AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of Kemper Corporation and Most of Its Subsidiaries and Affiliates

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of the property/casualty subsidiaries and affiliated insurance companies of Kemper Corporation (Kemper Corp.) [NYSE:KMPR], collectively referred to as Kemper Property & Casualty Group (Kemper P&C). AM Best also has removed from under review with developing implications and affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Kemper Corp.’s life/health subsidiaries, collectively referred to as Kemper Life & Health Group (Kemper L&H). Concurrently, AM Best has removed from under review with developing implications and affirmed the Long-Term ICR of “bbb-”, as well as the Long-Term Issue Credit Ratings (Long-Term IR) of Kemper Corp., the ultimate holding company. The outlook assigned to these Credit Ratings (ratings) is stable. All companies are headquartered in Chicago, IL, unless otherwise specified.

AM Best also has removed from under review with negative implications and downgraded the FSR to A- (Excellent) from A (Excellent) and the Long-Term ICR to “a-” from “a” of Infinity Property and Casualty Corporation’s (Infinity P&C Corp.) subsidiaries, as well as the Long-Term ICR and the Long-Term IR to “bbb-” from “bbb” of Infinity P&C Corp. These rating actions follow the close of Kemper Corp.’s acquisition of Infinity P&C Corp. and its subsidiaries (headquartered in Birmingham, AL) in July 2018, the successful execution of related intercompany reinsurance agreements, which became effective Dec. 1, 2018 and the conclusion of AM Best’s overall assessment of the impact of these events. As a result, certain Infinity P&C Corp. subsidiaries became members of Kemper P&C. The outlook assigned to all of these Credit Ratings (ratings) is stable. See below for a detailed listing of all companies and ratings.

The Kemper P&C ratings reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). Kemper P&C’s rating affirmations are attributable to its very strong level of risk-adjusted capitalization, evolving risk management practices and its strengthened position as one of the leading nonstandard auto writers in the United States, following its recent acquisition.

The Kemper L&H ratings reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

Kemper L&H’s rating affirmations were driven by its very strong level of risk-adjusted capitalization, favorable capital to liability ratio, and a steady, meaningful and diverse source of earnings to Kemper Corp. Furthermore, Kemper L&H’s broad array of product including basic life insurance, final expense, limited accident and health benefits and other supplemental products also is driving the rating affirmations.

The FSR of A- (Excellent) and the Long-Term ICRs of “a-” have been removed from under review with developing implications and affirmed, with assigned outlooks of stable, for the following members of the Kemper Property & Casualty Group:

Trinity Universal Insurance Company (Dallas, TX)
Alpha Property & Casualty Insurance Company
Capitol County Mutual Fire Insurance Company
Charter Indemnity Company
Financial Indemnity Company
Kemper Independence Insurance Company
Merastar Insurance Company
Mutual Savings Fire Insurance Company
Kemper Financial Indemnity Company
Old Reliable Casualty Company
Response Insurance Company
Response Worldwide Direct Auto Insurance Company
Response Worldwide Insurance Company
Union National Fire Insurance Company
United Casualty Insurance Company of America
Unitrin Advantage Insurance Company
Unitrin Auto and Home Insurance Company
Unitrin County Mutual Insurance Company
Unitrin Direct Insurance Company
Unitrin Direct Property & Casualty Company
Unitrin Preferred Insurance Company
Unitrin Safeguard Insurance Company
Valley Property & Casualty Insurance Company
Warner Insurance Company

United Insurance Company of America
Mutual Savings Life Insurance Company
The Reliable Life Insurance Company
Union National Life Insurance Company
Reserve National Insurance Company

The FSR has been removed from under review with negative implications and downgraded to A- (Excellent) from A (Excellent) and the Long-Term ICRs downgraded to “a-” from “a” and stable outlooks assigned for the following new members of the Kemper Property & Casualty Group:

Infinity Insurance Company
Infinity Assurance Insurance Company
Infinity Auto Insurance Company
Infinity Casualty Insurance Company
Infinity Indemnity Insurance Company
Infinity Preferred Insurance Company
Infinity Safeguard Insurance Company
Infinity Security Insurance Company
Infinity Select Insurance Company
Infinity Standard Insurance Company
Infinity County Mutual Insurance Company

The following Long-Term IRs have been removed from under review with developing implications and affirmed with a stable outlook assigned:

Kemper Corporation—
-- “bbb-” on $450 million 4.35% senior unsecured notes, due 2025
-- “bb+” on $150 million 7.375% subordinated debentures, due 2054

The following indicative Long-Term IRs for securities available under the shelf registration have been removed from under review with developing implications and affirmed with a stable outlook assigned:

Kemper Corporation—
-- “bbb-” on senior unsecured debt
-- “bb+” on subordinated debt
-- “bb” on preferred stock

The following Long-Term IR has been removed from under review with negative implications and downgraded with a stable outlook assigned:

Infinity Property and Casualty Corporation—
-- to “bbb-” from “bbb” on $275 million 5% senior unsecured notes, due September 2022

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.