CHICAGO--(BUSINESS WIRE)--
Kemper
Corporation (NYSE: KMPR) reported today net income of $25.4 million
($0.42 per share) for the fourth quarter of 2011, compared to net income
of $62.9 million ($1.03 per share) for the fourth quarter of 2010. Net
income was $83.7 million ($1.38 per share) for the year ended
December 31, 2011, compared to $184.6 million ($2.98 per share) for the
year ended December 31, 2010.
Consolidated net operating income1 was $25.2 million ($0.42
per share) for the fourth quarter of 2011, compared to consolidated net
operating income of $39.7 million ($0.65 per share) for the fourth
quarter of 2010. Consolidated net operating income was $56.3 million
($0.93 per share) for the year ended December 31, 2011, compared to
consolidated net operating income of $151.9 million ($2.45 per share)
for the year ended December 31, 2010.
|
| |
| |
| |
Three Months Ended
| |
Year Ended
|
| | Dec 31,
|
| Dec 31,
| | Dec 31,
|
| Dec 31,
|
|
(Dollars in millions, except per share amounts) (Unaudited)
| |
2011
| |
2010
| |
2011
| |
2010
|
|
Consolidated Net Operating Income
| |
$
|
25.2
| | |
$
|
39.7
| | |
$
|
56.3
| | |
$
|
151.9
| |
|
Income from Continuing Operations
| |
26.1
| | |
55.7
| | |
70.9
| | |
169.1
| |
|
Net Income
| |
25.4
| | |
62.9
| | |
83.7
| | |
184.6
| |
| | | | | | | |
|
| Impact of Catastrophe Losses and Loss Adjustment Expense (LAE) on
Net Income | | $ | (4.6 | ) | | $ | (14.0 | ) | | $ | (106.5 | ) | | $ | (51.5 | ) |
| | | | | | | |
|
|
Basic Net Income Per Share From:
| | | | | | | | |
|
Consolidated Net Operating Income1 | |
$
|
0.42
| | |
$
|
0.65
| | |
$
|
0.93
| | |
$
|
2.45
| |
|
Continuing Operations
| |
0.43
| | |
0.91
| | |
1.17
| | |
2.73
| |
|
Net Income
| |
0.42
| | |
1.03
| | |
1.38
| | |
2.98
| |
| | | | | | | |
|
| Impact of Catastrophe Losses and LAE on Net Income Per Share | | $ | (0.08 | ) | | $ | (0.23 | ) | | $ | (1.76 | ) | | $ | (0.83 | ) |
| | | | | | | | | | | | | | | |
|
1 Consolidated net operating income is an after-tax, Non-GAAP
financial measure and is not computed in accordance with accounting
principles generally accepted in the United States. See "Use of Non-GAAP
Measures" for additional information.
“Our Life and Health group delivered solid results in both the quarter
and full year, with stable trends in the investment portfolio and near
record highs in the number of filled agency territories. Results on the
Property and Casualty side were mixed, especially given the significant
weather-related losses across the industry throughout the year,”
commented Don Southwell, Kemper's Chairman, President and Chief
Executive Officer.
“Results in our Direct business did not meet our expectations, largely
driven by unfavorable loss trends in three of its largest states. The
business team is taking additional actions to improve performance,
including significant rate increases and reductions of risk exposures,”
added Southwell. “Preferred and Specialty businesses both delivered
higher earnings in the quarter, reflecting targeted rate actions, modest
favorable development and lower catastrophes.”
“On the capital front, we repurchased nearly a million shares during the
year, with plans to continue in 2012. Looking forward, although we
expect the investment and personal lines markets to remain challenging,
our strong capital and liquidity position us well to respond to these
challenges,” said Southwell.
Highlights
-
Following the extraordinary level of weather related losses for the
industry, Preferred accelerated its premium rate filing actions.
Overall, the business is targeting double digit annualized rate
increases in 19 states for homeowners insurance, based on specific
state risk exposure.
-
Earned premiums at Preferred increased for the third sequential
quarter. Average package policies in force increased 4.2 percent
year-over-year, which is anticipated to further improve policyholder
retention and loss trends on its auto and home lines.
-
Following a review of loss trends on liability coverages, Direct filed
for and received approval to non-renew the majority of its auto
programs in Michigan starting in early April.
-
Reserve National reported record full-year earned premiums of $135.4
million in 2011 and made substantial progress in its transition to
policies not subject to national health care reform.
- Fireside Bank requested and received approval to terminate its FDIC
insurance effective March 31, 2012, marking another important
milestone in its plan to relinquish its bank charter in the first half
of 2012.
-
Kemper repurchased approximately 940,000 shares in 2011 at an average
price of $29.08 per share.
-
Book value per share increased to $36.78, up 6 percent from year-end
2010.
Segment Results
Unless otherwise noted, (i) the segment results discussed below are
presented on an after-tax basis, (ii) prior-year reserve development
includes both catastrophe and non-catastrophe losses and (iii)
catastrophe losses exclude the impact of prior-year reserve development.
In the third quarter of 2011, Fireside Bank was reclassified into
discontinued operations for all periods presented.
|
| |
| |
| |
Three Months Ended
| |
Year Ended
|
| | Dec 31,
|
| Dec 31,
| | Dec 31,
|
| Dec 31,
|
|
(Dollars in Millions) (Unaudited)
| |
2011
| |
2010
| |
2011
| |
2010
|
|
Segment Net Operating Income (Loss):
| | | | | | | | |
|
Kemper Preferred
| |
$
|
13.1
| | |
$
|
9.0
| | |
$
|
(16.6
|
)
| |
$
|
50.6
| |
|
Unitrin Specialty
| |
3.9
| | |
2.2
| | |
18.3
| | |
20.2
| |
|
Unitrin Direct
| |
(17.0
|
)
| |
(1.9
|
)
| |
(27.1
|
)
| |
(1.1
|
)
|
| Life and Health Insurance | |
32.5
|
| |
34.6
|
| |
108.5
|
| |
94.9
|
|
|
Total Segment Net Operating Income
| |
32.5
| | |
43.9
| | |
83.1
| | |
164.6
| |
|
Unallocated Net Operating Loss
| |
(7.3
|
)
| |
(4.2
|
)
| |
(26.8
|
)
| |
(12.7
|
)
|
|
Consolidated Net Operating Income
| |
25.2
| | |
39.7
| | |
56.3
| | |
151.9
| |
|
Unallocated Net Income (Loss) From:
| | | | | | | | |
|
Net Realized Gains on Sales of Investments
| |
3.9
| | |
18.4
| | |
21.9
| | |
27.9
| |
|
Net Impairment Losses Recognized in Earnings
| |
(3.0
|
)
| |
(2.4
|
)
| |
(7.3
|
)
| |
(10.7
|
)
|
|
Income from Continuing Operations
| |
$
|
26.1
|
| |
$
|
55.7
|
| |
$
|
70.9
|
| |
$
|
169.1
|
|
| | | | | | | | | | | | | | | |
|
Unallocated net operating loss in the preceding table consists of
interest and other expenses, dividend income and equity in net loss of
investee.
Preferred reported net operating income of $13.1 million for the fourth
quarter of 2011, compared to $9.0 million in 2010. This increase was
driven by $8.7 million favorable catastrophe experience versus the prior
year, which was partially offset by $1.8 million lower net investment
income and a higher underlying loss and LAE ratio in auto liability
coverages.
Specialty reported net operating income of $3.9 million for the fourth
quarter of 2011, compared to $2.2 million in 2010. The improvement in
net operating income was primarily related to the net favorable impact
of $3.2 million reserve development, partially offset by $1.1 million
lower net investment income. Overall expenses for the quarter were flat,
and the underlying combined ratio increased 0.6 percentage points, to
102.3 percent, reflecting fourth quarter seasonality.
Direct reported a net operating loss of $17.0 million for the fourth
quarter of 2011, compared to $1.9 million in 2010. The results in the
current period included a $4.4 million net operating loss in Michigan,
mostly from direct auto liability coverages. Throughout 2011 Direct took
several initiatives to improve operating results in Michigan, but as a
result of ongoing unfavorable loss experience, Direct filed for and
received approval to non-renew all direct auto business in the state
starting in early April. Direct also initiated further actions to
improve results in other states, including the termination of
distribution relationships amounting to approximately 15 percent of its
New York book. These actions contributed to an $8.8 million intangible
asset impairment relating to the Direct Response acquisition.
Life and Health Insurance reported net operating income of $32.5 million
for the fourth quarter of 2011, compared to $34.6 million for the same
period in 2010. Underwriting results were relatively flat, with both
periods benefiting $2.5 million from reserve corrections on small blocks
of policies. Overall Life and Health reserves at the end of the quarter
were $3.1 billion. Additionally impacting the current period was a
decrease in net investment income of $1.5 million from lower investment
yield.
Corporate and other activities, reported as unallocated net operating
loss on the previous table, was $7.3 million for the fourth quarter of
2011, which included higher pension expense of $1.2 million and higher
interest expense of $0.7 million.
Total pre-tax revenues were $613.3 million for the fourth quarter of
2011, compared to $670.8 million in 2010. Earned premiums reported were
$536.5 million pre-tax for the fourth quarter 2011, compared to $561.6
million in 2010. This decline is largely related to Direct's specific
actions to improve its operating results. Net investment income
decreased $9.4 million pre-tax largely driven by fluctuations of equity
method funds' performance, including underlying investment valuations.
Net investment income from equity method investments was $2.4 million
pre-tax in the fourth quarter of 2011, compared to $15.5 million pre-tax
in 2010. Net investment income excluding equity method investments
increased $3.7 million pre-tax driven by higher levels of investments in
fixed maturities and dividend-paying common stocks.
Unaudited consolidated statements of income for the three months and
years ended December 31, 2011 and 2010 are presented below:
|
| |
| |
| |
Three Months Ended
| |
Year Ended
|
| | Dec 31,
|
| Dec 31,
| | Dec 31,
|
| Dec 31,
|
|
(Dollars in millions, except per share amounts)
| |
2011
| |
2010
| |
2011
| |
2010
|
| Revenues: | | | | | | | | |
|
Earned Premiums
| |
$
|
536.5
| | |
$
|
561.6
| | |
$
|
2,173.6
| | |
$
|
2,289.4
| |
|
Net Investment Income
| |
75.3
| | |
84.7
| | |
298.0
| | |
325.7
| |
|
Other Income
| |
0.2
| | |
0.3
| | |
1.0
| | |
1.3
| |
|
Net Realized Gains on Sales of Investments
| |
5.9
| | |
28.0
| | |
33.7
| | |
42.6
| |
|
Other-than-temporary Impairment Losses:
| | | | | | | | |
|
Total Other-than-temporary Impairment Losses
| |
(4.7
|
)
| |
(3.8
|
)
| |
(11.4
|
)
| |
(17.7
|
)
|
|
Portion of Losses Recognized in Other Comprehensive Income
| |
0.1
|
| |
—
|
| |
0.1
|
| |
1.2
|
|
|
Net Impairment Losses Recognized in Earnings
| |
(4.6
|
)
| |
(3.8
|
)
| |
(11.3
|
)
| |
(16.5
|
)
|
| Total Revenues | |
613.3
|
| |
670.8
|
| |
2,495.0
|
| |
2,642.5
|
|
| Expenses: | | | | | | | | |
|
Policyholders’ Benefits and Incurred Losses and Loss Adjustment
Expenses
| |
376.7
| | |
407.1
| | |
1,645.7
| | |
1,647.2
| |
|
Insurance Expenses
| |
168.5
| | |
168.7
| | |
669.3
| | |
675.5
| |
|
Write-off of Goodwill and Other Intangibles Acquired
| |
13.5
| | |
—
| | |
13.5
| | |
14.8
| |
|
Interest and Other Expenses
| |
21.9
|
| |
18.4
|
| |
83.9
|
| |
68.3
|
|
| Total Expenses | |
580.6
|
| |
594.2
|
| |
2,412.4
|
| |
2,405.8
|
|
|
Income from Continuing Operations before Income Taxes and Equity in
Net Loss of Investee
| |
32.7
| | |
76.6
| | |
82.6
| | |
236.7
| |
|
Income Tax Expense
| |
(6.6
|
)
| |
(20.9
|
)
| |
(11.7
|
)
| |
(67.5
|
)
|
|
Income from Continuing Operations before Equity in Net Loss of
Investee
| |
26.1
| | |
55.7
| | |
70.9
| | |
169.2
| |
|
Equity in Net Loss of Investee
| |
—
|
| |
—
|
| |
—
|
| |
(0.1
|
)
|
| Income from Continuing Operations | |
26.1
|
| |
55.7
|
| |
70.9
|
| |
169.1
|
|
|
Discontinued Operations:
| | | | | | | | |
|
Income from Discontinued Operations before Income Taxes
| |
0.2
| | |
12.1
| | |
19.5
| | |
25.8
| |
|
Income Tax Expense
| |
(0.9
|
)
| |
(4.9
|
)
| |
(6.7
|
)
| |
(10.3
|
)
|
|
Income (Loss) from Discontinued Operations
| |
(0.7
|
)
| |
7.2
|
| |
12.8
|
| |
15.5
|
|
| Net Income | |
$
|
25.4
|
| |
$
|
62.9
|
| |
$
|
83.7
|
| |
$
|
184.6
|
|
| | | | | | | |
|
| Income from Continuing Operations Per Unrestricted Share: | | | | | | | | |
|
Basic
| |
$
|
0.43
|
| |
$
|
0.91
|
| |
$
|
1.17
|
| |
$
|
2.73
|
|
|
Diluted
| |
$
|
0.43
|
| |
$
|
0.91
|
| |
$
|
1.17
|
| |
$
|
2.73
|
|
| | | | | | | |
|
| Net Income Per Unrestricted Share: | | | | | | | | |
|
Basic
| |
$
|
0.42
|
| |
$
|
1.03
|
| |
$
|
1.38
|
| |
$
|
2.98
|
|
|
Diluted
| |
$
|
0.42
|
| |
$
|
1.03
|
| |
$
|
1.38
|
| |
$
|
2.98
|
|
| | | | | | | |
|
| Dividends Paid to Shareholders Per Share | |
$
|
0.24
|
| |
$
|
0.22
|
| |
$
|
0.96
|
| |
$
|
0.88
|
|
| | | | | | | | | | | | | | | |
|
Unaudited business segment revenues for the three months and years ended
December 31, 2011 and 2010 are presented below:
|
| |
| |
| |
Three Months Ended
| |
Year Ended
|
| | Dec 31,
|
| Dec 31,
| | Dec 31,
|
| Dec 31,
|
|
(Dollars in Millions)
| |
2011
| |
2010
| |
2011
| |
2010
|
| REVENUES | | | | | | | | |
| Kemper Preferred: | | | | | | | | |
|
Earned Premiums
| |
$
|
217.0
| | |
$
|
220.9
| | |
$
|
859.8
| | |
$
|
888.0
| |
|
Net Investment Income
| |
11.5
| | |
14.2
| | |
49.6
| | |
52.8
| |
|
Other Income
| |
0.1
|
| |
0.1
|
| |
0.3
|
| |
0.4
|
|
|
Total Kemper Preferred
| |
228.6
|
| |
235.2
|
| |
909.7
|
| |
941.2
|
|
| Unitrin Specialty: | | | | | | | | |
|
Earned Premiums
| |
108.5
| | |
115.0
| | |
445.2
| | |
474.9
| |
|
Net Investment Income
| |
4.7
| | |
6.3
| | |
21.1
| | |
24.8
| |
|
Other Income
| |
0.1
|
| |
0.1
|
| |
0.5
|
| |
0.6
|
|
|
Total Unitrin Specialty
| |
113.3
|
| |
121.4
|
| |
466.8
|
| |
500.3
|
|
| Unitrin Direct: | | | | | | | | |
|
Earned Premiums
| |
50.9
| | |
64.8
| | |
222.7
| | |
282.4
| |
|
Net Investment Income
| |
4.0
| | |
5.4
| | |
17.9
| | |
21.4
| |
|
Other Income
| |
—
|
| |
—
|
| |
0.1
|
| |
0.1
|
|
|
Total Unitrin Direct
| |
54.9
|
| |
70.2
|
| |
240.7
|
| |
303.9
|
|
| Life and Health Insurance: | | | | | | | | |
|
Earned Premiums
| |
160.1
| | |
160.9
| | |
645.9
| | |
644.1
| |
|
Net Investment Income
| |
53.6
| | |
55.9
| | |
201.9
| | |
214.3
| |
|
Other Income
| |
—
|
| |
0.1
|
| |
0.1
|
| |
0.2
|
|
| Total Life and Health Insurance | |
213.7
|
| |
216.9
|
| |
847.9
|
| |
858.6
|
|
| Total Segment Revenues | |
610.5
| | |
643.7
| | |
2,465.1
| | |
2,604.0
| |
|
Net Realized Gains on the Sales of Investments
| |
5.9
| | |
28.0
| | |
33.7
| | |
42.6
| |
|
Net Impairment Losses Recognized in Earnings
| |
(4.6
|
)
| |
(3.8
|
)
| |
(11.3
|
)
| |
(16.5
|
)
|
|
Other
| |
1.5
|
| |
2.9
|
| |
7.5
|
| |
12.4
|
|
| Total Revenues | |
$
|
613.3
|
| |
$
|
670.8
|
| |
$
|
2,495.0
|
| |
$
|
2,642.5
|
|
|
|
| KEMPER CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| (Dollars in millions) |
|
| Dec 31,
|
|
Dec 31,
|
| |
2011
| |
2010
|
| |
(Unaudited)
| | |
| Assets: | | | | |
|
Investments:
| | | | |
|
Fixed Maturities at Fair Value
| |
$
|
4,773.4
| | |
$
|
4,475.3
|
| Equity Securities at Fair Value
| |
397.3
| | |
550.4
|
|
Equity Method Limited Liability Investments at Cost Plus Cumulative
Undistributed Earnings
| |
306.3
| | |
328.0
|
|
Short-term Investments at Cost which Approximates Fair Value
| |
247.4
| | |
402.9
|
|
Other Investments
| |
498.3
|
| |
494.2
|
|
Total Investments
| |
6,222.7
|
| |
6,250.8
|
|
Cash
| |
251.2
| | |
117.2
|
|
Receivables from Policyholders
| |
379.2
| | |
388.9
|
|
Other Receivables
| |
218.7
| | |
555.4
|
|
Deferred Policy Acquisition Costs
| |
448.5
| | |
426.4
|
|
Goodwill
| |
311.8
| | |
311.8
|
|
Current and Deferred Income Tax Assets
| |
3.1
| | |
39.6
|
|
Other Assets
| |
250.7
|
| |
268.4
|
|
Total Assets
| |
$
|
8,085.9
|
| |
$
|
8,358.5
|
| | | |
|
| Liabilities and Shareholders’ Equity: | | | | |
|
Insurance Reserves:
| | | | |
|
Life and Health
| |
$
|
3,102.7
| | |
$
|
3,063.7
|
|
Property and Casualty
| |
1,029.1
|
| |
1,118.7
|
|
Total Insurance Reserves
| |
4,131.8
|
| |
4,182.4
|
|
Certificates of Deposits at Cost
| |
—
| | |
321.4
|
|
Unearned Premiums
| |
666.2
| | |
678.6
|
|
Liabilities for Income Taxes
| |
57.9
| | |
15.1
|
|
Notes Payable at Amortized Cost
| |
610.6
| | |
609.8
|
|
Accrued Expenses and Other Liabilities
| |
403.3
|
| |
437.8
|
|
Total Liabilities
| |
5,869.8
|
| |
6,245.1
|
| Shareholders’ Equity: | | | | |
|
Common Stock
| |
6.0
| | |
6.1
|
| Paid-in Capital | |
743.9
| | |
751.1
|
|
Retained Earnings
| |
1,208.2
| | |
1,198.8
|
|
Accumulated Other Comprehensive Income
| |
258.0
|
| |
157.4
|
|
Total Shareholders’ Equity
| |
2,216.1
|
| |
2,113.4
|
|
Total Liabilities and Shareholders’ Equity
| |
$
|
8,085.9
|
| |
$
|
8,358.5
|
| | | | | | |
|
Unaudited selected financial information for the Kemper Preferred
segment follows:
|
| |
| |
| |
Three Months Ended
| |
Year Ended
|
| | Dec 31,
|
| Dec 31,
| | Dec 31,
|
| Dec 31,
|
|
(Dollars in Millions)
| |
2011
| |
2010
| |
2011
| |
2010
|
| | | | | | | |
|
Results of Operations |
| | | | | | | |
|
|
Net Premiums Written
| |
$
|
211.2
|
| |
$
|
208.4
|
| |
$
|
868.8
|
| |
$
|
872.2
|
|
|
Earned Premiums:
| | | | | | | | |
|
Automobile
| |
$
|
127.9
| | |
$
|
134.8
| | |
$
|
510.9
| | |
$
|
544.7
| |
|
Homeowners
| |
75.3
| | |
72.8
| | |
294.9
| | |
290.0
| |
|
Other Personal
| |
13.8
|
| |
13.3
|
| |
54.0
|
| |
53.3
|
|
|
Total Earned Premiums
| |
217.0
| | |
220.9
| | |
859.8
| | |
888.0
| |
|
Net Investment Income
| |
11.5
| | |
14.2
| | |
49.6
| | |
52.8
| |
|
Other Income
| |
0.1
|
| |
0.1
|
| |
0.3
|
| |
0.4
|
|
|
Total Revenues
| |
228.6
|
| |
235.2
|
| |
909.7
|
| |
941.2
|
|
|
Incurred Losses and LAE related to:
| | | | | | | | |
|
Current Year:
| | | | | | | | |
|
Non-catastrophe Losses and LAE
| |
148.8
| | |
149.0
| | |
584.6
| | |
587.3
| |
|
Catastrophe Losses and LAE
| |
6.4
| | |
19.8
| | |
144.2
| | |
70.1
| |
|
Prior Years:
| | | | | | | | |
|
Non-catastrophe Losses and LAE
| |
(2.0
|
)
| |
(4.0
|
)
| |
(13.6
|
)
| |
(18.9
|
)
|
|
Catastrophe Losses and LAE
| |
(1.7
|
)
| |
(0.6
|
)
| |
(5.5
|
)
| |
(4.9
|
)
|
|
Total Incurred Losses and LAE
| |
151.5
| | |
164.2
| | |
709.7
| | |
633.6
| |
|
Insurance Expenses
| |
60.8
|
| |
61.1
|
| |
239.4
|
| |
243.7
|
|
|
Operating Profit (Loss)
| |
16.3
| | |
9.9
| | |
(39.4
|
)
| |
63.9
| |
|
Income Tax Benefit (Expense)
| |
(3.2
|
)
| |
(0.9
|
)
| |
22.8
|
| |
(13.3
|
)
|
|
Segment Net Operating Income (Loss)
| |
$
|
13.1
|
| |
$
|
9.0
|
| |
$
|
(16.6
|
)
| |
$
|
50.6
|
|
| | | | | | | |
|
Ratios Based On Earned Premiums |
| | | | | | | |
|
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
68.6
|
%
| |
67.4
|
%
| |
67.9
|
%
| |
66.2
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
2.9
| | |
9.0
| | |
16.8
| | |
7.9
| |
|
Prior Years Non-catastrophe Losses and LAE Ratio
| |
(0.9
|
)
| |
(1.8
|
)
| |
(1.6
|
)
| |
(2.1
|
)
|
|
Prior Years Catastrophe Losses and LAE Ratio
| |
(0.8
|
)
| |
(0.3
|
)
| |
(0.6
|
)
| |
(0.6
|
)
|
|
Total Incurred Loss and LAE Ratio
| |
69.8
| | |
74.3
| | |
82.5
| | |
71.4
| |
|
Incurred Expense Ratio
| |
28.0
|
| |
27.7
|
| |
27.8
|
| |
27.4
|
|
|
Combined Ratio
| |
97.8
|
%
| |
102.0
|
%
| |
110.3
|
%
| |
98.8
|
%
|
| | | | | | | |
|
Underlying Combined Ratio |
| | | | | | | |
|
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
68.6
|
%
| |
67.4
|
%
| |
67.9
|
%
| |
66.2
|
%
|
|
Incurred Expense Ratio
| |
28.0
|
| |
27.7
|
| |
27.8
|
| |
27.4
|
|
|
Underlying Combined Ratio
| |
96.6
|
%
| |
95.1
|
%
| |
95.7
|
%
| |
93.6
|
%
|
| | | | | | | |
|
Non-GAAP Measure Reconciliation |
| | | | | | | |
|
|
Underlying Combined Ratio
| |
96.6
|
%
| |
95.1
|
%
| |
95.7
|
%
| |
93.6
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
2.9
| | |
9.0
| | |
16.8
| | |
7.9
| |
|
Prior Years Non-catastrophe Losses and LAE Ratio
| |
(0.9
|
)
| |
(1.8
|
)
| |
(1.6
|
)
| |
(2.1
|
)
|
|
Prior Years Catastrophe Losses and LAE Ratio
| |
(0.8
|
)
| |
(0.3
|
)
| |
(0.6
|
)
| |
(0.6
|
)
|
|
Combined Ratio as Reported
| |
97.8
|
%
| |
102.0
|
%
| |
110.3
|
%
| |
98.8
|
%
|
| | | | | | | | | | | |
|
Unaudited selected financial information for the Unitrin Specialty
segment follows:
|
| |
| |
| |
Three Months Ended
| |
Year Ended
|
| | Dec 31,
|
| Dec 31,
| | Dec 31,
|
| Dec 31,
|
|
(Dollars in Millions)
| |
2011
| |
2010
| |
2011
| |
2010
|
| | | | | | | |
|
Results of Operations |
| | | | | | | |
|
|
Net Premiums Written
| |
$
|
100.0
|
| |
$
|
106.1
|
| |
$
|
438.2
|
| |
$
|
457.2
|
|
|
Earned Premiums:
| | | | | | | | |
|
Personal Automobile
| |
$
|
98.3
| | |
$
|
104.7
| | |
$
|
405.2
| | |
$
|
431.3
| |
|
Commercial Automobile
| |
10.2
|
| |
10.3
|
| |
40.0
|
| |
43.6
|
|
|
Total Earned Premiums
| |
108.5
| | |
115.0
| | |
445.2
| | |
474.9
| |
|
Net Investment Income
| |
4.7
| | |
6.3
| | |
21.1
| | |
24.8
| |
|
Other Income
| |
0.1
|
| |
0.1
|
| |
0.5
|
| |
0.6
|
|
|
Total Revenues
| |
113.3
|
| |
121.4
|
| |
466.8
|
| |
500.3
|
|
|
Incurred Losses and LAE related to:
| | | | | | | | |
|
Current Year:
| | | | | | | | |
|
Non-catastrophe Losses and LAE
| |
87.5
| | |
93.7
| | |
358.4
| | |
376.0
| |
|
Catastrophe Losses and LAE
| |
0.1
| | |
0.2
| | |
3.8
| | |
2.9
| |
|
Prior Years:
| | | | | | | | |
|
Non-catastrophe Losses and LAE
| |
(2.5
|
)
| |
2.5
| | |
(9.5
|
)
| |
4.0
| |
|
Catastrophe Losses and LAE
| |
—
|
| |
—
|
| |
0.1
|
| |
0.1
|
|
|
Total Incurred Losses and LAE
| |
85.1
| | |
96.4
| | |
352.8
| | |
383.0
| |
|
Insurance Expenses
| |
23.5
|
| |
23.4
|
| |
91.5
|
| |
92.7
|
|
|
Operating Profit
| |
4.7
| | |
1.6
| | |
22.5
| | |
24.6
| |
|
Income Tax Benefit (Expense)
| |
(0.8
|
)
| |
0.6
|
| |
(4.2
|
)
| |
(4.4
|
)
|
|
Segment Net Operating Income
| |
$
|
3.9
|
| |
$
|
2.2
|
| |
$
|
18.3
|
| |
$
|
20.2
|
|
| | | | | | | |
|
Ratios Based On Earned Premiums |
| | | | | | | |
|
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
80.6
|
%
| |
81.4
|
%
| |
80.4
|
%
| |
79.2
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
0.1
| | |
0.2
| | |
0.9
| | |
0.6
| |
|
Prior Years Non-catastrophe Losses and LAE Ratio
| |
(2.3
|
)
| |
2.2
| | |
(2.1
|
)
| |
0.8
| |
|
Prior Years Catastrophe Losses and LAE Ratio
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Total Incurred Loss and LAE Ratio
| |
78.4
| | |
83.8
| | |
79.2
| | |
80.6
| |
|
Incurred Expense Ratio
| |
21.7
|
| |
20.3
|
| |
20.6
|
| |
19.5
|
|
|
Combined Ratio
| |
100.1
|
%
| |
104.1
|
%
| |
99.8
|
%
| |
100.1
|
%
|
| | | | | | | |
|
Underlying Combined Ratio |
| | | | | | | |
|
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
80.6
|
%
| |
81.4
|
%
| |
80.4
|
%
| |
79.2
|
%
|
|
Incurred Expense Ratio
| |
21.7
|
| |
20.3
|
| |
20.6
|
| |
19.5
|
|
|
Underlying Combined Ratio
| |
102.3
|
%
| |
101.7
|
%
| |
101.0
|
%
| |
98.7
|
%
|
| | | | | | | |
|
Non-GAAP Measure Reconciliation |
| | | | | | | |
|
|
Underlying Combined Ratio
| |
102.3
|
%
| |
101.7
|
%
| |
101.0
|
%
| |
98.7
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
0.1
| | |
0.2
| | |
0.9
| | |
0.6
| |
|
Prior Years Non-catastrophe Losses and LAE Ratio
| |
(2.3
|
)
| |
2.2
| | |
(2.1
|
)
| |
0.8
| |
|
Prior Years Catastrophe Losses and LAE Ratio
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Combined Ratio as Reported
| |
100.1
|
%
| |
104.1
|
%
| |
99.8
|
%
| |
100.1
|
%
|
| | | | | | | | | | | |
|
Unaudited selected financial information for the Unitrin Direct
segment follows:
|
| |
| |
| |
Three Months Ended
| |
Year Ended
|
| | Dec 31,
|
| Dec 31,
| | Dec 31,
|
| Dec 31,
|
|
(Dollars in Millions)
| |
2011
| |
2010
| |
2011
| |
2010
|
| | | | | | | |
|
Results of Operations |
| | | | | | | |
|
|
Net Premiums Written
| |
$
|
45.5
|
| |
$
|
61.4
|
| |
$
|
209.0
|
| |
$
|
269.3
|
|
|
Earned Premiums:
| | | | | | | | |
|
Automobile
| |
$
|
48.5
| | |
$
|
62.6
| | |
$
|
213.3
| | |
$
|
273.5
| |
|
Homeowners
| |
2.4
| | |
2.2
| | |
9.2
| | |
8.7
| |
|
Other Personal
| |
—
|
| |
—
|
| |
0.2
|
| |
0.2
|
|
|
Total Earned Premiums
| |
50.9
| | |
64.8
| | |
222.7
| | |
282.4
| |
|
Net Investment Income
| |
4.0
| | |
5.4
| | |
17.9
| | |
21.4
| |
|
Other Income
| |
—
|
| |
—
|
| |
0.1
|
| |
0.1
|
|
|
Total Revenues
| |
54.9
|
| |
70.2
|
| |
240.7
|
| |
303.9
|
|
|
Incurred Losses and LAE related to:
| | | | | | | | |
|
Current Year:
| | | | | | | | |
|
Non-catastrophe Losses and LAE
| |
49.1
| | |
54.3
| | |
194.8
| | |
228.9
| |
|
Catastrophe Losses and LAE
| |
0.5
| | |
0.6
| | |
6.7
| | |
1.8
| |
|
Prior Years:
| | | | | | | | |
|
Non-catastrophe Losses and LAE
| |
1.9
| | |
0.8
| | |
(4.4
|
)
| |
(7.0
|
)
|
|
Catastrophe Losses and LAE
| |
0.1
|
| |
—
|
| |
0.5
|
| |
0.2
|
|
|
Total Incurred Losses and LAE
| |
51.6
| | |
55.7
| | |
197.6
| | |
223.9
| |
|
Insurance Expenses
| |
17.2
| | |
19.9
| | |
76.3
| | |
87.1
| |
|
Write-off of Intangible Assets from Direct Response Acquisition
| |
13.5
|
| |
—
|
| |
13.5
|
| |
—
|
|
|
Operating Loss
| |
(27.4
|
)
| |
(5.4
|
)
| |
(46.7
|
)
| |
(7.1
|
)
|
|
Income Tax Benefit
| |
10.4
|
| |
3.5
|
| |
19.6
|
| |
6.0
|
|
|
Segment Net Operating Loss
| |
$
|
(17.0
|
)
| |
$
|
(1.9
|
)
| |
$
|
(27.1
|
)
| |
$
|
(1.1
|
)
|
| | | | | | | |
|
Ratios Based On Earned Premiums |
| | | | | | | |
|
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
96.5
|
%
| |
83.9
|
%
| |
87.5
|
%
| |
81.1
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
1.0
| | |
0.9
| | |
3.0
| | |
0.6
| |
|
Prior Years Non-catastrophe Losses and LAE Ratio
| |
3.7
| | |
1.2
| | |
(2.0
|
)
| |
(2.5
|
)
|
|
Prior Years Catastrophe Losses and LAE Ratio
| |
0.2
|
| |
—
|
| |
0.2
|
| |
0.1
|
|
|
Total Incurred Loss and LAE Ratio
| |
101.4
| | |
86.0
| | |
88.7
| | |
79.3
| |
|
Incurred Expense Ratio, Including Write-off of Intangible Assets
| |
60.3
|
| |
30.7
|
| |
40.3
|
| |
30.8
|
|
|
Combined Ratio
| |
161.7
|
%
| |
116.7
|
%
| |
129.0
|
%
| |
110.1
|
%
|
| | | | | | | |
|
Underlying Combined Ratio |
| | | | | | | |
|
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
96.5
|
%
| |
83.9
|
%
| |
87.5
|
%
| |
81.1
|
%
|
|
Incurred Expense Ratio, Including Write-off of Intangible Assets
| |
60.3
|
| |
30.7
|
| |
40.3
|
| |
30.8
|
|
|
Underlying Combined Ratio
| |
156.8
|
%
| |
114.6
|
%
| |
127.8
|
%
| |
111.9
|
%
|
| | | | | | | |
|
Non-GAAP Measure Reconciliation |
| | | | | | | |
|
|
Underlying Combined Ratio
| |
156.8
|
%
| |
114.6
|
%
| |
127.8
|
%
| |
111.9
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
1.0
| | |
0.9
| | |
3.0
| | |
0.6
| |
|
Prior Years Non-catastrophe Losses and LAE Ratio
| |
3.7
| | |
1.2
| | |
(2.0
|
)
| |
(2.5
|
)
|
|
Prior Years Catastrophe Losses and LAE Ratio
| |
0.2
|
| |
—
|
| |
0.2
|
| |
0.1
|
|
|
Combined Ratio as Reported
| |
161.7
|
%
| |
116.7
|
%
| |
129.0
|
%
| |
110.1
|
%
|
| | | | | | | | | | | |
|
Unaudited selected financial information for the Life and Health
Insurance segment follows:
|
| |
| |
| |
Three Months Ended
| |
Year Ended
|
| | Dec 31,
|
| Dec 31,
| | Dec 31,
|
| Dec 31,
|
|
(Dollars in Millions)
| |
2011
| |
2010
| |
2011
| |
2010
|
| | | | | | | |
|
Results of Operations |
| | | | | | | |
|
|
Earned Premiums:
| | | | | | | | |
|
Life
| |
$
|
98.0
| | |
$
|
98.4
| | |
$
|
395.1
| | |
$
|
396.7
| |
|
Accident and Health
| |
41.7
| | |
41.4
| | |
166.3
| | |
161.9
| |
|
Property
| |
20.4
|
| |
21.1
|
| |
84.5
|
| |
85.5
|
|
|
Total Earned Premiums
| |
160.1
| | |
160.9
| | |
645.9
| | |
644.1
| |
|
Net Investment Income
| |
53.6
| | |
55.9
| | |
201.9
| | |
214.3
| |
|
Other Income
| |
—
|
| |
0.1
|
| |
0.1
|
| |
0.2
|
|
|
Total Revenues
| |
213.7
|
| |
216.9
|
| |
847.9
|
| |
858.6
|
|
|
Policyholders’ Benefits and Incurred Losses and LAE
| |
88.5
| | |
91.0
| | |
385.6
| | |
406.8
| |
|
Insurance Expenses
| |
75.4
| | |
72.8
| | |
294.7
| | |
283.0
| |
|
Write-off of Goodwill
| |
—
|
| |
—
|
| |
—
|
| |
14.8
|
|
|
Operating Profit
| |
49.8
| | |
53.1
| | |
167.6
| | |
154.0
| |
|
Income Tax Expense
| |
(17.3
|
)
| |
(18.5
|
)
| |
(59.1
|
)
| |
(59.1
|
)
|
|
Segment Net Operating Income
| |
$
|
32.5
|
| |
$
|
34.6
|
| |
$
|
108.5
|
| |
$
|
94.9
|
|
| | | | | | | | | | | | | | | |
|
Use of Non-GAAP Measures
Consolidated Net Operating Income
Consolidated Net Operating Income (Loss) is an after-tax, non-GAAP
measure and is computed by excluding from income (loss) from continuing
operations the after-tax impact of 1) net realized gains (losses) on
sales of investments, 2) net impairment losses recognized in earnings
related to investments and 3) other 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
income from continuing operations.
The company believes that Consolidated Net Operating Income (Loss)
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. Net
realized gains (losses) on sales of investments and net impairment
losses recognized in earnings related to investments included in the
company'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
the company's investments, the timing of which is unrelated to the
insurance underwriting process. Significant non-recurring items are
excluded because, by their nature, they are not indicative of the
company's business or economic trends.
A reconciliation of Consolidated Net Operating Income to Income from
Continuing Operations for the three months and years ended
December 31, 2011 and 2010 is presented below:
|
| |
| |
| |
Three Months Ended
| |
Year Ended
|
| | Dec 31,
|
| Dec 31,
| | Dec 31,
|
| Dec 31,
|
|
(Dollars in Millions)
| |
2011
| |
2010
| |
2011
| |
2010
|
|
Consolidated Net Operating Income
| |
$
|
25.2
| | |
$
|
39.7
| | |
$
|
56.3
| | |
$
|
151.9
| |
|
Net Income (Loss) From:
| | | | | | | | |
|
Net Realized Gains on Sales of Investments
| |
3.9
| | |
18.4
| | |
21.9
| | |
27.9
| |
|
Net Impairment Losses Recognized in Earnings
| |
(3.0
|
)
| |
(2.4
|
)
| |
(7.3
|
)
| |
(10.7
|
)
|
|
Income from Continuing Operations
| |
$
|
26.1
|
| |
$
|
55.7
|
| |
$
|
70.9
|
| |
$
|
169.1
|
|
| | | | | | | | | | | | | | | |
|
Underlying Combined Ratio
Underlying combined ratio is a non-GAAP measure, which is computed by
adding the current year non-catastrophe losses and LAE ratio with the
incurred expense ratio. The most directly comparable GAAP financial
measure is the combined ratio, which uses total incurred losses and LAE,
including the impact of catastrophe losses, and loss and LAE reserve
development. The company believes the underlying combined ratio is
useful to investors and is used by management to reveal the trends in
the company's property and casualty insurance businesses that may be
obscured by catastrophe losses and prior-year reserve development. These
catastrophe losses may cause loss trends to vary significantly between
periods as a result of their incidence of occurrence and magnitude, and
can have a significant impact on incurred losses and LAE and the
Combined Ratio. Prior-year reserve development is caused by unexpected
loss development on historical reserves. Because reserve development
relates to the re-estimation of losses from earlier periods, it has no
bearing on the performance of the company's insurance products in the
current period. The company believes it is useful for investors to
evaluate these components separately and in the aggregate when reviewing
its underwriting performance. The underlying combined ratio should not
be considered a substitute for the combined ratio and does not reflect
the overall underwriting profitability of our business.
About Kemper
Kemper
is a diversified insurance holding company with subsidiaries that
principally provide life, health, auto, homeowners and other insurance
products to individuals and small businesses. Kemper serves its
customers through a network of independent agents, brokers and career
agents, as well as directly to consumers via direct mail, web,
employer-sponsored employee benefit programs and other affinity
relationships.
Additional information about Kemper,
including its Annual Report, filings on Forms 10-K, 10-Q and 8-K and its
investor supplement, is available by visiting 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
to differ materially from estimated results are those listed in periodic
reports filed by Kemper with the Securities and Exchange Commission (the
"SEC"). No assurances can be given that the results 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. The reader is
advised, however, to consult any further disclosures Kemper makes on
related subjects in its filings with the SEC.
Kemper Corporation
Investors:
Diana Hickert-Hill, 312.661.4930
investor.relations@kemper.com
Source: Kemper Corporation