- Increased earned premiums by $115 million in the quarter
- Improved quarter-to-date legacy Property & Casualty underlying loss
and LAE ratio 1.8 percentage points
- Investment portfolio generated a pre-tax equivalent annualized book
yield of 4.6 percent in the quarter
- Increased book value per share 3 percent from year end to $39.92
- Returned $16 million of capital to shareholders through share
repurchases and dividends
CHICAGO--(BUSINESS WIRE)--
Kemper Corporation (NYSE: KMPR)
reported today a net loss of $2.1 million, or $0.04 per diluted share,
for the first quarter of 2016, compared to net income of $13.5 million,
or $0.26 per share, for the first quarter of 2015. Consolidated net
operating loss1 was $0.6 million, or $0.01 per diluted share,
for the first quarter of 2016, compared to net operating income of $21.8
million, or $0.42 per share, for the first quarter of 2015. Net
operating income decreased primarily from higher catastrophe losses and
the performance of Alliance United, partially offset by the deferred
profit reserve adjustment on certain life insurance policies that
occurred in 2015.
|
|
Three Months Ended
|
|
(Dollars in Millions, Except Per Share Amounts) (Unaudited)
| | Mar 31,
2016
|
| Mar 31,
2015
|
|
Consolidated Net Operating Income (Loss) 1 | |
$
|
(0.6
|
)
| |
$
|
21.8
| |
|
Income (Loss) from Continuing Operations
| |
(2.2
|
)
| |
13.5
| |
|
Net Income (Loss)
| |
(2.1
|
)
| |
13.5
| |
| | | |
|
| Impact of Catastrophe Losses and Related Loss Adjustment Expense
(LAE) on Net Income | | $ | (25.4 | ) | | $ | (6.7 | ) |
| | | |
|
|
Diluted Net Income (Loss) Per Share From:
| | | | |
|
Consolidated Net Operating Income (Loss) 1 | |
$
|
(0.01
|
)
| |
$
|
0.42
| |
|
Continuing Operations
| |
(0.04
|
)
| |
0.26
| |
|
Net Income (Loss)
| |
(0.04
|
)
| |
0.26
| |
| | | |
|
| Impact of Catastrophe Losses and Related LAE on Net Income Per
Share | | $ | (0.49 | ) | | $ | (0.13 | ) |
| | | | | | | |
|
1 Consolidated net operating income (loss) is an after-tax,
non-GAAP financial measure. See “Use of Non-GAAP Financial Measures” for
additional information.
“We made progress on stabilizing the Property & Casualty top line and
improving underlying performance in our legacy lines, yet saw elevated
catastrophe losses and continued challenges at Alliance United,”
commented Joseph P. Lacher, Jr., Kemper’s President and Chief Executive
Officer. “At Alliance United, we slowed new business writings
significantly through disciplined pricing, underwriting and agency
management actions. The underlying Life & Health segment results
continued to be stable. Total investment returns were lower than
expectations and last year, with most of the variance related to our
alternative investment portfolio.
“While we are pleased with the progress in some areas, we still have
much work to do. We continue to implement actions to improve core
results while we define our refocused strategy, which we plan to share
in late summer,” concluded Lacher.
Capital
During the first quarter of 2016, Kemper repurchased 140,000 shares of
its common stock at a total cost of $3.8 million, or $27.13 per share,
and paid dividends of $12.2 million.
Kemper ended the quarter with a book value per share of $39.92, up 3
percent from $38.82 at the end of 2015, largely from the impact of lower
yields on the fixed maturities portfolio, partially offset by dividends
paid. Book value per share excluding net unrealized gains on fixed
maturities was $34.97, compared to $35.13 at the end of 2015.
Revenues
Total revenues for the first quarter of 2016 increased $112.1 million,
or 22 percent, to $611.3 million, driven by $108.6 million higher earned
premiums from the Property & Casualty Insurance segment. Earned premiums
in the Property & Casualty Insurance segment increased $120.4 million
from the Alliance United acquisition. Excluding the Alliance United
acquisition, earned premiums in the Property & Casualty segment
decreased $11.8 million, primarily from a lower volume of insurance.
Net investment income was $67.0 million in the first quarter of 2016,
compared to $70.6 million in 2015. The change was driven by performance
in the alternative investments portfolio, which primarily consists of
limited partnerships, limited liability companies (both equity method
investments and other equity interests) and hedge funds, which are
accounted for using the fair value option. Net investment income from
the alternative investment portfolio was $0.4 million in the first
quarter of 2016, compared to $4.5 million in 2015. Alternative net
investment income increased $2.6 million for the Life and Health
segment, but decreased $2.7 million for the Property & Casualty segment
and $4.0 million for the Corporate and Other segment.
The investment portfolio in total generated a pre-tax equivalent
annualized book yield of 4.6 percent for the first quarter of 2016,
compared to 5.0 percent in 2015.
Segment Results
Kemper completed its acquisition of Alliance United on April 30, 2015.
The results of Alliance United’s operations since the acquisition date
are included in the Property & Casualty Insurance segment.
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)
underlying loss ratio includes loss and LAE, and (v) all comparisons are
made to the prior year quarter.
|
|
Three Months Ended
|
|
(Dollars in Millions) (Unaudited)
| | Mar 31,
2016
|
| Mar 31,
2015
|
|
Segment Net Operating Income (Loss):
| | | | |
| Property & Casualty Insurance | |
$
|
(13.1
|
)
| |
$
|
13.4
| |
| Life & Health Insurance | |
20.3
|
| |
16.1
|
|
|
Total Segment Net Operating Income
| |
7.2
| | |
29.5
| |
|
Corporate and Other Net Operating Loss
| |
(7.8
|
)
| |
(7.7
|
)
|
|
Consolidated Net Operating Income (Loss)
| |
(0.6
|
)
| |
21.8
| |
|
Net Income (Loss) From:
| | | | |
|
Net Realized Gains on Sales of Investments
| |
4.4
| | |
2.2
| |
|
Net Impairment Losses Recognized in Earnings
| |
(6.0
|
)
| |
(4.6
|
)
|
|
Loss from Early Extinguishment of Debt
| |
—
|
| |
(5.9
|
)
|
|
Income (Loss) from Continuing Operations
| |
$
|
(2.2
|
)
| |
$
|
13.5
|
|
| | | | | | | |
|
The Property & Casualty Insurance segment reported a net operating loss
of $13.1 million in the first quarter of 2016, compared to net operating
income of $13.4 million in 2015, driven by $17.7 million higher
catastrophe losses and Alliance United’s results, which include $4.2
million adverse development. Results also include a 1.8 percentage point
improvement on the legacy lines’ underlying loss and LAE ratio, offset
by lower levels of favorable development on the legacy book and lower
net investment income.
In 2015, Alliance United experienced significantly higher frequency and
severity trends on losses, and as a result, their premium rates became
inadequate. In the first quarter of 2016, Alliance United received
approval for rate increases on one of its two products, representing
approximately 50 percent of the book. The new rates were placed into
production on new and renewal business starting April 1, 2016. Alliance
United is seeking rate increases on the second product covering the
remaining portion of the book of business and is expecting to implement
the rate changes in the second half of 2016.
Excluding Alliance United, the first quarter underlying loss and LAE
ratio improved 1.8 percentage points, to 67.2 percent. Both preferred
auto and homeowners improved primarily from lower frequency, partially
offset by higher severity. Other personal insurance improved from lower
severity, and legacy nonstandard auto experienced modest improvement as
higher average earned premiums offset an increase in frequency.
The Life & Health Insurance segment reported net operating income of
$20.3 million for the first quarter of 2016, compared to $16.1 million
in 2015. Results increased primarily from the $7.6 million pre-tax
adjustment to deferred premium reserves in the first quarter of 2015.
Excluding the adjustment, results were fairly flat as higher
policyholder benefits and incurred losses were offset by higher net
investment income.
Corporate and Other net operating loss was essentially flat compared to
the first quarter of 2015, as lower net investment income offset lower
employee retirement benefits.
Unaudited condensed consolidated statements of operations for the
three months ended March 31, 2016 and 2015 are presented below.
|
|
Three Months Ended
|
|
(Dollars in Millions, Except Per Share Amounts)
| | Mar 31,
2016
|
| Mar 31,
2015
|
| Revenues: | | | | |
|
Earned Premiums
| |
$
|
546.0
| | |
$
|
431.3
| |
|
Net Investment Income
| |
67.0
| | |
70.6
| |
|
Other Income
| |
0.8
| | |
0.9
| |
|
Net Realized Gains on Sales of Investments
| |
6.8
| | |
3.4
| |
|
Other-than-temporary Impairment Losses:
| | | | |
Total Other-than-temporary Impairment Losses
| |
(9.6
|
)
| |
(7.0
|
)
|
|
Portion of Losses Recognized in Other Comprehensive Income
| |
0.3
|
| |
—
|
|
|
Net Impairment Losses Recognized in Earnings
| |
(9.3
|
)
| |
(7.0
|
)
|
| Total Revenues | |
611.3
|
| |
499.2
|
|
| Expenses: | | | | |
|
Policyholders’ Benefits and Incurred Losses and Loss Adjustment
Expenses
| |
436.2
| | |
297.7
| |
|
Insurance Expenses
| |
159.3
| | |
144.9
| |
|
Loss from Early Extinguishment of Debt
| |
—
| | |
9.1
| |
|
Interest and Other Expenses
| |
22.3
|
| |
29.7
|
|
| Total Expenses | |
617.8
|
| |
481.4
|
|
|
Income (Loss) from Continuing Operations before Income Taxes
| |
(6.5
|
)
| |
17.8
| |
|
Income Tax Benefit (Expense)
| |
4.3
|
| |
(4.3
|
)
|
| Income (Loss) from Continuing Operations | |
(2.2
|
)
| |
13.5
| |
|
Income from Discontinued Operations
| |
0.1
|
| |
—
|
|
| Net Income (Loss) | |
$
|
(2.1
|
)
| |
$
|
13.5
|
|
| | | |
|
| Income (Loss) from Continuing Operations Per Unrestricted Share: | | | | |
|
Basic
| |
$
|
(0.04
|
)
| |
$
|
0.26
|
|
|
Diluted
| |
$
|
(0.04
|
)
| |
$
|
0.26
|
|
| | | |
|
| Net Income (Loss) Per Unrestricted Share: | | | | |
|
Basic
| |
$
|
(0.04
|
)
| |
$
|
0.26
|
|
|
Diluted
| |
$
|
(0.04
|
)
| |
$
|
0.26
|
|
| | | |
|
| Weighted-average Outstanding (Shares in Thousands): | | | | |
|
Unrestricted Shares - Basic
| |
51,191.5
|
| |
51,872.8
|
|
|
Unrestricted Shares and Equivalent Shares - Diluted
| |
51,191.5
|
| |
51,969.3
|
|
| | | |
|
| Dividends Paid to Shareholders Per Share | |
$
|
0.24
|
| |
$
|
0.24
|
|
| | | | | | | |
|
Unaudited business segment revenues for the three months ended
March 31, 2016 and 2015 are presented below.
|
|
Three Months Ended
|
|
(Dollars in Millions)
| | Mar 31,
2016
|
| Mar 31,
2015
|
| REVENUES: | | | | |
| Property & Casualty Insurance: | | | | |
|
Earned Premiums:
| | | | |
|
Personal Automobile
| |
$
|
303.3
| | |
$
|
189.8
| |
|
Homeowners
| |
68.1
| | |
72.6
| |
|
Other Personal
| |
11.3
|
| |
11.7
|
|
|
Total Personal
| |
382.7
| | |
274.1
| |
|
Commercial Automobile
| |
13.5
|
| |
13.5
|
|
|
Total Earned Premiums
| |
396.2
| | |
287.6
| |
|
Net Investment Income
| |
11.9
| | |
14.8
| |
|
Other Income
| |
0.2
|
| |
0.3
|
|
| Total Property & Casualty Insurance | |
408.3
|
| |
302.7
|
|
| Life & Health Insurance: | | | | |
|
Earned Premiums:
| | | | |
|
Life
| |
94.4
| | |
88.0
| |
|
Accident and Health
| |
36.9
| | |
36.8
| |
|
Property
| |
18.5
|
| |
18.9
|
|
|
Total Earned Premiums
| |
149.8
| | |
143.7
| |
|
Net Investment Income
| |
55.0
| | |
50.4
| |
|
Other Income
| |
0.6
|
| |
0.8
|
|
| Total Life & Health Insurance | |
205.4
|
| |
194.9
|
|
| Total Segment Revenues | |
613.7
| | |
497.6
| |
|
Net Realized Gains on Sales of Investments
| |
6.8
| | |
3.4
| |
|
Net Impairment Losses Recognized in Earnings
| |
(9.3
|
)
| |
(7.0
|
)
|
|
Other
| |
0.1
|
| |
5.2
|
|
| Total Revenues | |
$
|
611.3
|
| |
$
|
499.2
|
|
| | | | | | | |
|
| KEMPER CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Millions) |
|
| Mar 31,
2016
|
| Dec 31,
2015
|
| Assets: | |
(Unaudited)
| | |
|
Investments:
| | | | |
|
Fixed Maturities at Fair Value
| |
$
|
4,917.4
| | |
$
|
4,852.3
|
| Equity Securities at Fair Value
| |
501.3
| | |
523.2
|
|
Equity Method Limited Liability Investments at Cost Plus Cumulative
Undistributed Earnings
| |
190.5
| | |
190.6
|
|
Fair Value Option Investments
| |
161.9
| | |
164.5
|
|
Short-term Investments at Cost which Approximates Fair Value
| |
367.4
| | |
255.7
|
|
Other Investments
| |
443.8
|
| |
443.2
|
|
Total Investments
| |
6,582.3
|
| |
6,429.5
|
|
Cash
| |
160.4
| | |
161.7
|
|
Receivables from Policyholders
| |
341.1
| | |
332.4
|
|
Other Receivables
| |
193.9
| | |
193.2
|
|
Deferred Policy Acquisition Costs
| |
319.3
| | |
316.4
|
| Goodwill | |
323.0
| | |
323.0
|
|
Current and Deferred Income Tax Assets
| |
15.5
| | |
41.4
|
|
Other Assets
| |
234.2
|
| |
238.5
|
|
Total Assets
| |
$
|
8,169.7
|
| |
$
|
8,036.1
|
| Liabilities and Shareholders’ Equity: | | | | |
|
Insurance Reserves:
| | | | |
|
Life and Health
| |
$
|
3,358.4
| | |
$
|
3,341.0
|
|
Property and Casualty
| |
900.4
|
| |
862.8
|
|
Total Insurance Reserves
| |
4,258.8
|
| |
4,203.8
|
|
Unearned Premiums
| |
621.6
| | |
613.1
|
|
Liabilities for Income Taxes
| |
10.2
| | |
3.8
|
|
Debt at Amortized Cost
| |
750.9
| | |
750.6
|
|
Accrued Expenses and Other Liabilities
| |
487.1
|
| |
472.4
|
|
Total Liabilities
| |
6,128.6
|
| |
6,043.7
|
| Shareholders’ Equity: | | | | |
|
Common Stock
| |
5.1
| | |
5.1
|
| Paid-in Capital | |
652.6
| | |
654.0
|
|
Retained Earnings
| |
1,192.7
| | |
1,209.0
|
|
Accumulated Other Comprehensive Income
| |
190.7
|
| |
124.3
|
|
Total Shareholders’ Equity
| |
2,041.1
|
| |
1,992.4
|
|
Total Liabilities and Shareholders’ Equity
| |
$
|
8,169.7
|
| |
$
|
8,036.1
|
| | | | | | |
|
Unaudited selected financial information for the Property & Casualty
Insurance segment follows.
|
|
Three Months Ended
|
|
(Dollars in Millions)
| | Mar 31,
2016
|
| Mar 31,
2015
|
| | | |
|
Results of Operations |
|
Net Premiums Written
| |
$
|
403.4
|
| |
$
|
279.7
|
|
| | | |
|
|
Earned Premiums
| |
$
|
396.2
| | |
$
|
287.6
| |
|
Net Investment Income
| |
11.9
| | |
14.8
| |
|
Other Income
| |
0.2
|
| |
0.3
|
|
|
Total Revenues
| |
408.3
|
| |
302.7
|
|
|
Incurred Losses and LAE related to:
| | | | |
|
Current Year:
| | | | |
|
Non-catastrophe Losses and LAE
| |
297.4
| | |
198.5
| |
|
Catastrophe Losses and LAE
| |
37.5
| | |
10.3
| |
| Prior Years:
| | | | |
|
Non-catastrophe Losses and LAE
| |
4.7
| | |
(5.0
|
)
|
|
Catastrophe Losses and LAE
| |
(2.7
|
)
| |
(2.2
|
)
|
|
Total Incurred Losses and LAE
| |
336.9
| | |
201.6
| |
|
Insurance Expenses
| |
94.2
|
| |
83.1
|
|
|
Operating Profit (Loss)
| |
(22.8
|
)
| |
18.0
| |
|
Income Tax Benefit (Expense)
| |
9.7
|
| |
(4.6
|
)
|
|
Segment Net Operating Income (Loss)
| |
$
|
(13.1
|
)
| |
$
|
13.4
|
|
| | | |
|
Ratios Based On Earned Premiums |
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
75.0
|
%
| |
69.0
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
9.5
| | |
3.6
| |
| Prior Years Non-catastrophe Losses and LAE Ratio
| |
1.2
| | |
(1.7
|
)
|
|
Prior Years Catastrophe Losses and LAE Ratio
| |
(0.7
|
)
| |
(0.8
|
)
|
|
Total Incurred Loss and LAE Ratio
| |
85.0
| | |
70.1
| |
|
Insurance Expense Ratio
| |
23.8
|
| |
28.9
|
|
|
Combined Ratio
| |
108.8
|
%
| |
99.0
|
%
|
| | | |
|
Underlying Combined Ratio |
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
75.0
|
%
| |
69.0
|
%
|
|
Insurance Expense Ratio
| |
23.8
|
| |
28.9
|
|
|
Underlying Combined Ratio
| |
98.8
|
%
| |
97.9
|
%
|
| | | |
|
Non-GAAP Measure Reconciliation |
|
Underlying Combined Ratio
| |
98.8
|
%
| |
97.9
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
9.5
| | |
3.6
| |
| Prior Years Non-catastrophe Losses and LAE Ratio
| |
1.2
| | |
(1.7
|
)
|
|
Prior Years Catastrophe Losses and LAE Ratio
| |
(0.7
|
)
| |
(0.8
|
)
|
|
Combined Ratio as Reported
| |
108.8
|
%
| |
99.0
|
%
|
| | | | | |
|
Unaudited selected financial information for the Life & Health
Insurance segment follows.
|
|
Three Months Ended
|
|
(Dollars in Millions)
| | Mar 31,
2016
|
| Mar 31,
2015
|
| | | |
|
Results of Operations |
| | | |
|
|
Earned Premiums:
| | | | |
|
Life
| |
$
|
94.4
| | |
$
|
88.0
| |
|
Accident and Health
| |
36.9
| | |
36.8
| |
|
Property
| |
18.5
|
| |
18.9
|
|
|
Total Earned Premiums
| |
149.8
| | |
143.7
| |
|
Net Investment Income
| |
55.0
| | |
50.4
| |
|
Other Income
| |
0.6
|
| |
0.8
|
|
|
Total Revenues
| |
205.4
|
| |
194.9
|
|
|
Policyholders’ Benefits and Incurred Losses and LAE
| |
99.3
| | |
96.1
| |
|
Insurance Expenses
| |
75.1
|
| |
74.0
|
|
|
Operating Profit
| |
31.0
| | |
24.8
| |
|
Income Tax Expense
| |
(10.7
|
)
| |
(8.7
|
)
|
|
Segment Net Operating Income
| |
$
|
20.3
|
| |
$
|
16.1
|
|
Use of Non-GAAP Financial Measures
Consolidated Net Operating Income (Loss)
Consolidated Net Operating Income (Loss) is an after-tax, non-GAAP
financial measure computed by excluding from income (loss) from
continuing operations the after-tax impact of 1) net realized gains on
sales of investments, 2) net impairment losses recognized in earnings
related to investments, 3) loss from early extinguishment of debt and 4)
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 (loss) from continuing operations.
Kemper 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 on
sales of investments and net impairment losses recognized in earnings
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 the company’s investments, the
timing of which is unrelated to the insurance underwriting process. Loss
from Early Extinguishment of Debt is driven by the company’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. Significant
non-recurring items are excluded because, by their nature, they are not
indicative of Kemper’s business or economic trends.
A reconciliation of Consolidated Net Operating Income (Loss) to Income
(Loss) from Continuing Operations for the three months ended March 31,
2016 and 2015 is presented below.
|
|
Three Months Ended
|
|
(Dollars in Millions) (Unaudited)
| | Mar 31,
2016
|
| Mar 31,
2015
|
|
Consolidated Net Operating Income (Loss)
| |
$
|
(0.6
|
)
| |
$
|
21.8
| |
|
Net Income (Loss) From:
| | | | |
|
Net Realized Gains on Sales of Investments
| |
4.4
| | |
2.2
| |
|
Net Impairment Losses Recognized in Earnings
| |
(6.0
|
)
| |
(4.6
|
)
|
|
Loss from Early Extinguishment of Debt
| |
—
|
| |
(5.9
|
)
|
|
Income (Loss) from Continuing Operations
| |
$
|
(2.2
|
)
| |
$
|
13.5
|
|
| | | | | | | |
|
Diluted Consolidated Net Operating Income (Loss)Per Unrestricted Share
Diluted Consolidated Net Operating Income (Loss) Per Unrestricted Share
is a non-GAAP financial measure computed by dividing Consolidated Net
Operating Income (Loss) attributed to unrestricted shares by the
weighted-average unrestricted shares and equivalent shares outstanding.
The most directly comparable GAAP financial measure is Diluted Income
(Loss) from Continuing Operations Per Unrestricted Share.
A reconciliation of Diluted Consolidated Net Operating Income (Loss) Per
Unrestricted Share to Diluted Income (Loss) from Continuing Operations
Per Unrestricted Share for the three months ended March 31, 2016 and
2015 is presented below.
|
|
Three Months Ended
|
|
(Unaudited)
| | Mar 31,
2016
|
| Mar 31,
2015
|
|
Diluted Consolidated Net Operating Income (Loss) Per Unrestricted
Share
| |
$
|
(0.01
|
)
| |
$
|
0.42
| |
|
Net Income (Loss) Per Unrestricted Share From:
| | | | |
|
Net Realized Gains on Sales of Investments
| |
0.09
| | |
0.04
| |
|
Net Impairment Losses Recognized in Earnings
| |
(0.12
|
)
| |
(0.09
|
)
|
|
Loss from Early Extinguishment of Debt
| |
—
|
| |
(0.11
|
)
|
|
Diluted Income (Loss) from Continuing Operations Per Unrestricted
Share
| |
$
|
(0.04
|
)
| |
$
|
0.26
|
|
| | | | | | | |
|
Book Value Per Share Excluding Net Unrealized
Gains on Fixed Maturities
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities
is a ratio 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 trend 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 generally 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 Maturities and Book
Value Per Share at March 31, 2016 and December 31, 2015 is presented
below.
|
(Dollars in Millions) (Unaudited)
|
| Mar 31,
2016
|
| Dec 31,
2015
|
|
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed
Maturities
| |
$
|
1,788.1
| | |
$
|
1,803.2
|
|
Net Unrealized Gains on Fixed Maturities
| |
253.0
|
| |
189.2
|
|
Shareholders’ Equity
| |
$
|
2,041.1
|
| |
$
|
1,992.4
|
| | | | | | |
|
Underlying Combined Ratio
Underlying Combined Ratio is a non-GAAP financial measure, that 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, including the impact of catastrophe
losses and loss and LAE reserve development from prior years, with the
insurance expense ratio. Kemper believes the underlying combined ratio
is useful to investors and is used by management to reveal the trends in
Kemper’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. Kemper 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.
Conference Call
Kemper will discuss its first quarter 2016 results in a conference call
on Friday, May 6, at 11 a.m. Eastern Time. Kemper’s conference call will
be accessible via the internet and by telephone. The phone number for
Kemper’s conference call is 866.393.1565. To listen via webcast,
register online at the
investor section of kemper.com at least 15 minutes prior to the
webcast to download and install any necessary software.
A replay of the call will be available through May 20, 2016 at 855.859.2056
using conference ID number 20415872.
More detailed financial information can be found in Kemper’s Investor
Financial Supplement for the first quarter of 2016, which is available
at the investor
section of kemper.com.
About Kemper
The Kemper family of companies is
one of the nation’s leading insurers. With $8 billion in assets, Kemper
is improving the world of insurance by offering personalized solutions
for individuals, families and businesses. Kemper's businesses
collectively:
-
Offer insurance for home, auto, life, health and valuables
-
Service six million policies
-
Are represented by more than 30,000 independent agents and brokers
-
Employ 6,000 associates dedicated to providing exceptional service
-
Are licensed to sell insurance in 50 states and the District of
Columbia
Learn more about Kemper.
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 listed in periodic reports filed by Kemper
with the Securities and Exchange Commission (the “SEC”). 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. The reader
is advised, however, to consult any further disclosures Kemper makes on
related subjects in its filings with the SEC.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160505006403/en/
Kemper Corporation
Investors:
Diana Hickert-Hill
312.661.4930
or investors@kemper.com
Source: Kemper Corporation