3Q 2022 Earnings Call Presentation
Third Quarter 2022 Earnings
Earnings Call Presentation - 3Q 2022
Preliminary Matters
Cautionary Statements Regarding Forward-Looking Information
This presentation may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Such statements involve known and unknown risks, uncertainties, and other factors, including but not limited to:
- changes in the frequency and severity of insurance claims;
- claim development and the process of estimating claim reserves;
- the impacts of inflation;
- supply chain disruption;
- product demand and pricing;
- effects of governmental and regulatory actions;
- litigation outcomes;
- investment risks;
- cybersecurity risks;
- impact of catastrophes; and
- other risks and uncertainties detailed in Kemper's Annual Report on Form 10-K and subsequent filings with the
Securities and Exchange Commission ("SEC").
The COVID-19 outbreak and subsequent global pandemic ("Pandemic") is an extraordinary catastrophe that creates unique uncertainties and risks. Kemper cannot provide any assurances as to the impacts of the Pandemic and related economic conditions on Kemper's operating and financial results.
Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this 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.
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Earnings Call Presentation - 3Q 2022 |
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Leading Insurer Empowering Specialty and Underserved Markets
Enabled by a dynamic, diverse and innovative team who act like owners
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Delivering appropriate |
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and affordable |
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insurance and financial |
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solutions |
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Specialty auto insurance for |
Life insurance for |
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underserved markets; Latino, |
low/modest income |
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Hispanic and urban areas |
customers |
Target Markets
Differentiated Capabilities
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Require unique |
Have limited or |
Enable systematic, sustainable . |
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expertise |
unfocused competition |
competitive advantages |
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• Product sophistication |
• Ease of use |
• Capital management |
• Organization |
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• Loss cost management |
• Distribution |
• Cost management |
development |
Target top quartile value creation for customers, employees and shareholders
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Earnings Call Presentation - 3Q 2022 |
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Go Forward Strategy to Maximize Value Creation
Strengthening capabilities in our core businesses
$92 .8% average, underlying
Executing On-Plan
Auto
combined ratio pre- pandemic1
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1. Improving Combined Ratio - 12.5 pt. improvement since 4Q'21 |
- 12.5 pts combined ratio improvement since 4Q'212
TTM Earned
Premiums
- >
$100M net operating
income pre-pandemic
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Life |
• Mortality trending towards |
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pre-pandemic levels |
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2. |
Streamlining Operating Model |
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1. |
Greater than |
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2. |
Initiated strategic review of |
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3. |
Complete divestiture of |
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3. |
Optimizing Capital Structure - |
Levers for Future
- Reciprocal structure - Transitioning P&C personal lines underwriting to fee-based, lower capital model
Bermuda optimization -~$100M release of additional trapped capital- Flexibility to redeploy capital to the highest value opportunities
Operating model enhancements to enable productivity and growth
- Represents average underlying combined ratio for specialty P&C from 2018 - 2020.
- Improvement in specialty P&C's underlying combined ratio from 4Q'21 - 3Q'22.
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Earnings Call Presentation - 3Q 2022 |
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Third Quarter 2022 Highlights
Lower incremental severity combined with profit actions drove sequential improvement
Macroeconomic
Environment
Actions Taken
Inflation pressures continued to impact the insurance sector
- Elevated severity trend continued to impact auto insurers, albeit at a slower rate of change
- New money yields increasing long-term spread margin - new rates exceeding yield maturities by ~140 bps
Ongoing profit restoration actions; aggressively pursuing all improvement opportunities
- Rate-takingactivities exceeded forecast;
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- Specialty P&C Personal Auto - Filed an additional 16% increase on 7% of the book
- Preferred P&C Personal Auto - Filed an additional 18% increase on 40% of the book
- Cumulative written rate benefits will continue to eain at an accelerated rate
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- Specialty P&C Personal Auto - 37 points of rate on 43% of the book since Q2'21
- Preferred P&C Personal Auto - 13 points of rate on 69% of the book since Q2'21
3rd Quarter
Results
Balance Sheet
Strength
Higher earned rates and non-rate actions drove profit improvement sequentially
- Net loss of
$76M (-$1.19 /sh), as reported, or$73M (-$1.14 /sh), as adjusted1 - Adjusted consolidated net operating loss2 of
$31M (-$0.48 /sh), as reported, or$27M (-$0.42 /sh), as adjusted1 - -10%ROAE2,3, -17% ROAE2,3, excluding net unrealized (gain)/loss on fixed maturities and goodwill1
Strong capital and liquidity enable us to navigate environmental challenges
- Holding company remains a source of strength for subsidiaries with nearly
$1.4B of liquidity - Capital efficiency enhancements to strengthen financial flexibility
- As adjusted for acquisition; see reconciliation on pages 28-30
- Non-GAAPfinancial measure; please see reconciliation in appendix on pages 22-27
- Retuon average shareholders' equity (5-point average)
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Earnings Call Presentation - 3Q 2022 |
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TANDEM DIABETES CARE INC – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations.
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