Kemper Reports Third Quarter 2026 Operating Results*
CHICAGO--(BUSINESS WIRE)--Kemper Corporation (NYSE: KMPR) reported Net Income of $52.4 million, or $0.88 per diluted share, for the third quarter of 2026, compared to Net Loss of $21.0 million, or $(0.34) per share, for the third quarter of 2025.
Adjusted Consolidated Net Operating Income1 was $59.9 million, or $1.01 per diluted share, for the third quarter of 2026, compared to $20.4 million, or $0.33 per share, for the third quarter of 2025.
Summary of quarterly performance:
- Strong sequential earnings improvement, led by improved Personal Auto performance
- Personal Auto profitability continued to improve, reflecting the cumulative benefits of our rate and non-rate actions
- California Personal Auto Combined Ratio and Underlying Combined Ratio1 improved 12 points and 7 points, respectively, since 1Q’26
- Continued to strengthen leadership across P&C, Life, claims and distribution
“Our third-quarter results demonstrate continued progress as the actions we’ve taken to improve profitability are taking hold,” said Stephen J. McAnena, President and Chief Executive Officer. “While there is more work ahead, we are moving in the right direction and remain focused on restoring profitability and building capabilities to position Kemper for durable, profitable growth.”
*Unless otherwise specified, discussion of our third quarter 2026 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 condensed consolidated financial results in this release. The results of Kemper Reciprocal are consolidated under US GAAP. |
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) |
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
| ||||||||
Net Income (Loss) |
| $ | 52.4 |
|
| $ | (21.0 | ) |
| $ | (414.1 | ) |
| $ | 151.3 |
|
Adjusted Consolidated Net Operating Income1 |
| $ | 59.9 |
|
| $ | 20.4 |
|
| $ | 98.7 |
|
| $ | 210.9 |
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of Catastrophe Losses and Related Loss Adjustment Expense (LAE) on Net Income (Loss) |
| $ | (2.3 | ) |
| $ | (0.6 | ) |
| $ | (10.3 | ) |
| $ | (12.3 | ) |
|
|
|
|
|
|
|
|
| ||||||||
Diluted Net Income (Loss) Per Share From: |
|
|
|
|
|
|
|
| ||||||||
Net Income (Loss) |
| $ | 0.88 |
|
| $ | (0.34 | ) |
| $ | (7.04 | ) |
| $ | 2.37 |
|
Adjusted Consolidated Net Operating Income1 |
| $ | 1.01 |
|
| $ | 0.33 |
|
| $ | 1.68 |
|
| $ | 3.31 |
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of Catastrophe Losses and Related LAE on Net Income (Loss) Per Share |
| $ | (0.04 | ) |
| $ | (0.01 | ) |
| $ | (0.18 | ) |
| $ | (0.20 | ) |
Revenues
Total Revenues for the third quarter of 2026 decreased $149.1 million to $1,090.6 million compared to the third quarter of 2025. The decline was primarily due to lower Specialty Personal Automobile volumes, partially offset by higher Specialty Commercial Automobile volumes.
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) |
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
| ||||||||
Segment Adjusted Net Operating Income: |
|
|
|
|
|
|
|
| ||||||||
Specialty Property & Casualty Insurance |
| $ | 54.4 |
|
| $ | 7.6 |
|
| $ | 70.3 |
|
| $ | 184.5 |
|
Life Insurance |
|
| 19.8 |
|
|
| 18.6 |
|
|
| 56.1 |
|
|
| 48.4 |
|
Total Segment Adjusted Net Operating Income |
|
| 74.2 |
|
|
| 26.2 |
|
|
| 126.4 |
|
|
| 232.9 |
|
Corporate and Other Adjusted Net Operating Loss |
|
| (13.0 | ) |
|
| (9.0 | ) |
|
| (30.3 | ) |
|
| (30.7 | ) |
Less: Net Income (Loss) attributable to Noncontrolling Interest |
|
| 1.3 |
|
|
| (3.2 | ) |
|
| (2.6 | ) |
|
| (8.7 | ) |
Adjusted Consolidated Net Operating Income1 |
|
| 59.9 |
|
|
| 20.4 |
|
|
| 98.7 |
|
|
| 210.9 |
|
Net Income (Loss) From: |
|
|
|
|
|
|
|
| ||||||||
Change in Fair Value of Equity and Convertible Securities |
|
| 2.6 |
|
|
| (1.7 | ) |
|
| 0.2 |
|
|
| (2.0 | ) |
Net Realized Investment (Losses) Gains |
|
| (0.9 | ) |
|
| 3.1 |
|
|
| (0.1 | ) |
|
| 3.7 |
|
Impairment Losses |
|
| (2.9 | ) |
|
| (2.5 | ) |
|
| (23.0 | ) |
|
| (5.1 | ) |
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs |
|
| (6.4 | ) |
|
| (19.6 | ) |
|
| (23.0 | ) |
|
| (27.6 | ) |
Debt Extinguishment and Other Charges |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.4 |
|
Goodwill Impairment |
|
| — |
|
|
| — |
|
|
| (460.0 | ) |
|
| — |
|
Non-Core Operations |
|
| 0.1 |
|
|
| (20.7 | ) |
|
| (6.9 | ) |
|
| (29.0 | ) |
Net Income (Loss) attributable to Kemper Corporation |
| $ | 52.4 |
|
| $ | (21.0 | ) |
| $ | (414.1 | ) |
| $ | 151.3 |
|
The Specialty Property and Casualty Insurance segment reported Adjusted Net Operating Income of $54.4 million in the third quarter of 2026, compared to Adjusted Net Operating Income of $7.6 million in the third quarter of 2025. The $24.6 million increase in Specialty Personal Automobile was primarily driven by favorable prior year development. The $22.2 million increase in Specialty Commercial Automobile was primarily driven by lower adverse prior year development, partially offset by higher underlying losses resulting primarily from higher claim severity.
The Life Insurance segment reported Adjusted Net Operating Income of $19.8 million for the third quarter of 2026, compared to Adjusted Net Operating Income of $18.6 million in the third quarter of 2025. The improvement was primarily driven by higher Earned Premiums, partially offset by higher Policyholders’ Benefits from life insurance products.
Capital
Total Kemper Corporation Shareholders’ Equity as of September 30, 2026 was $2,133.3 million, a decrease of $548.1 million, or 20 percent, since year-end 2025 primarily driven by comprehensive losses for the period. Kemper and its direct non-insurance subsidiaries ended the quarter with cash and investments of $90.8 million, and $350.0 million of available borrowing capacity under the revolving credit agreement.
On August 5, 2026, Kemper announced that its Board of Directors declared a quarterly dividend of $0.32 per share, or $18.9 million. The dividend was paid on September 4, 2026, to its shareholders of record as of August 21, 2026.
Kemper ended the quarter with a book value per share of $36.20, a decrease of 21 percent from $45.71 at the end of 2025. Adjusted book value per share1 was $28.13 at the end of the quarter, compared to $28.06 at the end of 2025.
Unaudited Condensed Consolidated Statements of Income (Loss) for the three and nine months ended September 30, 2026 and 2025 are presented below.
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(Dollars in Millions, Except Per Share Amounts) |
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
| ||||||||
Revenues: |
|
|
|
|
|
|
|
| ||||||||
Earned Premiums2 |
| $ | 983.4 |
|
| $ | 1,133.3 |
|
| $ | 2,994.3 |
|
| $ | 3,352.0 |
|
Net Investment Income |
|
| 107.3 |
|
|
| 104.8 |
|
|
| 319.8 |
|
|
| 301.9 |
|
Other Income |
|
| 1.5 |
|
|
| 2.9 |
|
|
| 5.4 |
|
|
| 8.6 |
|
Change in Fair Value of Equity and Convertible Securities |
|
| 3.2 |
|
|
| (2.1 | ) |
|
| 0.2 |
|
|
| (2.5 | ) |
Net Realized Investment (Losses) Gains |
|
| (1.1 | ) |
|
| 3.9 |
|
|
| (0.1 | ) |
|
| 4.7 |
|
Impairment Losses |
|
| (3.7 | ) |
|
| (3.1 | ) |
|
| (29.1 | ) |
|
| (6.4 | ) |
Total Revenues |
|
| 1,090.6 |
|
|
| 1,239.7 |
|
|
| 3,290.5 |
|
|
| 3,658.3 |
|
Expenses: |
|
|
|
|
|
|
|
| ||||||||
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses3 |
|
| 752.6 |
|
|
| 924.6 |
|
|
| 2,399.8 |
|
|
| 2,521.0 |
|
Insurance and Other Expenses |
|
| 264.9 |
|
|
| 339.1 |
|
|
| 814.3 |
|
|
| 933.6 |
|
Interest Expense |
|
| 9.0 |
|
|
| 9.1 |
|
|
| 27.2 |
|
|
| 29.5 |
|
Goodwill Impairment |
|
| — |
|
|
| — |
|
|
| 460.0 |
|
|
| — |
|
Total Expenses |
|
| 1,026.5 |
|
|
| 1,272.8 |
|
|
| 3,701.3 |
|
|
| 3,484.1 |
|
Income (Loss) before Income Taxes |
|
| 64.1 |
|
|
| (33.1 | ) |
|
| (410.8 | ) |
|
| 174.2 |
|
Income Tax Expense (Benefit) |
|
| 10.4 |
|
|
| (8.9 | ) |
|
| 5.9 |
|
|
| 31.6 |
|
Net Income (Loss) |
|
| 53.7 |
|
|
| (24.2 | ) |
|
| (416.7 | ) |
|
| 142.6 |
|
Less: Net Income (Loss) attributable to Noncontrolling Interest |
|
| 1.3 |
|
|
| (3.2 | ) |
|
| (2.6 | ) |
|
| (8.7 | ) |
Net Income (Loss) attributable to Kemper Corporation |
| $ | 52.4 |
|
| $ | (21.0 | ) |
| $ | (414.1 | ) |
| $ | 151.3 |
|
|
|
|
|
|
|
|
|
| ||||||||
Net Income (Loss) attributable to Kemper Corporation per Unrestricted Share: |
|
|
|
|
|
|
|
| ||||||||
Basic |
| $ | 0.89 |
|
| $ | (0.34 | ) |
| $ | (7.04 | ) |
| $ | 2.40 |
|
Diluted |
| $ | 0.88 |
|
| $ | (0.34 | ) |
| $ | (7.04 | ) |
| $ | 2.37 |
|
|
|
|
|
|
|
|
| |||||||||
Weighted-average Outstanding (Shares in Thousands): |
|
|
|
|
|
|
|
| ||||||||
Unrestricted Shares - Basic |
|
| 58,923.1 |
|
|
| 61,477.4 |
|
|
| 58,844.6 |
|
|
| 63,092.2 |
|
Unrestricted Shares and Equivalent Shares - Diluted |
|
| 59,587.8 |
|
|
| 61,477.4 |
|
|
| 58,844.6 |
|
|
| 63,720.4 |
|
|
|
|
|
|
|
|
| |||||||||
Dividends Paid to Shareholders per Share |
| $ | 0.32 |
|
| $ | 0.32 |
|
| $ | 0.96 |
|
| $ | 0.96 |
|
|
|
|
|
|
|
|
| |||||||||
2 Includes a remeasurement gain of $12.6 million and a remeasurement loss of $0.9 million for the three months ended September 30, 2026 and 2025, respectively, related to the deferred profit liability within the Life insurance business. There was a remeasurement gain of $13.3 million for the nine months ended September 30, 2026 and a remeasurement loss of $1.6 million for the nine months ended September 30, 2025. | ||||||||||||||||
3 Includes a remeasurement loss of $9.2 million and a remeasurement gain of $1.8 million for the three months ended September 30, 2026 and 2025, respectively, related to the liability for future policyholder benefits within the Life insurance business. There was a remeasurement loss of $6.9 million and a remeasurement gain of $1.8 million for the nine months ended September 30, 2026 and 2025, respectively. | ||||||||||||||||
Unaudited business segment revenues for the three and nine months ended September 30, 2026 and 2025 are presented below.
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(Dollars in Millions) |
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
| ||||||||
REVENUES: |
|
|
|
|
|
|
|
| ||||||||
Specialty Property & Casualty Insurance: |
|
|
|
|
|
|
|
| ||||||||
Earned Premiums: |
|
|
|
|
|
|
|
| ||||||||
Personal Automobile |
| $ | 599.9 |
|
| $ | 785.1 |
|
| $ | 1,894.3 |
|
| $ | 2,328.1 |
|
Commercial Automobile |
|
| 258.0 |
|
|
| 232.2 |
|
|
| 745.4 |
|
|
| 662.2 |
|
Total Earned Premiums |
|
| 857.9 |
|
|
| 1,017.3 |
|
|
| 2,639.7 |
|
|
| 2,990.3 |
|
Net Investment Income |
|
| 58.5 |
|
|
| 53.8 |
|
|
| 167.5 |
|
|
| 153.9 |
|
Other Income |
|
| 1.0 |
|
|
| 2.5 |
|
|
| 5.0 |
|
|
| 6.5 |
|
Total Specialty Property & Casualty Insurance Revenues |
|
| 917.4 |
|
|
| 1,073.6 |
|
|
| 2,812.2 |
|
|
| 3,150.7 |
|
Life Insurance: |
|
|
|
|
|
|
|
| ||||||||
Earned Premiums: |
|
|
|
|
|
|
|
| ||||||||
Life |
|
| 100.8 |
|
|
| 84.1 |
|
|
| 273.9 |
|
|
| 252.6 |
|
Accident & Health |
|
| 5.3 |
|
|
| 5.5 |
|
|
| 16.0 |
|
|
| 16.4 |
|
Property |
|
| 9.6 |
|
|
| 10.2 |
|
|
| 29.3 |
|
|
| 31.0 |
|
Total Earned Premiums |
|
| 115.7 |
|
|
| 99.8 |
|
|
| 319.2 |
|
|
| 300.0 |
|
Net Investment Income |
|
| 49.9 |
|
|
| 48.0 |
|
|
| 147.9 |
|
|
| 141.1 |
|
Other Income |
|
| 0.2 |
|
|
| 0.4 |
|
|
| 0.9 |
|
|
| 1.4 |
|
Total Life Insurance Revenues |
|
| 165.8 |
|
|
| 148.2 |
|
|
| 468.0 |
|
|
| 442.5 |
|
Total Segment Revenues |
|
| 1,083.2 |
|
|
| 1,221.8 |
|
|
| 3,280.2 |
|
|
| 3,593.2 |
|
Change in Fair Value of Equity and Convertible Securities |
|
| 3.2 |
|
|
| (2.1 | ) |
|
| 0.2 |
|
|
| (2.5 | ) |
Non-Core Operations |
|
| 11.9 |
|
|
| 18.2 |
|
|
| 41.7 |
|
|
| 67.4 |
|
Net Realized Investment (Losses) Gains, Impairment Losses, and Other2 |
|
| (7.7 | ) |
|
| 1.8 |
|
|
| (31.6 | ) |
|
| 0.2 |
|
Total Revenues |
| $ | 1,090.6 |
|
| $ | 1,239.7 |
|
| $ | 3,290.5 |
|
| $ | 3,658.3 |
|
|
|
|
|
|
|
|
|
| ||||||||
2 In the fourth quarter of 2025, the Company elected to change the presentation of Net Realized Investment (Losses) Gains, Impairment Losses, and Other by combining them into a single line item. Prior-period amounts have been recast to conform to the current-period presentation. | ||||||||||||||||
KEMPER CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Millions) (Unaudited) | |||||
| |||||
|
Sep 30,
|
|
Dec 31,
| ||
Assets: |
|
|
| ||
Investments: |
|
|
| ||
Fixed Maturities at Fair Value | $ | 6,319.8 |
| $ | 6,743.3 |
Equity Securities at Fair Value |
| 311.0 |
|
| 306.4 |
Equity Method Limited Liability Investments |
| 182.7 |
|
| 176.0 |
Short-term Investments at Cost which Approximates Fair Value |
| 343.8 |
|
| 313.5 |
Company-Owned Life Insurance |
| 560.8 |
|
| 579.2 |
Loans to Policyholders |
| 279.9 |
|
| 279.9 |
Other Investments |
| 272.1 |
|
| 271.3 |
Total Investments |
| 8,270.1 |
|
| 8,669.6 |
Cash |
| 80.4 |
|
| 124.3 |
Receivables from Policyholders |
| 968.2 |
|
| 965.2 |
Other Receivables |
| 227.7 |
|
| 184.7 |
Deferred Policy Acquisition Costs |
| 682.4 |
|
| 655.4 |
Goodwill |
| 783.5 |
|
| 1,250.7 |
Current Income Tax Assets |
| 46.1 |
|
| 40.7 |
Deferred Income Tax Assets |
| 120.3 |
|
| 96.9 |
Other Assets |
| 386.9 |
|
| 410.7 |
Assets of Consolidated Variable Interest Entity: |
|
|
| ||
Fixed Maturities at Fair Value |
| 38.9 |
|
| 42.1 |
Short-term Investments at Cost which Approximates Fair Value |
| 13.5 |
|
| 14.4 |
Cash |
| 0.1 |
|
| 1.7 |
Receivables from Policyholders |
| 1.5 |
|
| 10.4 |
Other Receivables |
| 0.7 |
|
| 0.4 |
Deferred Policy Acquisition Costs |
| 0.5 |
|
| 1.3 |
Deferred Income Tax Assets |
| 3.9 |
|
| 4.2 |
Total Assets | $ | 11,624.7 |
| $ | 12,472.7 |
KEMPER CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Continued) (Dollars in Millions) (Unaudited) | |||||||
| |||||||
|
Sep 30,
|
|
Dec 31,
| ||||
|
|
|
| ||||
Liabilities and Shareholders’ Equity: |
|
|
| ||||
Insurance Reserves: |
|
|
| ||||
Life and Health | $ | 3,044.7 |
|
| $ | 3,287.5 |
|
Property and Casualty |
| 3,082.0 |
|
|
| 2,910.8 |
|
Total Insurance Reserves |
| 6,126.7 |
|
|
| 6,198.3 |
|
Unearned Premiums |
| 1,208.7 |
|
|
| 1,233.1 |
|
Policyholder Obligations |
| 514.2 |
|
|
| 608.0 |
|
Deferred Income Tax Liabilities |
| — |
|
|
| 14.8 |
|
Accrued Expenses and Other Liabilities |
| 679.6 |
|
|
| 762.6 |
|
Long-term Debt, Non-Current, at Amortized Cost |
| 945.0 |
|
|
| 943.5 |
|
Liabilities of Consolidated Variable Interest Entity: |
|
|
| ||||
Insurance Reserves |
| 28.1 |
|
|
| 29.4 |
|
Unearned Premiums |
| 3.3 |
|
|
| 12.1 |
|
Accrued Expenses and Other Liabilities |
| 0.6 |
|
|
| 1.5 |
|
Total Liabilities |
| 9,506.2 |
|
|
| 9,803.3 |
|
Kemper Corporation Shareholders’ Equity: |
|
|
| ||||
Common Stock |
| 5.9 |
|
|
| 5.9 |
|
Paid-in Capital |
| 1,740.1 |
|
|
| 1,723.9 |
|
Retained Earnings |
| 687.2 |
|
|
| 1,157.8 |
|
Accumulated Other Comprehensive Loss |
| (299.9 | ) |
|
| (206.2 | ) |
Total Kemper Corporation Shareholders’ Equity |
| 2,133.3 |
|
|
| 2,681.4 |
|
Noncontrolling Interest |
| (14.8 | ) |
|
| (12.0 | ) |
Total Shareholders’ Equity |
| 2,118.5 |
|
|
| 2,669.4 |
|
Total Liabilities and Shareholders’ Equity | $ | 11,624.7 |
|
| $ | 12,472.7 |
|
Unaudited selected financial information for the Specialty Property & Casualty Insurance segment follows.
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(Dollars in Millions) |
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||
Results of Operations | ||||||||||||||||
Net Premiums Written |
| $ | 838.7 |
|
| $ | 982.2 |
|
| $ | 2,618.4 |
|
| $ | 3,052.5 |
|
|
|
|
|
|
|
|
|
| ||||||||
Earned Premiums |
| $ | 857.9 |
|
| $ | 1,017.3 |
|
| $ | 2,639.7 |
|
| $ | 2,990.3 |
|
Net Investment Income |
|
| 58.5 |
|
|
| 53.8 |
|
|
| 167.5 |
|
|
| 153.9 |
|
Other Income |
|
| 1.0 |
|
|
| 2.5 |
|
|
| 5.0 |
|
|
| 6.5 |
|
Total Revenues |
|
| 917.4 |
|
|
| 1,073.6 |
|
|
| 2,812.2 |
|
|
| 3,150.7 |
|
Incurred Losses and LAE related to: |
|
|
|
|
|
|
|
| ||||||||
Current Year: |
|
|
|
|
|
|
|
| ||||||||
Non-catastrophe Losses and LAE |
|
| 691.9 |
|
|
| 798.7 |
|
|
| 2,167.4 |
|
|
| 2,211.1 |
|
Catastrophe Losses and LAE |
|
| 2.0 |
|
|
| 1.0 |
|
|
| 9.4 |
|
|
| 10.1 |
|
Prior Years: |
|
|
|
|
|
|
|
| ||||||||
Non-catastrophe Losses and LAE |
|
| (23.2 | ) |
|
| 51.4 |
|
|
| (10.9 | ) |
|
| 65.5 |
|
Catastrophe Losses and LAE |
|
| — |
|
|
| — |
|
|
| 0.5 |
|
|
| 0.6 |
|
Total Incurred Losses and LAE |
|
| 670.7 |
|
|
| 851.1 |
|
|
| 2,166.4 |
|
|
| 2,287.3 |
|
Insurance Expenses |
|
| 180.2 |
|
|
| 214.6 |
|
|
| 560.7 |
|
|
| 634.5 |
|
Segment Adjusted Operating Income |
|
| 66.5 |
|
|
| 7.9 |
|
|
| 85.1 |
|
|
| 228.9 |
|
Income Tax Expense |
|
| 12.1 |
|
|
| 0.3 |
|
|
| 14.8 |
|
|
| 44.4 |
|
Total Segment Adjusted Net Operating Income |
| $ | 54.4 |
|
| $ | 7.6 |
|
| $ | 70.3 |
|
| $ | 184.5 |
|
|
|
|
|
|
|
|
|
| ||||||||
Ratios Based On Earned Premiums | ||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio |
|
| 80.7 | % |
|
| 78.5 | % |
|
| 82.1 | % |
|
| 74.0 | % |
Current Year Catastrophe Losses and LAE Ratio |
|
| 0.2 |
|
|
| 0.1 |
|
|
| 0.4 |
|
|
| 0.3 |
|
Prior Years Non-catastrophe Losses and LAE Ratio |
|
| (2.7 | ) |
|
| 5.1 |
|
|
| (0.4 | ) |
|
| 2.2 |
|
Prior Years Catastrophe Losses and LAE Ratio |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total Incurred Loss and LAE Ratio |
|
| 78.2 |
|
|
| 83.7 |
|
|
| 82.1 |
|
|
| 76.5 |
|
Insurance Expense Ratio |
|
| 21.0 |
|
|
| 21.1 |
|
|
| 21.2 |
|
|
| 21.2 |
|
Combined Ratio |
|
| 99.2 | % |
|
| 104.8 | % |
|
| 103.3 | % |
|
| 97.7 | % |
|
|
|
|
|
|
|
|
| ||||||||
Underlying Combined Ratio1 | ||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio |
|
| 80.7 | % |
|
| 78.5 | % |
|
| 82.1 | % |
|
| 74.0 | % |
Insurance Expense Ratio |
|
| 21.0 |
|
|
| 21.1 |
|
|
| 21.2 |
|
|
| 21.2 |
|
Underlying Combined Ratio1 |
|
| 101.7 | % |
|
| 99.6 | % |
|
| 103.3 | % |
|
| 95.2 | % |
|
|
|
|
|
|
|
|
| ||||||||
Non-GAAP Measure Reconciliation | ||||||||||||||||
Combined Ratio |
|
| 99.2 | % |
|
| 104.8 | % |
|
| 103.3 | % |
|
| 97.7 | % |
Less: |
|
|
|
|
|
|
|
| ||||||||
Current Year Catastrophe Losses and LAE Ratio |
|
| 0.2 |
|
|
| 0.1 |
|
|
| 0.4 |
|
|
| 0.3 |
|
Prior Years Non-catastrophe Losses and LAE Ratio |
|
| (2.7 | ) |
|
| 5.1 |
|
|
| (0.4 | ) |
|
| 2.2 |
|
Prior Years Catastrophe Losses and LAE Ratio |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Underlying Combined Ratio1 |
|
| 101.7 | % |
|
| 99.6 | % |
|
| 103.3 | % |
|
| 95.2 | % |
Unaudited selected financial information for the Life Insurance segment follows.
| Three Months Ended |
| Nine Months Ended | |||||||||
(Dollars in Millions) |
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
| ||||
|
|
|
|
|
|
|
|
| ||||
Results of Operations | ||||||||||||
Earned Premiums |
| $ | 115.7 |
| $ | 99.8 |
| $ | 319.2 |
| $ | 300.0 |
Net Investment Income |
|
| 49.9 |
|
| 48.0 |
|
| 147.9 |
|
| 141.1 |
Other Income |
|
| 0.2 |
|
| 0.4 |
|
| 0.9 |
|
| 1.4 |
Total Revenues |
|
| 165.8 |
|
| 148.2 |
|
| 468.0 |
|
| 442.5 |
Policyholders’ Benefits and Incurred Losses and LAE |
|
| 75.0 |
|
| 60.5 |
|
| 202.5 |
|
| 186.2 |
Insurance Expenses |
|
| 67.9 |
|
| 65.6 |
|
| 199.8 |
|
| 199.7 |
Segment Adjusted Operating Income |
|
| 22.9 |
|
| 22.1 |
|
| 65.7 |
|
| 56.6 |
Income Tax Expense |
|
| 3.1 |
|
| 3.5 |
|
| 9.6 |
|
| 8.2 |
Total Segment Adjusted Net Operating Income |
| $ | 19.8 |
| $ | 18.6 |
| $ | 56.1 |
| $ | 48.4 |
Use of Non-GAAP Financial Measures
Adjusted Consolidated Net Operating Income 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) Change in Fair Value of Equity and Convertible Securities;
(ii) Net Realized Investment (Losses) Gains;
(iii) Impairment Losses;
(iv) Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs;
(v) Debt Extinguishment and Other Charges;
(vi) Goodwill Impairment;
(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 for the three and nine months ended September 30, 2026 or 2025.
Kemper believes that Adjusted Consolidated Net Operating Income 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. Change in Fair Value of Equity and Convertible Securities, Net Realized Investment (Losses) Gains 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 business decisions which are unrelated to the insurance underwriting process. In the second quarter of 2026, the Company completed the sale of Newins and recorded a gain in connection with the transaction. In the third quarter of 2025, a restructuring program was launched to achieve operational and organizational efficiencies. The Company will continue to evaluate additional efficiency opportunities through 2027. Debt Extinguishment 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; and (ii) other charges that are non-standard, not part of the ordinary course of business, and unrelated to the insurance underwriting process. Goodwill Impairments 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 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 for the three and nine months ended September 30, 2026 and 2025 is presented below.
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(Dollars in Millions) (Unaudited) |
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
| ||||||||
Net Income (Loss) attributable to Kemper Corporation |
| $ | 52.4 |
|
| $ | (21.0 | ) |
| $ | (414.1 | ) |
| $ | 151.3 |
|
Less Net Income (Loss) From: |
|
|
|
|
|
|
|
| ||||||||
Change in Fair Value of Equity and Convertible Securities |
|
| 2.6 |
|
|
| (1.7 | ) |
|
| 0.2 |
|
|
| (2.0 | ) |
Net Realized Investment (Losses) Gains |
|
| (0.9 | ) |
|
| 3.1 |
|
|
| (0.1 | ) |
|
| 3.7 |
|
Impairment Losses |
|
| (2.9 | ) |
|
| (2.5 | ) |
|
| (23.0 | ) |
|
| (5.1 | ) |
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs |
|
| (6.4 | ) |
|
| (19.6 | ) |
|
| (23.0 | ) |
|
| (27.6 | ) |
Debt Extinguishment and Other Charges |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.4 |
|
Goodwill Impairment |
|
| — |
|
|
| — |
|
|
| (460.0 | ) |
|
| — |
|
Non-Core Operations |
|
| 0.1 |
|
|
| (20.7 | ) |
|
| (6.9 | ) |
|
| (29.0 | ) |
Adjusted Consolidated Net Operating Income |
| $ | 59.9 |
|
| $ | 20.4 |
|
| $ | 98.7 |
|
| $ | 210.9 |
|
Diluted Adjusted Consolidated Net Operating Income per Unrestricted Share is a non-GAAP financial measure computed by dividing Adjusted Consolidated Net Operating Income by the weighted-average unrestricted shares and equivalent shares outstanding. The most directly comparable GAAP financial measure is Diluted Net Income (Loss) attributable to Kemper Corporation per Unrestricted Share.
A reconciliation of Diluted Net Income (Loss) attributable to Kemper Corporation per Unrestricted Share to Diluted Adjusted Consolidated Net Operating Income per Unrestricted Share for the three and nine months ended September 30, 2026 and 2025 is presented below.
|
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(Unaudited) |
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
|
|
Sep 30,
| ||||||||
Diluted Net Income (Loss) attributable to Kemper Corporation per Unrestricted Share |
| $ | 0.88 |
|
| $ | (0.34 | ) |
| $ | (7.04 | ) |
| $ | 2.37 |
|
Less Net Income (Loss) per Unrestricted Share From: |
|
|
|
|
|
|
|
| ||||||||
Change in Fair Value of Equity and Convertible Securities |
|
| 0.04 |
|
|
| (0.03 | ) |
|
| — |
|
|
| (0.03 | ) |
Net Realized Investment (Losses) Gains |
|
| (0.01 | ) |
|
| 0.05 |
|
|
| — |
|
|
| 0.06 |
|
Impairment Losses |
|
| (0.05 | ) |
|
| (0.04 | ) |
|
| (0.39 | ) |
|
| (0.08 | ) |
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs |
|
| (0.11 | ) |
|
| (0.32 | ) |
|
| (0.39 | ) |
|
| (0.44 | ) |
Debt Extinguishment and Other Charges |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.01 |
|
Goodwill Impairment |
|
| — |
|
|
| — |
|
|
| (7.82 | ) |
|
| — |
|
Non-Core Operations |
|
| — |
|
|
| (0.33 | ) |
|
| (0.12 | ) |
|
| (0.46 | ) |
Diluted Adjusted Consolidated Net Operating Income per Unrestricted Share |
| $ | 1.01 |
|
| $ | 0.33 |
|
| $ | 1.68 |
|
| $ | 3.31 |
|
Return on Adjusted Shareholders' Equity is a calculation that uses a non-GAAP financial measure. It is calculated by dividing the period’s annualized Net Income (Loss) attributable to Kemper Corporation, excluding the annualization of the after-tax goodwill impairment and the credit loss allowance recognized on the Reciprocal Exchange surplus notes, 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 Shareholders’ Equity is the most directly comparable GAAP measure.
Contacts
Investors: Michael Marinaccio 312.661.4930 or investors@kemper.com
Media: Barbara Ciesemier 312.661.4521 or bciesemier@kemper.com
Read full story here
Mentioned In This Article
Latest News
| Nov-10 | |
| Nov-09 | |
| Nov-09 | |
| Nov-05 | |
| Nov-02 | |
| Oct-28 | |
| Sep-24 | |
| Aug-06 | |
| Aug-05 | |
| Aug-05 | |
| Aug-05 | |
| Aug-05 | |
| Jul-23 | |
| Jul-21 | |
| May-27 |
