4Q 2023 Earnings Call Presentation

Earnings Call Presentation - 4Q 2023

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Market

Characteristics

Differentiated

Capabilities

1 Kemper Auto is equivalent to the Specialty Property & Casualty Insurance Segment

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4th Quarter

Results

Retuto profitability driven by rate and non-rate actions, and cost structure initiatives

• Net income attributable to Kemper Corporation of $51.4 million or $0.80/sh
• Adjusted consolidated net operating income1 of $50.5 million or $0.78/sh
• Specialty P&C underlying combined ratio improved 2.3% sequentially to 98.2%
• • No prior year reserve development
• Life business continues to produce stable earnings
• Total pre-tax current year catastrophe losses of $3 million2

Actions Taken & Completed

Balance Sheet

Strength

Continued profit actions and strategic initiatives enabled retuto profitability and financial strength

• Specialty P&C Private Passenger Auto actions:
• • Filed an additional 9% rate increase on 9% of the book
  • Reciprocal Exchange premium growth strategy is on track
• Achieved multi-year target of $150+ million expense savings in first year of program
• Bermuda optimization generated approximately $330 million of dividends to parent company
• Preferred P&C2 exit on track, released $45 million of capital during the 2H'23 and anticipate an additional $130+ million by year-end 2024

Capital and liquidity positions enable the company to navigate the current market

• Parent company liquidity of approximately $1.1 billion remains a source of strength for subsidiaries
• Insurance companies are well capitalized

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($ in millions, except per share amounts)

Net Income (Loss) Attributable to Kemper Corporation - Per Diluted Share

Adj. Consolidated Net Operating Income (Loss) - Per Diluted Share1

Tangible Book Value - Per Diluted Share1

Retuon Shareholders' Equity

Retuon Tangible Shareholders' Equity1

Life Face Value of In-Force YoY Growth / (Decline)

Specialty P&C Earned Premium YoY Growth / (Decline)

Specialty P&C PIF YoY Growth / (Decline)

1 Non-GAAP financial measure; please see reconciliation in appendix on pages 17-22

Earnings Call Presentation - 4Q 2023

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• Restructuring and integration pre-tax charges of $150 - $200 million will produce an annualized savings of $150 million or greater

run-rate savings of $156 million, and incurred total pre-tax charges of $156 million

Run-Rate Program Savings ($ millions)

137 153

117

87

Earnings Call Presentation - 4Q 2023

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Continued access to significant sources of liquidity

Parent Company Liquidity

2018 2019 2020 2021 2022 2023

Cash Flow from Operating Activities

$(210) $(134)

2018 2019 2020 2021 2022 2023

Risk-Based Capital Ratios¹

Life2

P&C (ex. AACC)

(%)

Debt-to-Capital3

30.3% 32.6%

1 4Q'23 Risk-Based Capital Ratios are calculated at the Company Action Level and are estimated; actual RBC levels are likely to

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Net Investment Income1

Highlights

($ in millions)

$106

$11

$95

$102

$4

$98

$106

$9

$97

$107

$10

$97

$105

$7

$98

• High-qualityportfolio provides consistent net investment income; 72% of fixed income portfolio rated A or higher
• Strong ALM philosophy that mitigates long- term economic and short-term valuation mismatches
• 4.5% PTE annualized book yield
• Average investment grade new money yields approximately 6% for the quarter

1 Non-Core Operations reflects $14, $11, $13, $13, and $13 million related to Preferred P&C in 4Q'22, 1Q'23, 2Q'23, 3Q'23, and

4Q'23, respectively |2 Other category includes Equity Securities, which excludes $196 million of Other Equity Interests of LPs/LLCs Earnings Call Presentation - 4Q 2023 that have been reclassified into Alternative Investments; COLI represents Company Owned Life Insurance

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Highlights

• Sequential improvement driven by additional earned rate in excess of loss trend
• Severity trends have stabilized but remain elevated
• Filed 9% of rate on 9% of the book
• Focus remains on improving margins and then restoring new business production

Cumulative PPA Rate Activity Since 2Q'211

Underlying Combined Ratio2

107.8 108.0

(%)

102.0 100.5

98.2

1 Represents the cumulative weighted average rate impact of actual filings on the total book

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