5 % R eten tio n Coverage $75M $60 $65 $50 $50 2021 Program 2022 Program CAT Aggregate Retention Limit Retention $5M ¹Further reinsurance program details on slide 19.
Earnings Call Presentation – 4Q 2021 4.5% 4.5% 5.0% 4.4% 4.6% 4Q20 1Q21 2Q21 3Q21 4Q21 53% 18% 6% 5% 6% 3% 9% Other States/ Munis 67% 28% 4% 1% Diversified & Highly-Rated Portfolio Fixed Maturity Ratings $8.0 Billion A or Higher ≤ CCC B / BB BBB Diversified Portfolio with Consistent Returns Note: Charts may not balance due to rounding ¹ Equity securities excludes $333 million of Other Equity Interests of LP/LLC’s that have been reclassified into Alternative Investments • Portfolio continues to provide stable net investment income - 4.6% PTE annualized book yield • Investment portfolio is designed for growth of both income and total return • Steady investment income supports long- term business objectives $81 $76 $82 $80 $85 $22 $27 $32 $22 $23 4Q20 1Q21 2Q21 3Q21 4Q21 Core Portfolio Alternative Inv. Portfolio Net Investment Income¹ (M M ) $103 $108$102$114$103 Overview Corporates Short-term Alternatives¹ Equity¹ U.S. Gov’t Portfolio Composition Pre-Tax Equiv. Annualized Book Yield $10.4 Billion 10
Earnings Call Presentation – 4Q 2021 (10.0)% (8.0)% (6.0)% (4.0)% (2.0)% 0.0 % 2.0 % 4.0 % 6.0 % 8.0 % 10.0 % Significant, rapid drop in loss trend Implementing Pricing and Underwriting Actions to Combat Trend Actions take time to earn into financials; illustrative earned rate vs. trend comparison 11 Time (Not to Scale) Ea rn e d R at e a n d L o ss T re n d ( N o t to S ca le ) Target margins return when combination of earned rate and other underwriting actions exceed loss trend Δ Earned Rate Loss Trend (frequency & severity) Pre-Pandemic Lockdowns Re-Opening / Future Rate filed Rate to zero Predictable loss trend offset by rate Significant, rapid rise in loss trend Prior to 2020 2Q20 – 1Q21 Current+ Rate earning-in ILLUSTRATIVE LOSS TREND vs. RATE CYCLE Rate meeting / exceeding loss trend early 2022
Earnings Call Presentation – 4Q 2021 90.4 92.5 105.9 107.9 118.8 89.2 92.5 99.3 102.3 106.5 4Q20 1Q21 2Q21 3Q21 4Q21 Underlying Combined Ratio2 QTD YTD Specialty Property & Casualty Segment1 Environmental challenges continued to pressure near-term profitability ¹ As adjusted for acquisition; see reconciliation on Pages 26-29; 2 Non-GAAP financial measure; see reconciliation in appendix on pages 20-29; excludes impact of purchase accounting 3 Represents the percent of total book impacted in the quarter and the weighted average rate of actual filings; 4 Period rate goes into effect (% ) Key Highlights Positioned to navigate challenging environment and return to long-term profitability targets Rate Actions3 Overall Impact Filed Effective4 Written Earned % Prem Impacted Wtd Ave Rate % Prem Impacted Wtd Ave Rate Cumulative Impact on Specialty Personal Auto Book 3Q 2021 34% 3% 34% 3% 1.8% 0.1% 4Q 2021 57% 8% 37% 9% 3.6% 0.3% 1Q 2022 ~60% ~7% ~21% ~7% ~5.8% ~1.1% 12 • Inflation trends related to supply chain issues and labor shortages led to an increase in the underlying combined ratio2 • Corrective actions in progress • Unfavorable intra-year development of roughly 2pts related to increasing inflation in BI & metal losses • Earned rate will increase throughout 2022 and 2023 Key Metrics ($ in millions) 4Q’21 4Q’20 Change vs 4Q’20 Earned Premiums2 $1,032 $974 6.0% Underlying Loss & LAE Ratio2 99.6% 70.7% 28.9pts Underlying Expense Ratio2 19.2% 19.7% (0.5pts) Policies In-Force (000) 2,201 2,106 4.5% Specialty PPA (Rate Change Activity Since 2Q21)
Earnings Call Presentation – 4Q 2021 Preferred Property & Casualty Insurance Segment Primary focus on restoring profitability Key Highlights 103.1 97.6 111.3 114.6 127.1 77.6 78.8 89.1 81.5 73.7 4Q20 1Q21 2Q21 3Q21 4Q21 Underlying Combined Ratio¹ Auto Home & Other Profitability impacted by severity challenges ¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 20-29 2 Represents the percent of total book impacted in the quarter and the weighted average rate of actual filings; 3 Period rate goes into effect • Underlying combined ratio1 in segment increased to 107% for the quarter • Increase driven by elevated severity trends • Unfavorable intra-year development of roughly 2pts related to increasing inflation in BI & metal losses (% ) 13 Key Metrics ($ in millions) 4Q’21 4Q’20 Change vs 4Q’20 Auto Earned Premiums $101 $107 (5.6)% Policies In-Force (000) 205 219 (6.4)% Home & Other Earned Premiums $61 $62 (0.1)% Policies In-Force (000) 212 213 (0.5)% Rate Actions2 Overall Impact Filed Effective3 Written Earned % Prem Impacted Wtd Ave Rate % Prem Impacted Wtd Ave Rate Cumulative Impact on Preferred Personal Auto Book 3Q 2021 39% 4% 31% 6% 1.6% 0.1% 4Q 2021 23% 12% 21% 6% 2.9% 0.1% 1Q 2022 ~17% ~10% ~17% ~13% ~5.2% ~0.5% Preferred Personal Auto (Rate Change Activity Since 2Q21)
Earnings Call Presentation – 4Q 2021 Life & Health Insurance Segment New Covid variants continue to impact Life results Note: Chart may not balance due to rounding ¹ Excludes other income and solar credit impairment (M M ) • Life Earned Premium increased $5.0 million (5%) in Q4’21 to $101.5 million, due to cumulative persistency improvement • Persistency remained elevated over pre-Pandemic levels (2017-2019) • Annualized Life new business sales remain above historical levels • Life claim activity above pre-Pandemic levels and remains in-line with national mortality trends Key Highlights $162 $161 $164 $164 $164 $53 $51 $52 $48 $51 4Q20 1Q21 2Q21 3Q21 4Q21 Revenues1 Earned Premiums Net Investment Income $215$217$212$215 $213 Improved Life persistency and continued growth in new business sales position business for long-term profitability 14 Key Metrics ($ in millions except per policy amounts) 4Q’21 4Q’20 Change vs 4Q’20 L&H Net Operating Income $5 $9 (44.4)% Life Face Value of In-Force $20,430 $19,859 2.9% Avg. Face per Policy $6,192 $5,909 4.8% Avg. Premium per Policy Issued $541 $492 10.0%
Earnings Call Presentation – 4Q 2021 Appendix 15
Earnings Call Presentation – 4Q 2021 ….to create value for all our stakeholders A Leading Specialized Insurer Taking advantage of a diversified portfolio of niche businesses…. Founded in 1990 and headquartered in Chicago, with subsidiaries writing policies since 1911 ~6.5M Policies ~35,400 Agents/Brokers ~10,300 Employees Preferred personal lines insurance providing preferred automobile, homeowners and other personal insurance products ~$15B Assets Specialty P&C insurance providing personal and commercial automobile insurance products Life and health insurance providing life, supplemental benefits, and other property insurance products 16
Earnings Call Presentation – 4Q 2021 Capital Deployment Priorities Dedicated to being good stewards of capital Management and capital deployment priorities focused on maximizing shareholder value 1. Investment in the business • Fund profitable organic growth at appropriate risk-adjusted returns • Strategic investments and acquisitions that enhance the business and meet or exceed our ROE targets over time 2. Return capital to shareholders • Repurchase shares opportunistically • Maintain competitive dividends 17
Earnings Call Presentation – 4Q 2021 Solar Energy Investment: In Line with Environmental Impact Goals $100 million commitment to solar energy partnership investment generating attractive returns 18 • In conjunction with Sunrun, invested in a diversified group of residential solar energy projects • Opportunity to provide renewable energy solutions for homeowners that benefits the environment • Expect to earn an attractive return that will primarily be recognized as tax credits / deductions as well as operating cash flows - Due to tax profile of transaction, this investment needs to be evaluated on after-tax basis • Majority of financial benefits will be recognized over the next two years - Will reduce our Effective Tax Rate over next two years - Largest impact is expected to have taken place in 1Q’21 Reporting on Income Statement Line Items Continue to optimize our capital management through investments with attractive returns and cash flows Key Metrics ($ in millions, except per share data) 4Q’20 1Q’21 2Q’21 3Q’21 4Q’21 Cumulative Revenue Reduction $ -- $15.4 $7.7 $23.8 $14.3 $61.2 Per Share $ -- $(0.23) $(0.12) $(0.37) $(0.22) $(0.94) Tax Credit / Deductions $3.2 $28.6 $8.6 $30.6 $11.2 $82.2 Per Share $0.05 $0.43 $0.13 $0.48 $0.18 $1.27 Net Benefit (Loss) $3.2 $13.2 $0.9 $6.8 $(3.1) $21.0 Per Share $0.05 $0.20 $0.01 $0.11 $(0.05) $0.32
Earnings Call Presentation – 4Q 2021 2022 Reinsurance Program Renewed programs and upsized our catastrophe reinsurance program • Policy placed at 1/1/22 upsized relative to prior four years - New limit aligned with risk-appetite to cover 1-in-200 occurrence - Minimizes rating agency cost of capital • Total coverage: 95% of $300 million in excess of $50 million Catastrophe Reinsurance Program (Multi-Year) • Increased retention vs. 2021 program – Intended to reduce volatility from high- frequency, low severity events • Coverage – $50 million in excess of $65 million – $500K deductible per storm – Perils: All perils, excluding named storms (e.g., hurricanes) and earthquakes – Covered Line: Property, Fire and Dwelling Aggregate Catastrophe Program 2022 Aggregate Catastrophe Reinsurance Program 19
Earnings Call Presentation – 4Q 2021 Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities 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. The Company uses the trend 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 generally 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. Non-GAAP Financial Measures 20 2021 2020 2019 2018 2017 2016 Book Value Per Share 62.93$ 69.74$ 59.59$ 47.10$ 41.11$ 38.52$ Less: Net Unrealized Gains on Fixed Maturities Per Share (7.89) (11.07) (6.51) (1.70) (5.54) (3.52) Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities 55.04$ 58.67$ 53.08$ 45.40$ 35.57$ 35.00$ Less: Goodwill (20.60) (17.02) (16.72) (17.18) (6.28) (6.30) Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities and Goodwill 34.44$ 41.65$ 36.36$ 28.22$ 29.29$ 28.70$ For the Periods Ended
Earnings Call Presentation – 4Q 2021 Return on Equity Non-GAAP Financial Measures 21 2021 2020 2019 2018 2017 2016 Rolling 12 Month Return on Average Shareholders' Equity (5 Point Avg) (2.8)% 9.8% 14.8% 7.7% 5.9% 0.8% Less: Net Unrealized Gains on Fixed Maturities (0.4)% 1.5% 1.5% 0.6% 0.7% 0.1% Rolling 12 Month Return on Average Shareholders' Equity Excluding Net Unrealized Gains on Fixed Maturities (5 Point Avg) (3.2)% 11.3% 16.3% 8.3% 6.6% 0.9% Less: Goodwill (1.7)% 5.0% 8.4% 3.1% 1.4% 0.2% Rolling 12 Month Return on Average Shareholders' Equity Excluding Net Unrealized Gains on Fixed Maturities and Goodwill (5 Point Avg) (4.9)% 16.3% 24.7% 11.4% 8.0% 1.1% For the Periods Ended
Earnings Call Presentation – 4Q 2021 Kemper believes that Adjusted Consolidated Net Operating Income (Loss) 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. Non-GAAP Financial Measures 22
Earnings Call Presentation – 4Q 2021 Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share is a non-GAAP financial measure computed by dividing Adjusted Consolidated Net Operating Income (Loss) attributed to unrestricted shares by the weighted-average unrestricted shares and equivalent shares outstanding. The most directly comparable GAAP financial measure is Diluted Net Income (Loss) Per Unrestricted Share. Kemper believes that Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share 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 from change in fair value of equity and convertible securities, net realized gains on sales of investments, impairment losses related to investments, acquisition related transaction, integration and other costs and loss from early extinguishment of debt included in Kemper’s results may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions that impact the values of the company’s investments, the timing of which is unrelated to the insurance underwriting process. Non-GAAP Financial Measures 23 Per Unrestricted Share 4Q21 3Q21 2Q21 1Q21 4Q20 Net Income (Loss) - Diluted (1.66)$ (1.18)$ (0.97)$ 1.85$ 1.46$ Net (Income) Loss From: Change in Fair Value of Equity & Convertible Securities (0.27) 0.01 (0.50) (0.62) (0.86) Net Realized Gains on Sales of Investments (0.27) (0.13) (0.24) (0.16) - Impairment Losses 0.04 0.01 0.04 0.05 (0.01) Acquisition Related Transaction, Integration and Other Costs 0.11 0.10 0.13 0.19 0.24 Debt Extinguishment, pension and other charges - - - - 0.76 Adj. Consolidated Net Operating Income (Loss) - Diluted (2.05)$ (1.19)$ (1.54)$ 1.31$ 1.59$ For the Three Months Ended
Earnings Call Presentation – 4Q 2021 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. Non-GAAP Financial Measures 24
Earnings Call Presentation – 4Q 2021 Underlying Combined Ratio – Continued Non-GAAP Financial Measures 25 4Q21 3Q21 2Q21 1Q21 4Q20 Specialty P&C Insurance Combined Ratio as Reported 118.9% 111.6% 116.1% 93.5% 91.7% Current Year Catastrophe Loss and LAE Ratio (0.2)% (0.3)% (0.8)% (0.2)% (0.6)% Prior Years Non-Catastrophe Losses and LAE 0.7% (2.4)% (8.0)% 0.2% 0.2% Prior Years Catastrophe Losses and LAE Ratio 0.0% 0.0% 0.0% 0.0% 0.0% Underlying Combined Ratio 119.4% 108.9% 107.3% 93.5% 91.3% Preferred P&C Insurance Combined Ratio as Reported 115.5% 116.6% 118.9% 105.4% 96.2% Current Year Catastrophe Loss and LAE Ratio (4.6)% (14.3)% (14.8)% (14.8)% 3.1% Prior Years Non-Catastrophe Losses and LAE (5.2)% 0.0% (3.1)% (0.1)% (5.6)% Prior Years Catastrophe Losses and LAE Ratio 1.2% (0.1)% 2.1% 0.2% (0.1)% Underlying Combined Ratio 106.9% 102.2% 103.1% 90.7% 93.6% Preferred Auto Combined Ratio as Reported 135.5% 117.4% 117.3% 99.5% 112.3% Current Year Catastrophe Loss and LAE Ratio (1.3)% (2.6)% (2.7)% (0.6)% (0.4)% Prior Years Non-Catastrophe Losses and LAE (7.2)% (0.1)% (3.5)% (1.2)% (9.2)% Prior Years Catastrophe Losses and LAE Ratio 0.1% (0.1)% 0.2% (0.1)% 0.4% Underlying Combined Ratio 127.1% 114.6% 111.3% 97.6% 103.1% Preferred Home & Other Combined Ratio as Reported 82.5% 115.2% 121.8% 115.7% 68.6% Current Year Catastrophe Loss and LAE Ratio (10.1)% (33.9)% (35.8)% (39.5)% 9.2% Prior Years Non-Catastrophe Losses and LAE (1.8)% 0.2% (2.3)% 1.9% 0.6% Prior Years Catastrophe Losses and LAE Ratio 3.1% 0.0% 5.4% 0.7% (0.8)% Underlying Combined Ratio 73.7% 81.5% 89.1% 78.8% 77.6% For the Three Months Ended
Earnings Call Presentation – 4Q 2021 As Adjusted for Acquisition amounts are non-GAAP financial measures. Subsequent to the applicable acquisitions, the As Adjusted for Acquisitions amounts are computed by subtracting the impact of purchase accounting adjustments from the comparable consolidated GAAP financial measure reported by Kemper. The Company believes computing and presenting results on an adjusted basis are useful to investors and are used by management to provide meaningful and comparable year-over-year comparisons. Non-GAAP Financial Measures 26
Earnings Call Presentation – 4Q 2021 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 2020 and 2021 and including historical results of Kemper and AAC in periods prior to acquisition date of April 1, 2021. 27 ($ in millions, except per share data) 31-Dec-21 30-Sep-21 30-Jun-21 31-Mar-21 31-Dec-20 Earned Premiums Kemper - GAAP As Reported 1,359.1$ 1,356.1$ 1,337.7$ 1,200.8$ 1,214.0$ AAC - Prior to Acquisition - - - 87.9 91.2 As Adjusted 1 1,359.1$ 1,356.1$ 1,337.7$ 1,288.7$ 1,305.2$ Net Income (Loss) Kemper - GAAP As Reported (105.8)$ (75.3)$ (62.6)$ 123.2$ 97.5$ AAC - Prior to Acquisition - - - 6.1 16.9 Less: Impact of Purchase Accounting (4.5) (6.7) (10.1) (1.8) (3.2) As Adjusted 1 (101.3)$ (68.6)$ (52.5)$ 131.1$ 117.6$ As Adjusted 1 - Per Diluted Share (1.59)$ (1.08)$ (0.82)$ 1.97$ 1.77$ Adjusted Consolidated Net Operating Income (Loss) Kemper - GAAP As Reported (130.8)$ (75.8)$ (99.4)$ 87.2$ 105.8$ AAC - Prior to Acquisition - - - 12.3 9.5 Less: Impact of Purchase Accounting (4.5) (6.7) (10.1) (1.8) (3.2) As Adjusted 1 (126.3)$ (69.1)$ (89.3)$ 101.3$ 118.5$ As Adjusted 1 - Per Diluted Share (1.98)$ (1.08)$ (1.39)$ 1.52$ 1.78$ Three Months Ended
Earnings Call Presentation – 4Q 2021 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 2020 and 2021 and including historical results of Kemper and AAC in periods prior to acquisition date of April 1, 2021. 28 Specialty P&C Insurance Segment ($ in millions) 31-Dec-21 30-Sep-21 30-Jun-21 31-Mar-21 31-Dec-20 Earned Premiums Kemper Specialty P&C - GAAP As Reported 1,032.3$ 1,028.3$ 1,010.3$ 877.6$ 882.4$ AAC - Prior to Acquisition - - - 87.9 91.2 As Adjusted 1 1,032.3$ 1,028.3$ 1,010.3$ 965.5$ 973.6$ Current Year Non-CAT Losses and LAE Kemper Specialty P&C - GAAP As Reported 1,028.5$ 924.4$ 877.4$ 650.0$ 626.2$ AAC - Prior to Acquisition - - - 62.0 62.4 Less: Impact of Purchase Accounting Amortization of Fair Value Adjustment to Unpaid Loss and LAE 0.2 0.3 0.3 0.4 0.4 As Adjusted 1 1,028.3$ 924.1$ 877.1$ 711.6$ 688.2$ Insurance Expenses Kemper Specialty P&C - GAAP As Reported 204.4$ 194.2$ 205.6$ 170.3$ 179.1$ AAC - Prior to Acquisition - - - 13.1 17.2 Less: Impact of Purchase Accounting 5.9 8.6 12.9 2.3 4.1 As Adjusted 1 198.5$ 185.6$ 192.7$ 181.1$ 192.2$ As Adjusted 1 Underlying Combined Ratio As Adjusted 1 Underlying Loss & LAE Ratio 99.6% 89.9% 86.8% 73.7% 70.7% As Adjusted 1 Expense Ratio 19.2% 18.0% 19.2% 18.8% 19.7% As Adjusted 1 Underlying Combined Ratio 118.8% 107.9% 105.9% 92.5% 90.4% Three Months Ended
Earnings Call Presentation – 4Q 2021 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 2020 and 2021 and including historical results of Kemper and AAC in periods prior to acquisition date of April 1, 2021. 29 Specialty Personal Automobile Insurance ($ in millions) 31-Dec-21 30-Sep-21 30-Jun-21 31-Mar-21 31-Dec-20 Earned Premiums Kemper Specialty P&C - GAAP As Reported 918.1$ 920.6$ 909.6$ 785.4$ 796.1$ AAC - Prior to Acquisition - - - 87.9 91.2 As Adjusted 1 918.1$ 920.6$ 909.6$ 873.3$ 887.3$ Current Year Non-CAT Losses and LAE Kemper Specialty P&C - GAAP As Reported 938.5$ 843.9$ 805.1$ 586.4$ 569.1$ AAC - Prior to Acquisition - - - 62.0 62.4 Less: Impact of Purchase Accounting Amortization of Fair Value Adjustment to Unpaid Loss and LAE 0.2 0.3 0.2 0.3 0.3 As Adjusted 1 938.3$ 843.6$ 804.9$ 648.1$ 631.2$ Insurance Expenses Kemper Specialty P&C - GAAP As Reported 184.3$ 176.0$ 187.7$ 155.3$ 162.8$ AAC - Prior to Acquisition - - - 13.1 17.2 Less: Impact of Purchase Accounting 5.5 8.1 12.4 1.8 3.3 As Adjusted 1 178.8$ 167.9$ 175.3$ 166.6$ 176.7$ As Adjusted 1 Underlying Combined Ratio As Adjusted 1 Underlying Loss & LAE Ratio 102.2% 91.6% 88.5% 74.2% 71.1% As Adjusted 1 Expense Ratio 19.5% 18.2% 19.3% 19.1% 19.9% As Adjusted 1 Underlying Combined Ratio 121.7% 109.9% 107.8% 93.3% 91.1% Three Months Ended