- Increased earned premiums by $29 million in the quarter
- Improved Nonstandard personal automobile’s underlying combined
ratio 16.0 percentage points
- Generated investment portfolio pre-tax equivalent annualized book
yield of 5.2 percent in the quarter
CHICAGO--(BUSINESS WIRE)--
Kemper Corporation (NYSE: KMPR)
reported today net income of $36.6 million, or $0.71 per diluted share,
for the second quarter of 2017, compared to net income of $4.0 million,
or $0.08 per share, for the second quarter of 2016. Consolidated net
operating income1 was $21.0 million, or $0.41 per diluted
share, for the second quarter of 2017, compared to $4.6 million, or
$0.09 per share, for the second quarter of 2016. Net operating results
increased primarily from improved underlying performance in the Property
& Casualty division, and lower catastrophe losses, partially offset by
adverse prior year reserve development.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
(Dollars in Millions, Except Per Share Amounts) (Unaudited)
| | Jun 30,
2017
|
| Jun 30,
2016
| | Jun 30,
2017
|
| Jun 30,
2016
|
|
Consolidated Net Operating Income1 | |
$
|
21.0
| | |
$
|
4.6
| | |
$
|
17.1
| | |
$
|
4.0
| |
|
Income from Continuing Operations
| |
36.6
| | |
4.1
| | |
36.2
| | |
1.9
| |
|
Net Income
| |
36.6
| | |
4.0
| | |
36.3
| | |
1.9
| |
| | | | | | | |
|
| Impact of Catastrophe Losses and Related Loss Adjustment Expense
(LAE) on Net Income | | $ | (23.0 | ) | | $ | (33.0 | ) | | $ | (65.7 | ) | | $ | (58.4 | ) |
| | | | | | | |
|
|
Diluted Net Income (Loss) Per Share From:
| | | | | | | | |
|
Consolidated Net Operating Income1 | |
$
|
0.41
| | |
$
|
0.09
| | |
$
|
0.34
| | |
$
|
0.08
| |
|
Continuing Operations
| |
0.71
| | |
0.08
| | |
0.70
| | |
0.04
| |
|
Net Income
| |
0.71
| | |
0.08
| | |
0.70
| | |
0.04
| |
| | | | | | | |
|
| Impact of Catastrophe Losses and Related LAE on Net Income Per
Share | | $ | (0.44 | ) | | $ | (0.64 | ) | | $ | (1.27 | ) | | $ | (1.13 | ) |
| | | | | | | | | | | | | | | |
|
1 Consolidated net operating income is an after-tax,
non-GAAP financial measure. See “Use of Non-GAAP Financial
Measures” for additional information.
|
| | | | | | | | | | | | | | | |
|
“Overall, Kemper had a strong quarter driven by improved performance in
our nonstandard auto business and stable Life & Health division
results,” commented Joseph P. Lacher, Jr., Kemper’s President and Chief
Executive Officer. “It’s encouraging to see the financial results of the
actions we took last year to reposition the nonstandard auto business.
While there is still work to do, we feel good about the position of the
business and are looking to appropriately grow market share.
“Similar to the industry, tornado and hail catastrophe losses drove
results in our preferred lines business, particularly homeowners.
Despite experiencing elevated catastrophe losses in the first and second
quarters of 2016 and 2017, we remain comfortable with our long-term
pricing expectations. In preferred auto, results continued to be
pressured from higher loss cost trends, but we are starting to earn the
rate increases we implemented earlier.
“Once again, our Life & Health division performed well. Net income
increased, primarily from higher net investment income, and earned
premiums grew modestly,” concluded Lacher.
Capital
On May 15, 2017, Kemper’s $360 million 6.00 percent senior notes
matured. On June 12, 2017, Kemper issued an additional $200 million of
its 2025 Senior Notes. The net proceeds of the additional issuance were
$200.2 million, net of discount and transaction costs. In anticipation
of the debt maturity, and for risk management purposes, in the fourth
quarter of 2016, Kemper entered into a derivative transaction to hedge
the interest rate portion of the new issuance. Including the derivative
transaction, the effective yield of the additional issuance of notes is
4.42 percent.
During the second quarter of 2017, Kemper paid dividends of $12.4
million, bringing total dividends paid in the first half of the year to
$24.7 million.
Kemper ended the quarter with a book value per share of $39.64, up three
percent from $38.52 at the end of 2016, driven by the impact of lower
yields on our fixed maturity portfolio and net income. Book value per
share excluding net unrealized gains on fixed maturities was $35.13, up
slightly from $35.00 at the end of 2016.
Revenues
Total revenues for the second quarter of 2017 increased $57.2 million,
or nine percent, to $684.4 million, driven by $28.6 million higher
nonstandard personal auto earned premiums and net realized investment
gains. Net realized investment gains were $23.8 million in the second
quarter of 2017, compared to net realized investment losses of $0.8
million last year.
Net investment income increased $3.4 million to $77.1 million in the
second quarter of 2017, primarily from $2.3 million higher net
investment income on the alternative investments portfolio. Excluding
alternative investments, net investment income increased $1.1 million as
the higher investment base more than offset a slightly lower rate.
The investment portfolio in total generated a pre-tax equivalent
annualized book yield of 5.2 percent for the second quarter of 2017,
compared to 5.0 percent in 2016.
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)
underlying loss ratio includes loss and LAE, and (v) all comparisons are
made to the prior year quarter unless otherwise stated.
|
| |
| |
| |
Three Months Ended
| |
Six Months Ended
|
|
(Dollars in Millions) (Unaudited)
| | Jun 30,
2017
|
| Jun 30,
2016
| | Jun 30,
2017
|
| Jun 30,
2016
|
|
Segment Net Operating Income (Loss):
| | | | | | | | |
| Property & Casualty Insurance | |
$
|
4.9
| | |
$
|
(8.9
|
)
| |
$
|
(17.2
|
)
| |
$
|
(22.0
|
)
|
| Life & Health Insurance | |
20.5
|
| |
16.4
|
| |
42.0
|
| |
36.7
|
|
|
Total Segment Net Operating Income
| |
25.4
| | |
7.5
| | |
24.8
| | |
14.7
| |
|
Corporate and Other Net Operating Loss
| |
(4.4
|
)
| |
(2.9
|
)
| |
(7.7
|
)
| |
(10.7
|
)
|
|
Consolidated Net Operating Income
| |
21.0
| | |
4.6
| | |
17.1
| | |
4.0
| |
|
Net Income (Loss) From:
| | | | | | | | |
|
Net Realized Gains on Sales of Investments
| |
17.2
| | |
3.7
| | |
24.0
| | |
8.1
| |
|
Net Impairment Losses Recognized in Earnings
| |
(1.6
|
)
| |
(4.2
|
)
| |
(4.9
|
)
| |
(10.2
|
)
|
|
Income from Continuing Operations
| |
$
|
36.6
|
| |
$
|
4.1
|
| |
$
|
36.2
|
| |
$
|
1.9
|
|
| | | | | | | | | | | | | | | |
|
The Property & Casualty Insurance segment reported net operating income
of $4.9 million in the second quarter of 2017, compared to a loss of
$8.9 million in 2016. Results increased primarily from improved
underlying performance and lower catastrophe losses, partially offset by
the adverse impact of prior year reserve development. Catastrophe losses
were $22.4 million and adverse prior year development was $4.9 million
in the second quarter of 2017, compared to $31.9 million of catastrophe
losses and $12.2 million of favorable prior year development last year.
The Property & Casualty Insurance segment’s underlying combined ratio
improved 7.5 percentage points to 94.2 percent in the second quarter of
2017. The underlying loss ratio improved 4.8 percentage points,
primarily from improvement in the nonstandard personal auto line,
partially offset by higher underlying loss ratios in preferred lines.
The nonstandard personal auto underlying loss ratio improved 12.5
percentage points to 78.7 percent in the quarter, as average earned
premium outpaced loss cost trends. The underlying loss ratio for
homeowners increased 3.1 percentage points to 48.7 percent, primarily
related to non-catastrophe weather related losses. Preferred personal
auto’s underlying loss ratio increased 1.5 percentage points to 72.8
percent driven by higher severity on most coverages, partially offset by
lower frequency and higher average earned premium.
The Property & Casualty Insurance segment’s expense ratio improved 2.7
percentage points primarily from Alliance United’s lower expense ratio,
cost initiatives and a greater premium base.
The Life & Health Insurance segment reported net operating income of
$20.5 million for the second quarter of 2017, compared to $16.4 million
in 2016, primarily from higher net investment income.
Corporate and Other net operating loss increased $1.5 million, compared
to the second quarter of 2016, driven by lower net investment income.
Unaudited condensed consolidated statements of income for the three
and six months ended June 30, 2017 and 2016 are presented below.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
(Dollars in Millions, Except Per Share Amounts)
| | Jun 30,
2017
|
| Jun 30,
2016
| | Jun 30,
2017
|
| Jun 30,
2016
|
| Revenues: | | | | | | | | |
|
Earned Premiums
| |
$
|
582.5
| | |
$
|
553.7
| | |
$
|
1,145.9
| | |
$
|
1,099.7
| |
|
Net Investment Income
| |
77.1
| | |
73.7
| | |
158.7
| | |
140.7
| |
|
Other Income
| |
1.0
| | |
0.6
| | |
1.9
| | |
1.4
| |
|
Net Realized Gains on Sales of Investments
| |
26.4
| | |
5.6
| | |
36.9
| | |
12.4
| |
|
Other-than-temporary Impairment Losses:
| | | | | | | | |
|
Total Other-than-temporary Impairment Losses
| |
(2.6
|
)
| |
(6.4
|
)
| |
(7.8
|
)
| |
(16.0
|
)
|
|
Portion of Losses Recognized in Other Comprehensive Income
| |
—
|
| |
—
|
| |
0.2
|
| |
0.3
|
|
|
Net Impairment Losses Recognized in Earnings
| |
(2.6
|
)
| |
(6.4
|
)
| |
(7.6
|
)
| |
(15.7
|
)
|
| Total Revenues | |
684.4
|
| |
627.2
|
| |
1,335.8
|
| |
1,238.5
|
|
| Expenses: | | | | | | | | |
|
Policyholders’ Benefits and Incurred Losses and Loss Adjustment
Expenses
| |
447.4
| | |
436.1
| | |
924.8
| | |
872.3
| |
|
Insurance Expenses
| |
163.5
| | |
167.8
| | |
321.5
| | |
327.1
| |
|
Interest and Other Expenses
| |
21.4
|
| |
20.7
|
| |
40.9
|
| |
43.0
|
|
| Total Expenses | |
632.3
|
| |
624.6
|
| |
1,287.2
|
| |
1,242.4
|
|
|
Income (Loss) from Continuing Operations before Income Taxes
| |
52.1
| | |
2.6
| | |
48.6
| | |
(3.9
|
)
|
|
Income Tax Benefit (Expense)
| |
(15.5
|
)
| |
1.5
|
| |
(12.4
|
)
| |
5.8
|
|
| Income from Continuing Operations | |
36.6
| | |
4.1
| | |
36.2
| | |
1.9
| |
|
Income (Loss) from Discontinued Operations
| |
—
|
| |
(0.1
|
)
| |
0.1
|
| |
—
|
|
| Net Income | |
$
|
36.6
|
| |
$
|
4.0
|
| |
$
|
36.3
|
| |
$
|
1.9
|
|
| | | | | | | |
|
| Income from Continuing Operations Per Unrestricted Share: | | | | | | | | |
|
Basic
| |
$
|
0.71
|
| |
$
|
0.08
|
| |
$
|
0.70
|
| |
$
|
0.04
|
|
|
Diluted
| |
$
|
0.71
|
| |
$
|
0.08
|
| |
$
|
0.70
|
| |
$
|
0.04
|
|
| | | | | | | |
|
| Net Income Per Unrestricted Share: | | | | | | | | |
|
Basic
| |
$
|
0.71
|
| |
$
|
0.08
|
| |
$
|
0.71
|
| |
$
|
0.04
|
|
|
Diluted
| |
$
|
0.71
|
| |
$
|
0.08
|
| |
$
|
0.70
|
| |
$
|
0.04
|
|
| | | | | | | |
|
| Weighted-average Outstanding (Shares in Thousands): | | | | | | | | |
|
Unrestricted Shares - Basic
| |
51,286.2
|
| |
51,107.7
|
| |
51,279.6
|
| |
51,149.6
|
|
|
Unrestricted Shares and Equivalent Shares - Diluted
| |
51,411.1
|
| |
51,119.0
|
| |
51,437.2
|
| |
51,159.2
|
|
| | | | | | | |
|
| Dividends Paid to Shareholders Per Share | |
$
|
0.24
|
| |
$
|
0.24
|
| |
$
|
0.48
|
| |
$
|
0.48
|
|
| | | | | | | | | | | | | | | |
|
Unaudited business segment revenues for the three and six months
ended June 30, 2017 and 2016 are presented below.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
(Dollars in Millions)
| | Jun 30,
2017
|
| Jun 30,
2016
| | Jun 30,
2017
|
| Jun 30,
2016
|
| REVENUES: | | | | | | | | |
| Property & Casualty Insurance: | | | | | | | | |
|
Earned Premiums:
| | | | | | | | |
|
Personal Automobile
| |
$
|
339.1
| | |
$
|
310.3
| | |
$
|
659.8
| | |
$
|
613.6
| |
|
Homeowners
| |
66.6
| | |
67.6
| | |
132.9
| | |
135.7
| |
|
Other Personal
| |
10.8
|
| |
11.3
|
| |
21.5
|
| |
22.6
|
|
|
Total Personal
| |
416.5
| | |
389.2
| | |
814.2
| | |
771.9
| |
|
Commercial Automobile
| |
12.7
|
| |
13.4
|
| |
25.4
|
| |
26.9
|
|
|
Total Earned Premiums
| |
429.2
| | |
402.6
| | |
839.6
| | |
798.8
| |
|
Net Investment Income
| |
20.6
| | |
19.7
| | |
44.7
| | |
31.6
| |
|
Other Income
| |
0.3
|
| |
0.1
|
| |
0.5
|
| |
0.3
|
|
| Total Property & Casualty Insurance | |
450.1
|
| |
422.4
|
| |
884.8
|
| |
830.7
|
|
| Life & Health Insurance: | | | | | | | | |
|
Earned Premiums:
| | | | | | | | |
|
Life
| |
95.4
| | |
95.5
| | |
191.1
| | |
189.9
| |
|
Accident and Health
| |
39.5
| | |
36.7
| | |
78.6
| | |
73.6
| |
|
Property
| |
18.4
|
| |
18.9
|
| |
36.6
|
| |
37.4
|
|
|
Total Earned Premiums
| |
153.3
| | |
151.1
| | |
306.3
| | |
300.9
| |
|
Net Investment Income
| |
54.9
| | |
50.1
| | |
107.9
| | |
105.1
| |
|
Other Income
| |
0.6
|
| |
0.6
|
| |
1.2
|
| |
1.2
|
|
| Total Life & Health Insurance | |
208.8
|
| |
201.8
|
| |
415.4
|
| |
407.2
|
|
| Total Segment Revenues | |
658.9
| | |
624.2
| | |
1,300.2
| | |
1,237.9
| |
|
Net Realized Gains on Sales of Investments
| |
26.4
| | |
5.6
| | |
36.9
| | |
12.4
| |
|
Net Impairment Losses Recognized in Earnings
| |
(2.6
|
)
| |
(6.4
|
)
| |
(7.6
|
)
| |
(15.7
|
)
|
|
Other
| |
1.7
|
| |
3.8
|
| |
6.3
|
| |
3.9
|
|
| Total Revenues | |
$
|
684.4
|
| |
$
|
627.2
|
| |
$
|
1,335.8
|
| |
$
|
1,238.5
|
|
| | | | | | | | | | | | | | | |
|
| KEMPER CORPORATION AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (Dollars in Millions) |
|
| Jun 30,
2017
|
| Dec 31,
2016
|
| Assets: | |
(Unaudited)
| | |
|
Investments:
| | | | |
|
Fixed Maturities at Fair Value
| |
$
|
5,263.9
| | |
$
|
5,124.9
|
| Equity Securities at Fair Value
| |
500.0
| | |
481.7
|
|
Equity Method Limited Liability Investments at Cost Plus Cumulative
Undistributed Earnings
| |
152.8
| | |
175.9
|
|
Fair Value Option Investments
| |
77.0
| | |
111.4
|
|
Short-term Investments at Cost which Approximates Fair Value
| |
129.9
| | |
273.7
|
|
Other Investments
| |
430.0
|
| |
439.9
|
|
Total Investments
| |
6,553.6
|
| |
6,607.5
|
|
Cash
| |
160.9
| | |
115.7
|
|
Receivables from Policyholders
| |
353.7
| | |
336.5
|
|
Other Receivables
| |
190.1
| | |
198.6
|
|
Deferred Policy Acquisition Costs
| |
348.5
| | |
332.0
|
| Goodwill | |
323.0
| | |
323.0
|
|
Current Income Tax Assets
| |
7.4
| | |
15.5
|
|
Deferred Income Tax Assets
| |
5.4
| | |
25.8
|
|
Other Assets
| |
268.8
|
| |
255.9
|
|
Total Assets
| |
$
|
8,211.4
|
| |
$
|
8,210.5
|
| Liabilities and Shareholders’ Equity: | | | | |
|
Insurance Reserves:
| | | | |
|
Life and Health
| |
$
|
3,499.7
| | |
$
|
3,475.3
|
|
Property and Casualty
| |
967.0
|
| |
931.4
|
|
Total Insurance Reserves
| |
4,466.7
|
| |
4,406.7
|
|
Unearned Premiums
| |
650.5
| | |
618.7
|
|
Liabilities for Unrecognized Tax Benefits
| |
7.0
| | |
5.1
|
|
Long-term Debt, Current and Non-current, at Amortized Cost
| |
592.1
| | |
751.6
|
|
Accrued Expenses and Other Liabilities
| |
461.7
|
| |
453.2
|
|
Total Liabilities
| |
6,178.0
|
| |
6,235.3
|
| Shareholders’ Equity: | | | | |
|
Common Stock
| |
5.1
| | |
5.1
|
| Paid-in Capital | |
666.9
| | |
660.3
|
|
Retained Earnings
| |
1,184.8
| | |
1,172.8
|
|
Accumulated Other Comprehensive Income
| |
176.6
|
| |
137.0
|
|
Total Shareholders’ Equity
| |
2,033.4
|
| |
1,975.2
|
|
Total Liabilities and Shareholders’ Equity
| |
$
|
8,211.4
|
| |
$
|
8,210.5
|
| | | | | | |
|
Unaudited selected financial information for the Property & Casualty
Insurance segment follows.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
(Dollars in Millions)
| | Jun 30,
2017
|
| Jun 30,
2016
| | Jun 30,
2017
|
| Jun 30,
2016
|
Results of Operations |
|
Net Premiums Written
| |
$
|
440.7
|
| |
$
|
404.7
|
| |
$
|
869.6
|
| |
$
|
808.1
|
|
| | | | | | | |
|
|
Earned Premiums
| |
$
|
429.2
| | |
$
|
402.6
| | |
$
|
839.6
| | |
$
|
798.8
| |
|
Net Investment Income
| |
20.6
| | |
19.7
| | |
44.7
| | |
31.6
| |
|
Other Income
| |
0.3
|
| |
0.1
|
| |
0.5
|
| |
0.3
|
|
|
Total Revenues
| |
450.1
|
| |
422.4
|
| |
884.8
|
| |
830.7
|
|
|
Incurred Losses and LAE related to:
| | | | | | | | |
|
Current Year:
| | | | | | | | |
|
Non-catastrophe Losses and LAE
| |
308.8
| | |
309.2
| | |
611.4
| | |
606.6
| |
|
Catastrophe Losses and LAE
| |
34.5
| | |
49.1
| | |
98.4
| | |
86.6
| |
| Prior Years:
| | | | | | | | |
|
Non-catastrophe Losses and LAE
| |
9.6
| | |
(9.1
|
)
| |
21.4
| | |
(4.4
|
)
|
|
Catastrophe Losses and LAE
| |
(2.0
|
)
| |
(9.6
|
)
| |
(3.2
|
)
| |
(12.3
|
)
|
|
Total Incurred Losses and LAE
| |
350.9
| | |
339.6
| | |
728.0
| | |
676.5
| |
|
Insurance Expenses
| |
95.0
|
| |
100.0
|
| |
189.8
|
| |
194.2
|
|
|
Operating Income (Loss)
| |
4.2
| | |
(17.2
|
)
| |
(33.0
|
)
| |
(40.0
|
)
|
|
Income Tax Benefit
| |
0.7
|
| |
8.3
|
| |
15.8
|
| |
18.0
|
|
|
Segment Net Operating Income (Loss)
| |
$
|
4.9
|
| |
$
|
(8.9
|
)
| |
$
|
(17.2
|
)
| |
$
|
(22.0
|
)
|
| | | | | | | |
|
Ratios Based On Earned Premiums |
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
72.1
|
%
| |
76.9
|
%
| |
72.9
|
%
| |
76.0
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
8.0
| | |
12.2
| | |
11.7
| | |
10.8
| |
| Prior Years Non-catastrophe Losses and LAE Ratio
| |
2.2
| | |
(2.3
|
)
| |
2.5
| | |
(0.6
|
)
|
|
Prior Years Catastrophe Losses and LAE Ratio
| |
(0.5
|
)
| |
(2.4
|
)
| |
(0.4
|
)
| |
(1.5
|
)
|
|
Total Incurred Loss and LAE Ratio
| |
81.8
| | |
84.4
| | |
86.7
| | |
84.7
| |
|
Insurance Expense Ratio
| |
22.1
|
| |
24.8
|
| |
22.6
|
| |
24.3
|
|
|
Combined Ratio
| |
103.9
|
%
| |
109.2
|
%
| |
109.3
|
%
| |
109.0
|
%
|
| | | | | | | |
|
Underlying Combined Ratio |
|
Current Year Non-catastrophe Losses and LAE Ratio
| |
72.1
|
%
| |
76.9
|
%
| |
72.9
|
%
| |
76.0
|
%
|
|
Insurance Expense Ratio
| |
22.1
|
| |
24.8
|
| |
22.6
|
| |
24.3
|
|
|
Underlying Combined Ratio
| |
94.2
|
%
| |
101.7
|
%
| |
95.5
|
%
| |
100.3
|
%
|
| | | | | | | |
|
Non-GAAP Measure Reconciliation |
|
Underlying Combined Ratio
| |
94.2
|
%
| |
101.7
|
%
| |
95.5
|
%
| |
100.3
|
%
|
|
Current Year Catastrophe Losses and LAE Ratio
| |
8.0
| | |
12.2
| | |
11.7
| | |
10.8
| |
| Prior Years Non-catastrophe Losses and LAE Ratio
| |
2.2
| | |
(2.3
|
)
| |
2.5
| | |
(0.6
|
)
|
|
Prior Years Catastrophe Losses and LAE Ratio
| |
(0.5
|
)
| |
(2.4
|
)
| |
(0.4
|
)
| |
(1.5
|
)
|
|
Combined Ratio as Reported
| |
103.9
|
%
| |
109.2
|
%
| |
109.3
|
%
| |
109.0
|
%
|
| | | | | | | | | | | |
|
Unaudited selected financial information for the Life & Health
Insurance segment follows.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
(Dollars in Millions)
| | Jun 30,
2017
|
| Jun 30,
2016
| | Jun 30,
2017
|
| Jun 30,
2016
|
Results of Operations |
|
Earned Premiums
| |
$
|
153.3
| | |
$
|
151.1
| | |
$
|
306.3
| | |
$
|
300.9
| |
|
Net Investment Income
| |
54.9
| | |
50.1
| | |
107.9
| | |
105.1
| |
|
Other Income
| |
0.6
|
| |
0.6
|
| |
1.2
|
| |
1.2
|
|
|
Total Revenues
| |
208.8
|
| |
201.8
|
| |
415.4
|
| |
407.2
|
|
|
Policyholders’ Benefits and Incurred Losses and LAE
| |
96.5
| | |
96.5
| | |
196.8
| | |
195.8
| |
|
Insurance Expenses
| |
81.1
|
| |
80.0
|
| |
154.8
|
| |
155.1
|
|
|
Operating Profit
| |
31.2
| | |
25.3
| | |
63.8
| | |
56.3
| |
|
Income Tax Expense
| |
(10.7
|
)
| |
(8.9
|
)
| |
(21.8
|
)
| |
(19.6
|
)
|
|
Segment Net Operating Income
| |
$
|
20.5
|
| |
$
|
16.4
|
| |
$
|
42.0
|
| |
$
|
36.7
|
|
Use of Non-GAAP Financial Measures
Consolidated Net Operating Income
Consolidated Net Operating Income is an after-tax, non-GAAP financial
measure computed by excluding from Income 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 from Continuing Operations.
Kemper believes that 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. 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 to Income from
Continuing Operations for the three and six months ended June 30, 2017
and 2016 is presented below.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
(Dollars in Millions) (Unaudited)
| | Jun 30,
2017
|
| Jun 30,
2016
| | Jun 30,
2017
|
| Jun 30,
2016
|
|
Consolidated Net Operating Income
| |
$
|
21.0
| | |
$
|
4.6
| | |
$
|
17.1
| | |
$
|
4.0
| |
|
Net Income (Loss) From:
| | | | | | | | |
|
Net Realized Gains on Sales of Investments
| |
17.2
| | |
3.7
| | |
24.0
| | |
8.1
| |
|
Net Impairment Losses Recognized in Earnings
| |
(1.6
|
)
| |
(4.2
|
)
| |
(4.9
|
)
| |
(10.2
|
)
|
|
Income from Continuing Operations
| |
$
|
36.6
|
| |
$
|
4.1
|
| |
$
|
36.2
|
| |
$
|
1.9
|
|
| | | | | | | | | | | | | | | |
|
Diluted Consolidated Net Operating Income Per
Unrestricted Share
Diluted Consolidated Net Operating Income 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
from Continuing Operations Per Unrestricted Share.
A reconciliation of Diluted Consolidated Net Operating Income Per
Unrestricted Share to Diluted Income from Continuing Operations Per
Unrestricted Share for the three and six months ended June 30, 2017 and
2016 is presented below.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
(Unaudited)
| | Jun 30,
2017
|
| Jun 30,
2016
| | Jun 30,
2017
|
| Jun 30,
2016
|
|
Diluted Consolidated Net Operating Income Per Unrestricted Share
| |
$
|
0.41
| | |
$
|
0.09
| | |
$
|
0.34
| | |
$
|
0.08
| |
|
Net Income (Loss) Per Unrestricted Share From:
| | | | | | | | |
|
Net Realized Gains on Sales of Investments
| |
0.33
| | |
0.07
| | |
0.46
| | |
0.16
| |
|
Net Impairment Losses Recognized in Earnings
| |
(0.03
|
)
| |
(0.08
|
)
| |
(0.10
|
)
| |
(0.20
|
)
|
|
Diluted Income from Continuing Operations Per Unrestricted Share
| |
$
|
0.71
|
| |
$
|
0.08
|
| |
$
|
0.70
|
| |
$
|
0.04
|
|
| | | | | | | | | | | | | | | |
|
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 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 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 June 30, 2017 and December 31, 2016 is presented
below.
|
(Dollars in Millions) (Unaudited)
|
| Jun 30,
2017
|
| Dec 31,
2016
|
|
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed
Maturities
| |
$
|
1,802.0
| | |
$
|
1,794.6
|
|
Net Unrealized Gains on Fixed Maturities
| |
231.4
|
| |
180.6
|
|
Shareholders’ Equity
| |
$
|
2,033.4
|
| |
$
|
1,975.2
|
| | | | | | |
|
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 second quarter 2017 results in a conference call
on Wednesday, August 2, at 4 p.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 844.826.3041. 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 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 second
quarter of 2017, 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 20,000 independent agents and brokers
-
Employ 5,750 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/20170801006721/en/
Kemper Corporation
Investors:
Todd Barton
312.661.4930 or investors@kemper.com
Source: Kemper Corporation