Kemper Corporation (NYSE: KMPR) reported net income of $51.4
million, or $0.80 per diluted share, for the fourth quarter of
2023, compared to a net loss of $53.3 million, or $(0.84) per
share, for the fourth quarter of 2022.
Adjusted Consolidated Net Operating Income1 was $50.5 million,
or $0.78 per diluted share, for the fourth quarter of 2023,
compared to Adjusted Consolidated Net Operating Loss1,2 of $23.5
million, or $(0.36) per share, for the fourth quarter of 2022.
Key themes of the quarter include:
- Specialty P&C underlying combined ratio improved 2.3%
sequentially to 98.2%
- Life business continues to produce stable earnings
- Parent liquidity increased to $1.1 billion, up $325 million
from prior quarter; insurance companies remain well
capitalized
- Achieved multi-year target of $150 million in expense savings
in first year of program
- Bermuda optimization generated approximately $330 million of
dividends to parent
“I’m pleased we closed 2023 with a return to profitability and
we are clearly on the path to return to target margins in 2024,”
said Joseph P. Lacher, Jr., President, CEO and Chairman. “The
benefits from our planned profit actions have generated improvement
in our Specialty P&C underlying combined ratio for three
consecutive quarters. The strategic initiatives we completed during
the quarter exceeded expectations, significantly increasing
liquidity and strengthening our low-cost operating platform. With
these solid results, we are transitioning to the next phase of our
journey and are focused on a thoughtful balance between continued
improvement in underwriting profitability and new business
generation to optimize long-term profitable growth.”
*NOTE: In third quarter 2023, the Company finalized the
establishment of Kemper Reciprocal, an Illinois-domiciled
reciprocal insurance exchange that began writing policies in
September 2023. The results of Kemper Reciprocal are consolidated
under US GAAP.
Unless specified otherwise, discussion of our fourth quarter
2023 results is focused on net income attributable to Kemper
Corporation common shareholders, which does not include financial
results from Kemper Reciprocal that are presented within the
consolidated financial results in this release.
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.
2 The Company has recast all prior period results to reflect a
change in the Adjusted Consolidated Operating Net Income (Loss)
calculation to exclude the results of the Preferred Insurance
business that we expect to fully exit (referred to as "Non-Core
Operations"). The results of this business were previously reported
as a reportable segment. Prior period amounts have been recast to
reflect the change in reportable segments and the new segment
measure of profitability.
Three Months Ended
Year Ended
(Dollars in Millions, Except Per Share
Amounts) (Unaudited)
Dec 31,
2023
Dec 31,
20223
Dec 31,
2023
Dec 31,
20223
Net Income (Loss)
$
51.4
$
(53.3
)
$
(272.1
)
$
(286.6
)
Adjusted Consolidated Net Operating Income
(Loss) 1,2
$
50.5
$
(23.5
)
$
(47.2
)
$
(116.4
)
Impact of Catastrophe Losses and Related
Loss Adjustment Expense (LAE) on Net Loss
$
(8.3
)
$
(6.4
)
$
(76.4
)
$
(62.6
)
Diluted Net Income (Loss) Per Share
From:
Net Income (Loss)
$
0.80
$
(0.84
)
$
(4.25
)
$
(4.50
)
Adjusted Consolidated Net Operating Income
(Loss)1,2
$
0.78
$
(0.36
)
$
(0.74
)
$
(1.82
)
Impact of Catastrophe Losses and Related
LAE on Net Loss Per Share
$
(0.16
)
$
(0.10
)
$
(1.51
)
$
(0.98
)
3 This press release recasts previously
reported financial information for the provisions of Accounting
Standards Update No. 2018-12, “Targeted Improvements to the
Accounting for Long-Duration Contracts and related amendments”
(“LDTI”) adopted as of January 1, 2023, with a transition date of
January 1, 2021, under the modified retrospective method.
Revenues
Total revenues for the fourth quarter of 2023 decreased $187.4
million, or 13.6 percent, to $1,187.2 million, compared to the
fourth quarter of 2022, mostly driven by $116.0 million of reduced
Specialty P&C earned premiums due to continued lower new
business writings, partially offset by higher average earned
premium per exposure from rate increases. The decrease in total
revenues was also driven by $58.6 million of lower Life earned
premiums mostly due to the disposition of Kemper Health that was
completed in December 2022, and the annual review and update of
assumptions under LDTI for deferred profit liability.
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,
2023
Dec 31, 20223
Dec 31,
2023
Dec 31, 20223
Segment Adjusted Net Operating Income
(Loss):
Specialty Property & Casualty
Insurance
$
45.3
$
(35.1
)
$
(57.1
)
$
(147.4
)
Life Insurance
15.0
23.0
51.8
68.8
Total Segment Adjusted Net Operating
Income (Loss)
60.3
(12.1
)
(5.3
)
(78.6
)
Corporate and Other Adjusted Net Operating
Loss
(9.9
)
(11.4
)
(42.1
)
(37.8
)
Less: Net Loss Attributable to
Noncontrolling Interest
(0.1
)
—
(0.2
)
—
Adjusted Consolidated Net Operating Income
(Loss)1,2
50.5
(23.5
)
(47.2
)
(116.4
)
Net (Loss) Income From:
Change in Fair Value of Equity and
Convertible Securities
(1.8
)
—
3.7
(63.1
)
Net Realized Investment Gains (Losses)
15.6
3.1
(14.7
)
3.4
Impairment Losses
(1.0
)
(2.9
)
(0.9
)
(20.4
)
Acquisition and Disposition Related
Transaction, Integration, Restructuring and Other Costs
(14.4
)
(29.1
)
(95.0
)
(61.3
)
Debt Extinguishment, Pension Settlement
and Other Charges
—
—
(55.5
)
(2.9
)
Goodwill Impairment Charge
—
—
(45.5
)
—
Non-Core Operations
2.5
(0.9
)
(17.0
)
(25.9
)
Net Income (Loss) Attributable to Kemper
Corporation
$
51.4
$
(53.3
)
$
(272.1
)
$
(286.6
)
The Specialty Property and Casualty Insurance segment reported
adjusted net operating income of $45.3 million for the fourth
quarter of 2023, compared to an adjusted net operating loss of
$35.1 million in the fourth quarter of 2022. Results increased due
primarily to an improvement in the Underlying Combined Ratio1 and
the absence of adverse prior year loss and LAE development. The
segment’s Underlying Combined Ratio was 98.2 percent compared to
107.8 percent in the fourth quarter of 2022. The improvement was
primarily driven by higher average earned premiums per exposure
resulting from rate increases and lower underlying claim
frequency.
The Life Insurance segment reported net operating income of
$15.0 million for the fourth quarter of 2023, compared to a net
operating income of $23.0 million in the fourth quarter of 2022.
The decrease in adjusted net operating income was primarily due to
lower Net Investment Income driven by lower returns from equity
method limited liability investments and lower income from
company-owned life insurance.
Capital
Total Shareholders’ Equity at year-end 2023 was $2,505.2
million, a decrease of $165.4 million, or 6 percent, since year-end
2022 primarily driven by the net loss for the year, partially
offset by a decrease in net unrealized losses on our fixed income
portfolio. Kemper and its direct non-insurance subsidiaries ended
the year with cash and investments of $464.5 million, and $393.0
million of available borrowing capacity under the revolving credit
agreement.
On October 31, 2023, Kemper announced that its Board of
Directors declared a quarterly dividend of $0.31 per share, or
$20.2 million. The dividend was paid on November 30, 2023, to its
shareholders of record as of November 14, 2023.
Kemper ended the year with a book value per share of $39.08, a
decrease of 6 percent from $41.79 at the end of 2022. Book Value
Per Share Excluding Net Unrealized Losses on Fixed Maturities and
Changes in the Discount Rate on Future Life Policyholder Benefits1
was $44.90, compared to $49.23 at the end of 2022.
Unaudited Condensed Consolidated Statements of Income (Loss)
for the three months and year ended December 31, 2023 and 2022 are
presented below.
Three Months Ended
Year Ended
(Dollars in Millions, Except Per Share
Amounts)
Dec 31,
2023
Dec 31, 20223
Dec 31,
2023
Dec 31, 20223
Revenues:
Earned Premiums (Changes in Deferred
Profit Liability for the Three Months and Year Ended: 2023 - $32.6
and $84.2; 2022 - $3.4 and $60.2)
$
1,063.8
$
1,264.9
$
4,529.4
$
5,213.4
Net Investment Income
104.6
106.3
419.7
422.6
Change in Value of Alternative Energy
Partnership Investments4
0.6
1.3
2.9
(19.9
)
Other Income
1.9
1.9
7.2
9.2
(Loss) Income from Change in Fair Value of
Equity and Convertible Securities
(2.2
)
—
4.7
(79.9
)
Net Realized Investment Gains (Losses)
19.7
3.9
(18.6
)
4.3
Impairment Losses
(1.2
)
(3.7
)
(1.1
)
(25.8
)
Total Revenues
1,187.2
1,374.6
4,944.2
5,523.9
Expenses:
Policyholders’ Benefits and Incurred
Losses and Loss Adjustment Expenses (Changes in Liability for
Future Policyholder Benefits for the Three Months and Year Ended:
2023 - $24.9 and $33.5; 2022 - $(9.9) and $12.0)
808.1
1,073.0
3,820.0
4,432.6
Insurance Expenses
258.0
288.0
1,052.4
1,201.0
Loss from Early Extinguishment of Debt
—
—
—
3.7
Interest and Other Expenses
57.6
86.5
369.3
257.6
Goodwill Impairment
—
—
49.6
—
Total Expenses
1,123.7
1,447.5
5,291.3
5,894.9
Income (Loss) before Income Taxes
63.5
(72.9
)
(347.1
)
(371.0
)
Income Tax (Expense) Benefit
(12.2
)
19.6
74.8
84.4
Net Income (Loss)
$
51.3
$
(53.3
)
$
(272.3
)
$
(286.6
)
Less: Net Loss Attributable to
Noncontrolling Interest
(0.1
)
—
(0.2
)
—
Net Income (Loss) Attributable to Kemper
Corporation
$
51.4
$
(53.3
)
$
(272.1
)
$
(286.6
)
Net Income (Loss) Per Unrestricted
Share:
Basic
$
0.80
$
(0.84
)
$
(4.25
)
$
(4.50
)
Diluted
$
0.80
$
(0.84
)
$
(4.25
)
$
(4.50
)
Weighted-average Outstanding (Shares in
Thousands):
Unrestricted Shares - Basic
64,088.3
63,888.1
64,025.6
63,825.5
Unrestricted Shares and Equivalent Shares
- Diluted
64,566.0
63,888.1
64,025.6
63,825.5
Dividends Paid to Shareholders Per
Share
$
0.31
$
0.31
$
1.24
$
1.24
4 Income related to Changes in Value of
Alternative Energy Partnership Investments was $0.6 million for the
three months ended December 31, 2023, compared to income of $1.3
million for the same period in 2022. Tax benefits related to the
Alternative Energy Partnership Investments was $0.1 million for the
three months ended December 31, 2023, compared to tax expense of
$0.0 million for the same period in 2022. This resulted in net
income of $0.7 million and net income of $1.3 million attributable
to Alternative Energy Partnership Investments for the three months
ended December 31, 2023 and 2022, respectively.
Income related to Changes in Value of
Alternative Energy Partnership Investments was $2.9 million for the
year ended December 31, 2023, compared to a loss of $19.9 million
for the same period in 2022. Tax expense related to the Alternative
Energy Partnership Investments was $0.5 million for the year ended
December 31, 2023, compared to tax benefit of $8.0 million for the
same period in 2022. This resulted in net income of $2.4 million
and a net loss of $11.9 million attributable to Alternative Energy
Partnership Investments for the year ended December 31, 2023 and
2022, respectively.
Unaudited business segment revenues for the three months and
year ended December 31, 2023 and 2022 are presented below.
Three Months Ended
Year Ended
(Dollars in Millions)
Dec 31,
2023
Dec 31,
20223
Dec 31,
2023
Dec 31,
20223
REVENUES:
Specialty Property & Casualty
Insurance:
Earned Premiums:
Personal Automobile
$
699.3
$
830.4
$
2,977.8
$
3,496.7
Commercial Automobile
166.3
151.2
654.7
549.7
Total Earned Premiums
865.6
981.6
3,632.5
4,046.4
Net Investment Income
42.6
37.9
168.3
140.7
Change in Value of Alternative Energy
Partnership Investments
0.3
0.7
1.6
(9.9
)
Other Income
1.3
1.0
4.5
6.0
Total Specialty Property & Casualty
Insurance Revenues
909.8
1,021.2
3,806.9
4,183.2
Life Insurance:
Earned Premiums:
Life1
67.3
99.0
319.2
352.8
Accident & Health
5.6
31.4
23.1
168.2
Property
11.1
12.2
45.3
50.5
Total Earned Premiums
84.0
142.6
387.6
571.5
Net Investment Income
47.1
52.6
193.4
216.5
Change in Value of Alternative Energy
Partnership Investments
0.1
0.3
0.7
(5.3
)
Other Income (Loss)
0.2
0.2
(0.2
)
(0.6
)
Total Life Insurance Revenues
131.4
195.7
581.5
782.1
Total Segment Revenues
1,041.2
1,216.9
4,388.4
4,965.3
(Loss) Income from Change in Fair Value of
Equity and Convertible Securities
(2.2
)
—
4.7
(79.9
)
Net Realized Investment Gains (Losses)
19.7
3.9
(18.6
)
4.3
Impairment Losses
(1.2
)
(3.7
)
(1.1
)
(25.8
)
Non-Core Operations
126.7
154.5
558.4
640.5
Other
3.0
3.0
12.4
19.5
Total Revenues
$
1,187.2
$
1,374.6
$
4,944.2
$
5,523.9
1 Earned premiums were impacted by changes
in deferred profit liability related to the annual review and
assumptions update under LDTI that decreased earned premiums by
$15.0 million in fourth quarter and full year 2023 and increased
earned premiums by $12.7 million in fourth quarter and full year
2022.
KEMPER CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars in Millions)
(Unaudited)
Dec 31,
2023
Dec 31,
20223
Assets:
Investments:
Fixed Maturities at Fair Value
$
6,881.9
$
6,894.8
Equity Securities at Fair Value
225.8
243.2
Equity Method Limited Liability
Investments
221.7
217.0
Alternative Energy Partnership
Investments
17.3
16.3
Short-term Investments at Cost which
Approximates Fair Value
520.9
278.4
Company-Owned Life Insurance
513.5
586.5
Loans to Policyholders
281.2
283.4
Other Investments
241.9
269.9
Total Investments
8,904.2
8,789.5
Cash
64.1
212.4
Receivables from Policyholders
959.5
1,286.6
Other Receivables
200.5
262.6
Deferred Policy Acquisition Costs
591.6
635.6
Goodwill
1,250.7
1,300.3
Current Income Tax Assets
64.5
167.6
Deferred Income Tax Assets
210.4
129.0
Other Assets
492.6
530.0
Assets of Consolidated Variable Interest
Entity
Fixed Maturities at Fair Value
1.7
—
Short-term Investments at Cost which
Approximates Fair Value
2.0
—
Receivables from Policyholders
0.7
—
Deferred Policy Acquisition Costs
0.1
—
Deferred Income Tax Assets
0.1
—
Total Assets
$
12,742.7
$
13,313.6
Liabilities and Shareholders’
Equity:
Insurance Reserves:
Life & Health
$
3,422.4
$
3,276.2
Property & Casualty
2,680.5
2,756.9
Total Insurance Reserves
6,102.9
6,033.1
Unearned Premiums
1,300.8
1,704.4
Policyholder Contract Liabilities
655.7
701.3
Deferred Income Tax Liabilities
50.6
—
Accrued Expenses and Other Liabilities
737.7
817.3
Long-term Debt, Current and Non-current,
at Amortized Cost
1,389.2
1,386.9
Liabilities of Consolidated Variable
Interest Entity
Unearned Premiums
0.5
—
Accrued Expenses and Other Liabilities
0.3
—
Total Liabilities
10,237.7
10,643.0
Shareholders’ Equity:
Common Stock
6.4
6.4
Paid-in Capital
1,845.3
1,812.7
Retained Earnings
1,014.3
1,366.4
Accumulated Other Comprehensive Loss
(360.8
)
(514.9
)
Total Kemper Corporation Shareholders’
Equity
2,505.2
2,670.6
Noncontrolling Interest
(0.2
)
—
Total Shareholders’ Equity
2,505.0
2,670.6
Total Liabilities and Shareholders’
Equity
$
12,742.7
$
13,313.6
Unaudited selected financial information for the Specialty
Property & Casualty Insurance segment follows.
Three Months Ended
Year Ended
(Dollars in Millions)
Dec 31,
2023
Dec 31,
2022
Dec 31,
2023
Dec 31,
2022
Results
of Operations
Net Premiums Written
$
719.7
$
922.3
$
3,305.4
$
3,934.4
Earned Premiums
$
865.6
$
981.6
$
3,632.5
$
4,046.4
Net Investment Income
42.6
37.9
168.3
140.7
Change in Value of Alternative Energy
Partnership Investments
0.3
0.7
1.6
(9.9
)
Other Income
1.3
1.0
4.5
6.0
Total Revenues
909.8
1,021.2
3,806.9
4,183.2
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE
673.1
859.3
2,974.5
3,569.2
Catastrophe Losses and LAE
2.5
(0.1
)
34.5
23.0
Prior Years:
Non-catastrophe Losses and LAE
(0.2
)
10.2
135.2
(14.6
)
Catastrophe Losses and LAE
0.1
(0.1
)
(2.3
)
0.6
Total Incurred Losses and LAE
675.5
869.3
3,141.9
3,578.2
Insurance Expenses
177.7
198.4
741.3
801.9
Segment Adjusted Operating Income
(Loss)
56.6
(46.5
)
(76.3
)
(196.9
)
Income Tax (Expense) Benefit
(11.3
)
11.4
19.2
49.5
Total Segment Adjusted Net Operating
Income (Loss)
$
45.3
$
(35.1
)
$
(57.1
)
$
(147.4
)
Ratios
Based On Earned Premiums
Current Year Non-catastrophe Losses and
LAE Ratio
77.7
%
87.6
%
82.0
%
88.2
%
Current Year Catastrophe Losses and LAE
Ratio
0.3
—
0.9
0.6
Prior Years Non-catastrophe Losses and LAE
Ratio
—
1.0
3.7
(0.4
)
Prior Years Catastrophe Losses and LAE
Ratio
—
—
(0.1
)
—
Total Incurred Loss and LAE Ratio
78.0
88.6
86.5
88.4
Insurance Expense Ratio
20.5
20.2
20.4
19.8
Combined Ratio
98.5
%
108.8
%
106.9
%
108.2
%
Underlying Combined Ratio1
Current Year Non-catastrophe Losses and
LAE Ratio
77.7
%
87.6
%
82.0
%
88.2
%
Insurance Expense Ratio
20.5
20.2
20.4
19.8
Underlying Combined Ratio1
98.2
%
107.8
%
102.4
%
108.0
%
Non-GAAP
Measure Reconciliation
Combined Ratio
98.5
%
108.8
%
106.9
%
108.2
%
Less:
Current Year Catastrophe Losses and LAE
Ratio
0.3
—
0.9
0.6
Prior Years Non-catastrophe Losses and LAE
Ratio
—
1.0
3.7
(0.4
)
Prior Years Catastrophe Losses and LAE
Ratio
—
—
(0.1
)
—
Underlying Combined Ratio1
98.2
%
107.8
%
102.4
%
108.0
%
Unaudited selected financial information for the Life
Insurance segment follows.
Three Months Ended
Year Ended
(Dollars in Millions)
Dec 31,
2023
Dec 31,
20223
Dec 31,
2023
Dec 31,
20223
Results
of Operations
Earned Premiums
$
84.0
$
142.6
$
387.6
$
571.5
Net Investment Income
47.1
52.6
193.4
216.5
Change in Value of Alternative Energy
Partnership Investments
0.1
0.3
0.7
(5.3
)
Other Income (Loss)
0.2
0.2
(0.2
)
(0.6
)
Total Revenues
131.4
195.7
581.5
782.1
Policyholders’ Benefits and Incurred
Losses and LAE
40.5
88.1
243.4
360.8
Insurance Expenses
71.0
81.1
275.8
343.3
Segment Adjusted Operating Income
19.9
26.5
62.3
78.0
Income Tax Expense
(4.9
)
(3.5
)
(10.5
)
(9.2
)
Total Segment Adjusted Net Operating
Income
$
15.0
$
23.0
$
51.8
$
68.8
Use of Non-GAAP Financial Measures
Adjusted Consolidated Net Operating Income
(Loss)1 is an after-tax, non-GAAP financial measure and is
computed by excluding from Net Income (Loss) Attributable to Kemper
Corporation the after-tax impact of:
(i) (Loss) Income from Change in Fair Value
of Equity and Convertible Securities;
(ii) Net Realized Investment Gains
(Losses);
(iii) Impairment Losses;
(iv) Acquisition and Disposition Related
Transaction, Integration, Restructuring and Other Costs;
(v) Debt Extinguishment, Pension Settlement
and Other Charges;
(vi) Goodwill Impairment Charges;
(vii) Non-Core Operations; and
(viii) Significant non-recurring or
infrequent items that may not be indicative of ongoing
operations
Significant non-recurring items are excluded when (a) the nature
of the charge or gain is such that it is reasonably unlikely to
recur within two years, and (b) there has been no similar charge or
gain within the prior two years. The most directly comparable GAAP
financial measure is Net Income (Loss) Attributable to Kemper
Corporation. There were no applicable significant non-recurring
items that Kemper excluded from the calculation of Adjusted
Consolidated Net Operating Income (Loss)1 for the three and twelve
months ended December 31, 2023 or 2022.
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. (Loss) Income from Change in Fair Value of Equity and
Convertible Securities, Net Realized Investment Gains (Losses) and
Impairment Losses related to investments included in Kemper’s
results may vary significantly between periods and are generally
driven by business decisions and external economic developments
such as capital market conditions that impact the values of
Kemper’s investments, the timing of which is unrelated to the
insurance underwriting process. Acquisition and Disposition Related
Transaction, Integration, Restructuring and Other Costs may vary
significantly between periods and are generally driven by the
timing of acquisitions and business decisions which are unrelated
to the insurance underwriting process. Debt Extinguishment, Pension
Settlement and Other Charges relate to (i) loss from early
extinguishment of debt, which is driven by Kemper’s financing and
refinancing decisions and capital needs, as well as external
economic developments such as debt market conditions, the timing of
which is unrelated to the insurance underwriting process; (ii)
settlement of pension plan obligations which are business decisions
made by Kemper, the timing of which is unrelated to the
underwriting process; and (iii) other charges that are
non-standard, not part of the ordinary course of business, and
unrelated to the insurance underwriting process. Goodwill
impairment charges are excluded because they are infrequent and
non-recurring charges. Non-Core Operations includes the results of
our Preferred Insurance business which we expect to fully exit.
These results are excluded because they are irrelevant to our
ongoing operations and do not qualify for Discontinued Operations
under Generally Accepted Accounting Principles ("GAAP").
Significant non-recurring items are excluded because, by their
nature, they are not indicative of Kemper’s business or economic
trends.
The preceding non-GAAP financial measures should not be
considered a substitute for the comparable GAAP financial measures,
as they do not fully recognize the profitability of Kemper’s
businesses.
A reconciliation of Net Income (Loss) Attributable to Kemper
Corporation to Adjusted Consolidated Net Operating Income (Loss)1
for the three and twelve months ended December 31, 2023 and 2022 is
presented below.
Three Months Ended
Year Ended
(Dollars in Millions) (Unaudited)
Dec 31, 2023
Dec 31, 20223
Dec 31, 2023
Dec 31, 20223
Net Income (Loss) Attributable to Kemper
Corporation
$
51.4
$
(53.3
)
$
(272.1
)
$
(286.6
)
Less Net (Loss) Income From:
Change in Fair Value of Equity and
Convertible Securities
(1.8
)
—
3.7
(63.1
)
Net Realized Investment Gains (Losses)
15.6
3.1
(14.7
)
3.4
Impairment Losses
(1.0
)
(2.9
)
(0.9
)
(20.4
)
Acquisition and Disposition Related
Transaction, Integration, Restructuring and Other Costs
(14.4
)
(29.1
)
(95.0
)
(61.3
)
Debt Extinguishment, Pension Settlement
and Other Charges
—
—
(55.5
)
(2.9
)
Goodwill Impairment Charge
—
—
(45.5
)
—
Non-Core Operations
2.5
(0.9
)
(17.0
)
(25.9
)
Adjusted Consolidated Net Operating Income
(Loss)1,2
$
50.5
$
(23.5
)
$
(47.2
)
$
(116.4
)
Diluted Adjusted Net Operating Income
(Loss) Per Unrestricted Share1 is a non-GAAP financial
measure computed by dividing Adjusted Net Operating Income (Loss)1
attributed to unrestricted shares by the weighted-average
unrestricted shares and equivalent shares outstanding. The most
directly comparable GAAP financial measure is Diluted Net Loss Per
Unrestricted Share.
A reconciliation of Diluted Net Income (Loss) Per Unrestricted
Share to Diluted Adjusted Net Operating Income (Loss) Per
Unrestricted Share1 for the three and twelve months ended December
31, 2023 and 2022 is presented below.
Three Months Ended
Year Ended
(Unaudited)
Dec 31,
2023
Dec 31, 20223
Dec 31,
2023
Dec 31, 20223
Diluted Net Income (Loss) Per Unrestricted
Share
$
0.80
$
(0.84
)
$
(4.25
)
$
(4.50
)
Less Net (Loss) Income Per Unrestricted
Share From:
Change in Fair Value of Equity and
Convertible Securities
(0.03
)
—
0.06
(0.99
)
Net Realized Investment Gains (Losses)
0.24
0.05
(0.23
)
0.05
Impairment Losses
(0.01
)
(0.05
)
(0.01
)
(0.32
)
Acquisition and Disposition Related
Transaction, Integration, Restructuring and Other Costs
(0.22
)
(0.46
)
(1.49
)
(0.96
)
Debt Extinguishment, Pension Settlement
and Other Charges
—
—
(0.87
)
(0.05
)
Goodwill Impairment Charge
—
—
(0.71
)
—
Non-Core Operations
0.04
(0.02
)
(0.26
)
(0.41
)
Diluted Adjusted Net Operating Income
(Loss) Per Unrestricted Share1,2
$
0.78
$
(0.36
)
$
(0.74
)
$
(1.82
)
Return on Tangible Shareholders'
Equity1 is a calculation that uses a non-GAAP financial
Measure. It is calculated by dividing the period’s net income
attributable to Kemper Corporation by the average shareholders’
equity excluding net unrealized gains and losses on fixed
maturities, the change in discount rate on future life policyholder
benefits and goodwill. Return on Shareholder’s Equity is the most
directly comparable GAAP measure. We use this non-GAAP measure to
identify and analyze the change in performance attributable to
management efforts between periods. The Company believes this
non-GAAP financial measure is useful to investors because it
eliminates the effect of items that can fluctuate significantly
from period to period and are generally driven by economic
developments, primarily capital market conditions, the magnitude
and timing of which are not influenced by management. The Company
believes it enhances understanding and comparability of performance
by highlighting underlying business activity and profitability
drivers.
A reconciliation of Return on Shareholders’ Equity to Return on
Shareholders' Equity Excluding Net Unrealized Gains and Losses on
Fixed Maturities, the Change in Discount Rate on Future Life
Policyholder Benefits and Goodwill is presented below:
Three Months Ended
Year Ended
(Dollars in Millions) (Unaudited)
Dec 31,
2023
Dec 31,
20223
Dec 31,
2023
Dec 31,
20223
Numerator:
Annualized Net Income (Loss) Attributable
to Kemper Corporation
$
205.6
$
(213.2
)
$
(272.1
)
$
(286.6
)
Denominator:
Average Shareholders' Equity2
$
2,433.3
$
2,682.6
$
2,539.2
$
2,861.6
Less: Average Net Unrealized Gains and
Losses on Fixed Maturities
716.9
749.7
673.1
296.6
Less: Average Change in Discount Rate on
Future Life Policyholder Benefits
(286.7
)
(256.9
)
(232.6
)
145.9
Less: Average Goodwill
(1,250.7
)
(1,299.6
)
(1,270.5
)
(1,307.0
)
Average Tangible Shareholders' Equity2
$
1,612.8
$
1,875.8
$
1,709.2
$
1,997.1
Return on
Shareholders' Equity:
Return on Shareholders' Equity
8.4
%
(7.9
)%
(10.7
)%
(10.0
)%
Return on Tangible Shareholders'
Equity1
12.7
%
(11.4
)%
(15.9
)%
(14.4
)%
2 Average shareholders' equity and average
tangible shareholders’ equity for the three months ended is the
simple average of the beginning and ending balances for the period.
Average shareholders’ equity and average tangible shareholders’
equity on a year-to-date basis is the (a) the sum of the balance at
the beginning of the year and the ending balance for each quarter
within that year divided by (b) the number of quarters in the
period presented plus one.
Underlying Combined Ratio1 is a
non-GAAP financial measure. It is computed by adding the Current
Year Non-catastrophe Losses and LAE Ratio with the Insurance
Expense Ratio. The most directly comparable GAAP financial measure
is the Combined Ratio, which is computed by adding Total Incurred
Losses and LAE Ratio, including the impact of catastrophe losses
and loss and LAE reserve development from prior years, with the
Insurance Expense Ratio.
Kemper believes Underlying Losses and LAE and the Underlying
Combined Ratio are useful to investors and uses these financial
measures to reveal the trends in Kemper’s Property & Casualty
Insurance segment that may be obscured by catastrophe losses and
prior-year reserve development. These catastrophe losses may cause
Kemper’s loss trends to vary significantly between periods as a
result of their incidence of occurrence and magnitude and can have
a significant impact on incurred losses and LAE and the Combined
Ratio. Prior-year reserve developments are caused by unexpected
loss development on historical reserves. Because reserve
development relates to the re-estimation of losses from earlier
periods, it has no bearing on the performance of Kemper’s insurance
products in the current period. Kemper believes it is useful for
investors to evaluate these components separately and in the
aggregate when reviewing Kemper’s underwriting performance.
Book Value Per Share Excluding Net
Unrealized Gains and Losses on Fixed Maturities and the Change in
Discount Rate on Future Life Policyholder Benefits1 is a
calculation that uses a non-GAAP financial measure. It is
calculated by dividing shareholders’ equity after excluding the
after-tax impact of net unrealized gains and losses on fixed income
securities and the change in discount rate on future life
policyholder benefits 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
and losses on fixed income securities and the change in discount
rate on future life policyholder benefits 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.
A reconciliation of the numerator used in the computation of
Book Value Per Share Excluding Net Unrealized Gains and Losses on
Fixed Maturities and the Change in Discount Rate on Future Life
Policyholder Benefits1 and Book Value Per Share at December 31,
2023 and December 31, 2022 is presented below.
(Dollars in Millions) (Unaudited)
Dec 31,
2023
Dec 31, 20223
Shareholders’ Equity
$
2,505.2
$
2,670.6
Less: Net Unrealized Losses on Fixed
Maturities
(533.8
)
(716.8
)
Less: Change in Discount Rate on Future
Life Policyholder Benefits
160.6
241.1
Kemper Corporation Shareholders’ Equity
Excluding Net Unrealized Losses on Fixed Maturities and Change in
Discount Rate on Future Life Policyholder Benefits1
$
2,878.4
$
3,146.3
Conference Call
Kemper will host its conference call to discuss fourth quarter
2023 results on Thursday, February 1, at 5:00 p.m. Eastern (4:00
p.m. Central). The conference call will be accessible via the
internet and by telephone at 888.259.6580, conference ID
47100078. 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 2023, which is available at the investor
section of kemper.com.
About Kemper
The Kemper family of companies is one of the nation’s leading
specialized insurers. With approximately $13 billion in assets,
Kemper is improving the world of insurance by providing affordable
and easy-to-use personalized solutions to individuals, families and
businesses through its Auto and Life brands. Kemper serves over 4.9
million policies, is represented by approximately 23,700 agents and
brokers, and has approximately 8,100 associates dedicated to
meeting the ever-changing needs of its customers. Learn more about
Kemper at kemper.com.
Caution Regarding Forward-Looking Statements
This press release may contain or incorporate by reference
information that includes or is based on forward-looking statements
within the meaning of the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. We caution investors that
these forward-looking statements are not guarantees of future
performance, and actual results may differ materially. Such
statements involve known and unknown risks, uncertainties, and
other factors, including but not limited to:
- changes in the frequency and severity of insurance claims;
- claim development and the process of estimating claim
reserves;
- the impacts of inflation;
- changes in the interest rate environment;
- supply chain disruption;
- product demand and pricing;
- effects of governmental and regulatory actions;
- litigation outcomes and trends;
- investment risks;
- cybersecurity risks;
- impact of catastrophes; and
- other risks and uncertainties detailed in Kemper’s Annual
Report on Form 10-K and subsequent filings with the Securities and
Exchange Commission (“SEC”).
Kemper assumes no obligation to publicly correct or update any
forward-looking statements as a result of events or developments
subsequent to the date of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240201530226/en/
Investors: Karen Guerra 312.668.9720 or investors@kemper.com
Media: Barbara Ciesemier 312.661.4521 or bciesemier@kemper.com
Kemper (NYSE:KMPR)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
Kemper (NYSE:KMPR)
Historical Stock Chart
Von Mai 2023 bis Mai 2024