Kemper Reports Third Quarter 2021 Operating Results
Adjusted Consolidated Net Operating Loss1 was
Key themes of the quarter include:
- Specialty P&C earned premiums increased 18% and policies-in-force (ex. Classic Car) grew ~17.8%; AAC contributed 10.6% and 13.6% for earned premiums and policies-in-force, respectively
- Specialty P&C underlying combined ratio1 was 108.9%, due primarily to higher claim frequency and severity trends
-
Specialty P&C experienced adverse prior year development of
$25M , or 2.4 points, primarily driven by legal developments and increased severity in personal injury protection coverage inFlorida -
Consolidated catastrophe losses were
$32.4 million , primarily related to Hurricane Ida and several wind/hail events - Net investment income results were strong for the quarter, primarily driven by Alternative Investments
- Kemper remains well positioned to support customers and grow long-term shareholder value
“Continued industry-related environmental pressures challenged our financial results,” said President, CEO and Chairman
“Our balance sheet provides appropriate financial stability for the challenges faced by the industry. Our strong capital and liquidity positions enable us to navigate and optimize the current environment. Despite the current challenges, we remain financially strong, and our team will continue to deliver on our promises to our customers and provide attractive, long-term results and 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 |
|
Nine Months Ended |
||||||||||||
|
(Dollars in Millions, Except Per Share Amounts) (Unaudited) |
|
|
|
|
|
|
|
|
||||||||
|
Net Income (Loss) |
|
$ |
(75.3 |
) |
|
$ |
122.3 |
|
|
$ |
(14.7 |
) |
|
$ |
312.4 |
|
|
Adjusted Consolidated Net Operating Income (Loss) 1 |
|
$ |
(75.8 |
) |
|
$ |
90.9 |
|
|
$ |
(88.0 |
) |
|
$ |
333.0 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Impact of Catastrophe Losses and Related Loss Adjustment Expense (LAE) on Net Income |
|
$ |
(25.7 |
) |
|
$ |
(53.0 |
) |
|
$ |
(75.0 |
) |
|
$ |
(79.9 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted Net Income (Loss) Per Share From: |
|
|
|
|
|
|
|
|
||||||||
|
Net Income (Loss) |
|
$ |
(1.18 |
) |
|
$ |
1.83 |
|
|
$ |
(0.23 |
) |
|
$ |
4.67 |
|
|
Adjusted Consolidated Net Operating Income (Loss) 1 |
|
$ |
(1.19 |
) |
|
$ |
1.36 |
|
|
$ |
(1.36 |
) |
|
$ |
4.98 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Impact of Catastrophe Losses and Related LAE on Net Income (Loss) Per Share |
|
$ |
(0.40 |
) |
|
$ |
(0.80 |
) |
|
$ |
(1.16 |
) |
|
$ |
(1.20 |
) |
Capital
Total Shareholders’ Equity at the end of the quarter was
During the third quarter of 2021, Kemper paid dividends of
On
Kemper ended the quarter with a book value per share of
Revenues
Total revenues for the third quarter of 2021 increased
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 |
|
Nine Months Ended |
||||||||||||
|
(Dollars in Millions) (Unaudited) |
|
|
|
|
|
|
|
|
||||||||
|
Segment Net Operating Income (Loss): |
|
|
|
|
|
|
|
|
||||||||
|
|
|
$ |
(59.3 |
) |
|
$ |
119.2 |
|
|
$ |
(70.9 |
) |
|
$ |
246.8 |
|
|
|
|
(6.4 |
) |
|
(32.7 |
) |
|
(5.1 |
) |
|
(13.4 |
) |
||||
|
|
|
2.8 |
|
|
12.2 |
|
|
23.1 |
|
|
50.6 |
|
||||
|
Total Segment Net Operating Income (Loss) |
|
(62.9 |
) |
|
98.7 |
|
|
(52.9 |
) |
|
284.0 |
|
||||
|
Corporate and Other Net Operating Income (Loss) |
|
(12.9 |
) |
|
(7.8 |
) |
|
(35.1 |
) |
|
49.0 |
|
||||
|
Adjusted Consolidated Net Operating Income (Loss) 1 |
|
(75.8 |
) |
|
90.9 |
|
|
(88.0 |
) |
|
333.0 |
|
||||
|
Net Income (Loss) From: |
|
|
|
|
|
|
|
|
||||||||
|
Change in Fair Value of |
|
(0.5 |
) |
|
35.7 |
|
|
73.0 |
|
|
(0.8 |
) |
||||
|
Net Realized Gains on Sales of Investments |
|
7.9 |
|
|
7.9 |
|
|
34.0 |
|
|
30.2 |
|
||||
|
Impairment Losses |
|
(0.5 |
) |
|
(0.8 |
) |
|
(6.2 |
) |
|
(15.8 |
) |
||||
|
Acquisition Related Transaction, Integration and Other Costs |
|
(6.4 |
) |
|
(11.4 |
) |
|
(27.5 |
) |
|
(34.2 |
) |
||||
|
Net Income (Loss) |
|
$ |
(75.3 |
) |
|
$ |
122.3 |
|
|
$ |
(14.7 |
) |
|
$ |
312.4 |
|
Unaudited condensed consolidated statements of income for the three and nine months ended
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
(Dollars in Millions, Except Per Share Amounts) |
|
|
|
|
|
|
|
|
||||||||
|
Revenues: |
|
|
|
|
|
|
|
|
||||||||
|
Earned Premiums |
|
$ |
1,356.1 |
|
|
$ |
1,206.5 |
|
|
$ |
3,894.6 |
|
|
$ |
3,458.2 |
|
|
Net Investment Income |
|
101.9 |
|
|
92.1 |
|
|
318.9 |
|
|
245.5 |
|
||||
|
Change in Value of Alternative Energy Partnership Investments2 |
|
(23.8 |
) |
|
— |
|
|
(46.9 |
) |
|
— |
|
||||
|
Other Income |
|
12.3 |
|
|
0.9 |
|
|
20.8 |
|
|
92.7 |
|
||||
|
Income (Loss) from Change in Fair Value of |
|
(0.6 |
) |
|
45.2 |
|
|
92.4 |
|
|
(1.0 |
) |
||||
|
Net Realized Gains on Sales of Investments |
|
10.1 |
|
|
10.0 |
|
|
43.1 |
|
|
38.2 |
|
||||
|
Impairment Losses |
|
(0.6 |
) |
|
(1.0 |
) |
|
(7.8 |
) |
|
(20.0 |
) |
||||
|
Total Revenues |
|
1,455.4 |
|
|
1,353.7 |
|
|
4,315.1 |
|
|
3,813.6 |
|
||||
|
Expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses |
|
1,211.2 |
|
|
877.5 |
|
|
3,324.8 |
|
|
2,460.2 |
|
||||
|
Insurance Expenses |
|
311.3 |
|
|
276.9 |
|
|
909.0 |
|
|
821.2 |
|
||||
|
Interest and Other Expenses |
|
62.7 |
|
|
47.2 |
|
|
179.2 |
|
|
142.7 |
|
||||
|
Total Expenses |
|
1,585.2 |
|
|
1,201.6 |
|
|
4,413.0 |
|
|
3,424.1 |
|
||||
|
Income (Loss) before Income Taxes |
|
(129.8 |
) |
|
152.1 |
|
|
(97.9 |
) |
|
389.5 |
|
||||
|
Income Tax Benefit (Expense) |
|
54.5 |
|
|
(29.8 |
) |
|
83.2 |
|
|
(77.1 |
) |
||||
|
Net Income (Loss) |
|
$ |
(75.3 |
) |
|
$ |
122.3 |
|
|
$ |
(14.7 |
) |
|
$ |
312.4 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (Loss) from Continuing Operations Per Unrestricted Share: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
$ |
(1.18 |
) |
|
$ |
1.87 |
|
|
$ |
(0.23 |
) |
|
$ |
4.75 |
|
|
Diluted |
|
$ |
(1.18 |
) |
|
$ |
1.83 |
|
|
$ |
(0.23 |
) |
|
$ |
4.67 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net Income (Loss) Per Unrestricted Share: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
$ |
(1.18 |
) |
|
$ |
1.87 |
|
|
$ |
(0.23 |
) |
|
$ |
4.75 |
|
|
Diluted |
|
$ |
(1.18 |
) |
|
$ |
1.83 |
|
|
$ |
(0.23 |
) |
|
$ |
4.67 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average Outstanding (Shares in Thousands): |
|
|
|
|
|
|
|
|
||||||||
|
Unrestricted Shares - Basic |
|
63,628.1 |
|
|
65,362.5 |
|
|
64,469.9 |
|
|
65,710.8 |
|
||||
|
Unrestricted Shares and Equivalent Shares - Diluted |
|
63,628.1 |
|
|
66,633.5 |
|
|
64,469.9 |
|
|
66,797.4 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Dividends Paid to Shareholders Per Share |
|
$ |
0.31 |
|
|
$ |
0.30 |
|
|
$ |
0.93 |
|
|
$ |
0.90 |
|
2 The Alternative Energy Partnership Investments results are included as a pre-tax loss in the Change in Value of Alternative Energy Partnership Investments of
Unaudited business segment revenues for the three and nine months ended
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
(Dollars in Millions) |
|
|
|
|
|
|
|
|
||||||||
|
REVENUES: |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earned Premiums: |
|
|
|
|
|
|
|
|
||||||||
|
Specialty Automobile |
|
$ |
920.6 |
|
|
$ |
792.2 |
|
|
$ |
2,615.6 |
|
|
$ |
2,235.2 |
|
|
Commercial Automobile |
|
107.7 |
|
|
79.2 |
|
|
300.6 |
|
|
217.7 |
|
||||
|
Total Earned Premiums |
|
1,028.3 |
|
|
871.4 |
|
|
2,916.2 |
|
|
2,452.9 |
|
||||
|
Net Investment Income |
|
37.0 |
|
|
30.5 |
|
|
114.7 |
|
|
76.2 |
|
||||
|
Change in Value of Alternative Energy Partnership Investments |
|
(11.3 |
) |
|
— |
|
|
(22.3 |
) |
|
— |
|
||||
|
Other Income |
|
1.2 |
|
|
0.4 |
|
|
3.1 |
|
|
1.4 |
|
||||
|
Total Specialty Property & Casualty Insurance Revenues |
|
1,055.2 |
|
|
902.3 |
|
|
3,011.7 |
|
|
2,530.5 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earned Premiums: |
|
|
|
|
|
|
|
|
||||||||
|
Preferred Automobile |
|
102.6 |
|
|
110.6 |
|
|
309.1 |
|
|
324.6 |
|
||||
|
Homeowners |
|
52.5 |
|
|
55.0 |
|
|
154.6 |
|
|
167.4 |
|
||||
|
Other Personal |
|
8.6 |
|
|
8.9 |
|
|
25.4 |
|
|
27.0 |
|
||||
|
Total Earned Premiums |
|
163.7 |
|
|
174.5 |
|
|
489.1 |
|
|
519.0 |
|
||||
|
Net Investment Income |
|
16.1 |
|
|
10.3 |
|
|
51.5 |
|
|
24.3 |
|
||||
|
Change in Value of Alternative Energy Partnership Investments |
|
(6.4 |
) |
|
— |
|
|
(12.5 |
) |
|
— |
|
||||
|
Other Income |
|
— |
|
|
— |
|
|
— |
|
|
0.1 |
|
||||
|
Total Preferred Property & Casualty Insurance Revenues |
|
173.4 |
|
|
184.8 |
|
|
528.1 |
|
|
543.4 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earned Premiums: |
|
|
|
|
|
|
|
|
||||||||
|
Life |
|
101.5 |
|
|
96.3 |
|
|
300.2 |
|
|
289.2 |
|
||||
|
Accident & Health |
|
47.0 |
|
|
48.9 |
|
|
142.3 |
|
|
149.1 |
|
||||
|
Property |
|
15.6 |
|
|
15.4 |
|
|
46.8 |
|
|
48.0 |
|
||||
|
Total Earned Premiums |
|
164.1 |
|
|
160.6 |
|
|
489.3 |
|
|
486.3 |
|
||||
|
Net Investment Income |
|
48.4 |
|
|
50.7 |
|
|
151.9 |
|
|
146.0 |
|
||||
|
Change in Value of Alternative Energy Partnership Investments |
|
(6.1 |
) |
|
— |
|
|
(12.1 |
) |
|
— |
|
||||
|
Other Income |
|
0.1 |
|
|
— |
|
|
0.3 |
|
|
0.6 |
|
||||
|
Total Life & Health Insurance Revenues |
|
206.5 |
|
|
211.3 |
|
|
629.4 |
|
|
632.9 |
|
||||
|
Total Segment Revenues |
|
1,435.1 |
|
|
1,298.4 |
|
|
4,169.2 |
|
|
3,706.8 |
|
||||
|
Income (Loss) from Change in Fair Value of |
|
(0.6 |
) |
|
45.2 |
|
|
92.4 |
|
|
(1.0 |
) |
||||
|
Net Realized Gains on Sales of Investments |
|
10.1 |
|
|
10.0 |
|
|
43.1 |
|
|
38.2 |
|
||||
|
Impairment Losses |
|
(0.6 |
) |
|
(1.0 |
) |
|
(7.8 |
) |
|
(20.0 |
) |
||||
|
Other |
|
11.4 |
|
|
1.1 |
|
|
18.2 |
|
|
89.6 |
|
||||
|
Total Revenues |
|
$ |
1,455.4 |
|
|
$ |
1,353.7 |
|
|
$ |
4,315.1 |
|
|
$ |
3,813.6 |
|
|
KEMPER CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Millions) (Unaudited) |
||||||||
|
|
|
|
|
|||||
|
Assets: |
|
|
|
|||||
|
Investments: |
|
|
|
|||||
|
Fixed Maturities at Fair Value |
$ |
7,885.1 |
|
|
$ |
7,605.9 |
|
|
|
|
969.6 |
|
|
858.5 |
|
|||
|
|
33.0 |
|
|
40.1 |
|
|||
|
Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings |
255.1 |
|
|
204.0 |
|
|||
|
Alternative Energy Partnership Investments |
54.2 |
|
|
21.3 |
|
|||
|
|
44.1 |
|
|
39.9 |
|
|||
|
Short-term Investments at Cost which Approximates Fair Value |
259.7 |
|
|
875.4 |
|
|||
|
Other Investments |
921.5 |
|
|
779.0 |
|
|||
|
Total Investments |
10,422.3 |
|
|
10,424.1 |
|
|||
|
Cash |
119.8 |
|
|
206.1 |
|
|||
|
Receivables from Policyholders |
1,481.2 |
|
|
1,194.5 |
|
|||
|
Other Receivables |
207.3 |
|
|
222.4 |
|
|||
|
Deferred Policy Acquisition Costs |
676.6 |
|
|
589.3 |
|
|||
|
|
1,312.0 |
|
|
1,114.0 |
|
|||
|
Current Income Tax Assets |
138.7 |
|
|
15.6 |
|
|||
|
Other Assets |
619.3 |
|
|
575.9 |
|
|||
|
Total Assets |
$ |
14,977.2 |
|
|
$ |
14,341.9 |
|
|
|
Liabilities and Shareholders’ Equity: |
|
|
|
|||||
|
Insurance Reserves: |
|
|
|
|||||
|
Life & Health |
$ |
3,524.1 |
|
|
$ |
3,527.5 |
|
|
|
Property & Casualty |
2,596.2 |
|
|
1,982.5 |
|
|||
|
Total Insurance Reserves |
6,120.3 |
|
|
5,510.0 |
|
|||
|
Unearned Premiums |
1,965.7 |
|
|
1,615.1 |
|
|||
|
Policyholder Contract Liabilities |
481.8 |
|
|
467.0 |
|
|||
|
Deferred Income Tax Liabilities |
242.4 |
|
|
285.7 |
|
|||
|
Accrued Expenses and Other Liabilities |
893.7 |
|
|
727.9 |
|
|||
|
Debt at Amortized Cost |
1,122.1 |
|
|
1,172.8 |
|
|||
|
Total Liabilities |
10,826.0 |
|
|
9,778.5 |
|
|||
|
Shareholders’ Equity: |
|
|
|
|||||
|
Common Stock |
6.4 |
|
|
6.5 |
|
|||
|
|
1,777.0 |
|
|
1,805.2 |
|
|||
|
Retained Earnings |
1,888.4 |
|
|
2,071.2 |
|
|||
|
Accumulated Other Comprehensive Income |
479.4 |
|
|
680.5 |
|
|||
|
Total Shareholders’ Equity |
4,151.2 |
|
|
4,563.4 |
|
|||
|
Total Liabilities and Shareholders’ Equity |
$ |
14,977.2 |
|
|
$ |
14,341.9 |
|
|
Unaudited selected financial information for the
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
(Dollars in Millions) |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Results of Operations |
||||||||||||||||
|
Net Premiums Written |
|
$ |
1,024.3 |
|
|
$ |
914.2 |
|
|
$ |
3,078.3 |
|
|
$ |
2,606.3 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earned Premiums |
|
$ |
1,028.3 |
|
|
$ |
871.4 |
|
|
$ |
2,916.2 |
|
|
$ |
2,452.9 |
|
|
Net Investment Income |
|
37.0 |
|
|
30.5 |
|
|
114.7 |
|
|
76.2 |
|
||||
|
Change in Value of Alternative Energy Partnership Investments |
|
(11.3 |
) |
|
— |
|
|
(22.3 |
) |
|
— |
|
||||
|
Other Income |
|
1.2 |
|
|
0.4 |
|
|
3.1 |
|
|
1.4 |
|
||||
|
Total Revenues |
|
1,055.2 |
|
|
902.3 |
|
|
3,011.7 |
|
|
2,530.5 |
|
||||
|
Incurred Losses and LAE related to: |
|
|
|
|
|
|
|
|
||||||||
|
Current Year: |
|
|
|
|
|
|
|
|
||||||||
|
Non-catastrophe Losses and LAE |
|
924.4 |
|
|
589.0 |
|
|
2,451.8 |
|
|
1,724.6 |
|
||||
|
Catastrophe Losses and LAE |
|
3.4 |
|
|
2.1 |
|
|
13.2 |
|
|
6.8 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-catastrophe Losses and LAE |
|
25.1 |
|
|
1.9 |
|
|
105.0 |
|
|
16.8 |
|
||||
|
Catastrophe Losses and LAE |
|
(0.1 |
) |
|
(0.1 |
) |
|
0.3 |
|
|
0.1 |
|
||||
|
Total Incurred Losses and LAE |
|
952.8 |
|
|
592.9 |
|
|
2,570.3 |
|
|
1,748.3 |
|
||||
|
Insurance Expenses |
|
194.2 |
|
|
159.5 |
|
|
570.1 |
|
|
472.8 |
|
||||
|
Operating Income (Loss) |
|
(91.8 |
) |
|
149.9 |
|
|
(128.7 |
) |
|
309.4 |
|
||||
|
Income Tax Benefit (Expense) |
|
32.5 |
|
|
(30.7 |
) |
|
57.8 |
|
|
(62.6 |
) |
||||
|
Segment Net Operating Income (Loss) |
|
$ |
(59.3 |
) |
|
$ |
119.2 |
|
|
$ |
(70.9 |
) |
|
$ |
246.8 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Ratios Based On Earned Premiums |
||||||||||||||||
|
Current Year Non-catastrophe Losses and LAE Ratio |
|
90.0 |
% |
|
67.6 |
% |
|
84.0 |
% |
|
70.3 |
% |
||||
|
Current Year Catastrophe Losses and LAE Ratio |
|
0.3 |
|
|
0.2 |
|
|
0.5 |
|
|
0.3 |
|
||||
|
|
|
2.4 |
|
|
0.2 |
|
|
3.6 |
|
|
0.7 |
|
||||
|
Prior Years Catastrophe Losses and LAE Ratio |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
|
Total Incurred Loss and LAE Ratio |
|
92.7 |
|
|
68.0 |
|
|
88.1 |
|
|
71.3 |
|
||||
|
Insurance Expense Ratio |
|
18.9 |
|
|
18.3 |
|
|
19.5 |
|
|
19.3 |
|
||||
|
Combined Ratio |
|
111.6 |
% |
|
86.3 |
% |
|
107.6 |
% |
|
90.6 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Underlying Combined Ratio1 |
||||||||||||||||
|
Current Year Non-catastrophe Losses and LAE Ratio |
|
90.0 |
% |
|
67.6 |
% |
|
84.0 |
% |
|
70.3 |
% |
||||
|
Insurance Expense Ratio |
|
18.9 |
|
|
18.3 |
|
|
19.5 |
|
|
19.3 |
|
||||
|
Underlying Combined Ratio1 |
|
108.9 |
% |
|
85.9 |
% |
|
103.5 |
% |
|
89.6 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-GAAP Measure Reconciliation |
||||||||||||||||
|
Combined Ratio |
|
111.6 |
% |
|
86.3 |
% |
|
107.6 |
% |
|
90.6 |
% |
||||
|
Less: |
|
|
|
|
|
|
|
|
||||||||
|
Current Year Catastrophe Losses and LAE Ratio |
|
0.3 |
|
|
0.2 |
|
|
0.5 |
|
|
0.3 |
|
||||
|
|
|
2.4 |
|
|
0.2 |
|
|
3.6 |
|
|
0.7 |
|
||||
|
Prior Years Catastrophe Losses and LAE Ratio |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
|
Underlying Combined Ratio1 |
|
108.9 |
% |
|
85.9 |
% |
|
103.5 |
% |
|
89.6 |
% |
||||
Unaudited selected financial information for the
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
(Dollars in Millions) |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Results of Operations |
||||||||||||||||
|
Net Premiums Written |
|
$ |
164.8 |
|
|
$ |
172.2 |
|
|
$ |
488.8 |
|
|
$ |
497.8 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earned Premiums |
|
$ |
163.7 |
|
|
$ |
174.5 |
|
|
$ |
489.1 |
|
|
$ |
519.0 |
|
|
Net Investment Income |
|
16.1 |
|
|
10.3 |
|
|
51.5 |
|
|
24.3 |
|
||||
|
Change in Value of Alternative Energy Partnership Investments |
|
(6.4 |
) |
|
— |
|
|
(12.5 |
) |
|
— |
|
||||
|
Other Income |
|
— |
|
|
— |
|
|
— |
|
|
0.1 |
|
||||
|
Total Revenues |
|
173.4 |
|
|
184.8 |
|
|
528.1 |
|
|
543.4 |
|
||||
|
Incurred Losses and LAE related to: |
|
|
|
|
|
|
|
|
||||||||
|
Current Year: |
|
|
|
|
|
|
|
|
||||||||
|
Non-catastrophe Losses and LAE |
|
115.6 |
|
|
102.8 |
|
|
328.0 |
|
|
293.8 |
|
||||
|
Catastrophe Losses and LAE |
|
23.4 |
|
|
61.9 |
|
|
71.6 |
|
|
87.3 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-catastrophe Losses and LAE |
|
— |
|
|
6.3 |
|
|
5.1 |
|
|
11.2 |
|
||||
|
Catastrophe Losses and LAE |
|
0.1 |
|
|
0.1 |
|
|
(3.6 |
) |
|
(0.6 |
) |
||||
|
Total Incurred Losses and LAE |
|
139.1 |
|
|
171.1 |
|
|
401.1 |
|
|
391.7 |
|
||||
|
Insurance Expenses |
|
51.7 |
|
|
55.5 |
|
|
154.8 |
|
|
169.7 |
|
||||
|
Operating Income (Loss) |
|
(17.4 |
) |
|
(41.8 |
) |
|
(27.8 |
) |
|
(18.0 |
) |
||||
|
Income Tax Benefit (Expense) |
|
11.0 |
|
|
9.1 |
|
|
22.7 |
|
|
4.6 |
|
||||
|
Segment Net Operating Income (Loss) |
|
$ |
(6.4 |
) |
|
$ |
(32.7 |
) |
|
$ |
(5.1 |
) |
|
$ |
(13.4 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Ratios Based On Earned Premiums |
||||||||||||||||
|
Current Year Non-catastrophe Losses and LAE Ratio |
|
70.6 |
% |
|
58.9 |
% |
|
67.1 |
% |
|
56.6 |
% |
||||
|
Current Year Catastrophe Losses and LAE Ratio |
|
14.3 |
|
|
35.5 |
|
|
14.6 |
|
|
16.8 |
|
||||
|
|
|
— |
|
|
3.6 |
|
|
1.0 |
|
|
2.2 |
|
||||
|
Prior Years Catastrophe Losses and LAE Ratio |
|
0.1 |
|
|
0.1 |
|
|
(0.7 |
) |
|
(0.1 |
) |
||||
|
Total Incurred Loss and LAE Ratio |
|
85.0 |
|
|
98.1 |
|
|
82.0 |
|
|
75.5 |
|
||||
|
Insurance Expense Ratio |
|
31.6 |
|
|
31.8 |
|
|
31.6 |
|
|
32.7 |
|
||||
|
Combined Ratio |
|
116.6 |
% |
|
129.9 |
% |
|
113.6 |
% |
|
108.2 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Underlying Combined Ratio1 |
||||||||||||||||
|
Current Year Non-catastrophe Losses and LAE Ratio |
|
70.6 |
% |
|
58.9 |
% |
|
67.1 |
% |
|
56.6 |
% |
||||
|
Insurance Expense Ratio |
|
31.6 |
|
|
31.8 |
|
|
31.6 |
|
|
32.7 |
|
||||
|
Underlying Combined Ratio1 |
|
102.2 |
% |
|
90.7 |
% |
|
98.7 |
% |
|
89.3 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-GAAP Measure Reconciliation |
||||||||||||||||
|
Combined Ratio |
|
116.6 |
% |
|
129.9 |
% |
|
113.6 |
% |
|
108.2 |
% |
||||
|
Less: |
|
|
|
|
|
|
|
|
||||||||
|
Current Year Catastrophe Losses and LAE Ratio |
|
14.3 |
|
|
35.5 |
|
|
14.6 |
|
|
16.8 |
|
||||
|
|
|
— |
|
|
3.6 |
|
|
1.0 |
|
|
2.2 |
|
||||
|
Prior Years Catastrophe Losses and LAE Ratio |
|
0.1 |
|
|
0.1 |
|
|
(0.7 |
) |
|
(0.1 |
) |
||||
|
Underlying Combined Ratio1 |
|
102.2 |
% |
|
90.7 |
% |
|
98.7 |
% |
|
89.3 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Unaudited selected financial information for the
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
(Dollars in Millions) |
|
|
|
|
|
|
|
|
||||||||
|
Results of Operations |
||||||||||||||||
|
Earned Premiums |
|
$ |
164.1 |
|
|
$ |
160.6 |
|
|
$ |
489.3 |
|
|
$ |
486.3 |
|
|
Net Investment Income |
|
48.4 |
|
|
50.7 |
|
|
151.9 |
|
|
146.0 |
|
||||
|
Change in Value of Alternative Energy Partnership Investments |
|
(6.1 |
) |
|
— |
|
|
(12.1 |
) |
|
— |
|
||||
|
Other Income |
|
0.1 |
|
|
— |
|
|
0.3 |
|
|
0.6 |
|
||||
|
Total Revenues |
|
206.5 |
|
|
211.3 |
|
|
629.4 |
|
|
632.9 |
|
||||
|
Policyholders’ Benefits and Incurred Losses and LAE |
|
119.5 |
|
|
113.6 |
|
|
353.5 |
|
|
320.2 |
|
||||
|
Insurance Expenses |
|
92.9 |
|
|
82.5 |
|
|
269.4 |
|
|
251.1 |
|
||||
|
Operating Income (Loss) |
|
(5.9 |
) |
|
15.2 |
|
|
6.5 |
|
|
61.6 |
|
||||
|
Income Tax Benefit (Expense) |
|
8.7 |
|
|
(3.0 |
) |
|
16.6 |
|
|
(11.0 |
) |
||||
|
Segment Net Operating Income (Loss) |
|
$ |
2.8 |
|
|
$ |
12.2 |
|
|
$ |
23.1 |
|
|
$ |
50.6 |
|
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 |
|
(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 for the nine and three months ended
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
A reconciliation of Net Income (Loss) to Adjusted Consolidated Net Operating Income (Loss) 1 for the three and nine months ended
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
(Dollars in Millions) (Unaudited) |
|
|
|
|
|
|
|
|
||||||||
|
Net Income (Loss) |
|
$ |
(75.3 |
) |
|
$ |
122.3 |
|
|
$ |
(14.7 |
) |
|
$ |
312.4 |
|
|
Less Net Income (Loss) From: |
|
|
|
|
|
|
|
|
||||||||
|
Change in Fair Value of |
|
(0.5 |
) |
|
35.7 |
|
|
73.0 |
|
|
(0.8 |
) |
||||
|
Net Realized Gains on Sales of Investments |
|
7.9 |
|
|
7.9 |
|
|
34.0 |
|
|
30.2 |
|
||||
|
Impairment Losses |
|
(0.5 |
) |
|
(0.8 |
) |
|
(6.2 |
) |
|
(15.8 |
) |
||||
|
Acquisition Related Transaction, Integration and Other Costs |
|
(6.4 |
) |
|
(11.4 |
) |
|
(27.5 |
) |
|
(34.2 |
) |
||||
|
Adjusted Consolidated Net Operating Income (Loss) 1 |
|
$ |
(75.8 |
) |
|
$ |
90.9 |
|
|
$ |
(88.0 |
) |
|
$ |
333.0 |
|
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 nine months ended
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
(Unaudited) |
|
|
|
|
|
|
|
|
||||||||
|
Diluted Net Income (Loss) Per Unrestricted Share |
|
$ |
(1.18 |
) |
|
$ |
1.83 |
|
|
$ |
(0.23 |
) |
|
$ |
4.67 |
|
|
Less Net Income (Loss) Per Unrestricted Share From: |
|
|
|
|
|
|
|
|
||||||||
|
Change in Fair Value of |
|
(0.01 |
) |
|
0.53 |
|
|
1.13 |
|
|
(0.01 |
) |
||||
|
Net Realized Gains on Sales of Investments |
|
0.13 |
|
|
0.12 |
|
|
0.53 |
|
|
0.45 |
|
||||
|
Impairment Losses |
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.10 |
) |
|
(0.24 |
) |
||||
|
Acquisition Related Transaction, Integration and Other Costs |
|
(0.10 |
) |
|
(0.17 |
) |
|
(0.43 |
) |
|
(0.51 |
) |
||||
|
Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share1 |
|
$ |
(1.19 |
) |
|
$ |
1.36 |
|
|
$ |
(1.36 |
) |
|
$ |
4.98 |
|
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
|
(Dollars in Millions) (Unaudited) |
|
|
|
|
||||
|
Shareholders’ Equity |
|
$ |
4,151.2 |
|
|
$ |
4,563.4 |
|
|
Net Unrealized Gains on Fixed Maturities |
|
526.9 |
|
|
724.0 |
|
||
|
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities1 |
|
$ |
3,624.3 |
|
|
$ |
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
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
|
(Dollars in Millions, Except Per Share Amounts) (Unaudited) |
|
Kemper |
|
Less Impact of |
|
As Adjusted |
||||||
|
Net Income (Loss) |
|
$ |
(75.3 |
) |
|
$ |
(6.7 |
) |
|
$ |
(68.6 |
) |
|
Net Income (Loss) Per Share - Diluted |
|
$ |
(1.18 |
) |
|
$ |
(0.10 |
) |
|
$ |
(1.08 |
) |
|
Specialty Property & Casualty Insurance Segment: |
|
|
|
|
|
|
||||||
|
Earned Premiums |
|
$ |
1,028.3 |
|
|
$ |
— |
|
|
$ |
1,028.3 |
|
|
Segment Net Operating Income (Loss) |
|
$ |
(59.3 |
) |
|
$ |
(7.0 |
) |
|
$ |
(52.3 |
) |
|
|
|
|
|
|
|
|
||||||
|
Earned Premiums |
|
$ |
920.6 |
|
|
$ |
— |
|
|
$ |
920.6 |
|
|
Segment Net Operating Income (Loss) |
|
$ |
(71.8 |
) |
|
$ |
(6.6 |
) |
|
$ |
(65.2 |
) |
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
|
(Dollars in Millions, Except Per Share Amounts) (Unaudited) |
|
Kemper |
|
AAC Historical |
|
Less Impact of |
|
As Adjusted |
||||||||
|
Net Income (Loss) |
|
$ |
122.3 |
|
|
$ |
14.4 |
|
|
$ |
(3.2 |
) |
|
$ |
139.9 |
|
|
Net Income (Loss) Per Share - Diluted |
|
$ |
1.83 |
|
|
$ |
0.22 |
|
|
$ |
(0.05 |
) |
|
$ |
2.10 |
|
|
Specialty Property & Casualty Insurance Segment: |
|
|
|
|
|
|
|
|
||||||||
|
Earned Premiums |
|
$ |
871.4 |
|
|
$ |
92.6 |
|
|
$ |
— |
|
|
$ |
964.0 |
|
|
Segment Net Operating Income (Loss) |
|
$ |
119.2 |
|
|
$ |
12.4 |
|
|
$ |
(3.6 |
) |
|
$ |
135.2 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earned Premiums |
|
$ |
792.2 |
|
|
$ |
92.6 |
|
|
$ |
— |
|
|
$ |
884.8 |
|
|
Segment Net Operating Income (Loss) |
|
$ |
100.1 |
|
|
$ |
12.4 |
|
|
$ |
(2.7 |
) |
|
$ |
115.2 |
|
Conference Call
Kemper will host its conference call to discuss third quarter 2021 results on
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 third 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
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. Forward-looking statements give expectations or forecasts of future events and can be identified by the fact that they relate to future actions, performance or results rather than strictly to historical or current facts. Any or all forward-looking statements may turn out to be wrong, and, accordingly, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this press release. Forward-looking statements involve a number of risks and uncertainties that are difficult to predict and are not guarantees of future performance. Among the general factors that could cause actual results and financial condition to differ materially from estimated results and financial condition are those factors listed in periodic reports filed by Kemper with the
No assurances can be given that the results and financial condition contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable. 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. The reader is advised, however, to consult any further disclosures Kemper makes on related subjects in its filings with the
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