Kemper(KMPR) - 2025 Q2 - Quarterly Results

Caution Regarding Forward-Looking Statements The Investor Supplement contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors - The Investor Supplement contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors, including changes in insurance claims, interest rates, supply chain disruptions, governmental actions, competition, litigation, investment risks, and cybersecurity risks[2][4] Non-GAAP Financial Measures (Introduction) This document utilizes non-GAAP financial measures for analyzing operating performance, with detailed disclosures and definitions provided on pages 29-32 - This document uses non-GAAP financial measures to analyze operating performance, which may differ from those used by other companies. Detailed disclosures and definitions are provided on pages 29-32[3] Consolidated Financial Highlights This section presents key financial performance indicators and balance sheet positions for Kemper Corporation Income Statement Highlights Kemper Corporation reported increased total revenues and net income attributable to Kemper Corporation for both the three and six months ended June 30, 2025, compared to the same periods in 2024. Adjusted Consolidated Net Operating Income also saw significant growth Consolidated Income Highlights (Dollars in Millions, Except Per Share Amounts) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Total Revenues | $1,225.6 | $1,193.0 | $1,129.9 | $2,418.6 | $2,272.9 | | Net Income attributable to Kemper Corp. | $72.6 | $99.7 | $75.4 | $172.3 | $146.7 | | Adjusted Consolidated Net Operating Income | $84.1 | $106.4 | $91.7 | $190.5 | $161.4 | | Basic EPS (Kemper Corp.) | $1.13 | $1.56 | $1.17 | $2.69 | $2.28 | | Adjusted Consolidated Net Operating Income Per Share | $1.31 | $1.67 | $1.43 | $2.98 | $2.51 | | Dividends Paid to Shareholders Per Share | $0.32 | $0.32 | $0.31 | $0.64 | $0.62 | | Return on Shareholders' Equity | 9.9% | 14.0% | 11.5% | 11.9% | 11.3% | | Return on Adjusted Shareholders' Equity | 14.9% | 21.0% | 17.6% | 17.9% | 17.4% | - Total Revenues for Q2 2025 increased by $95.7 million (8.5%) compared to Q2 2024. For the six months ended June 30, 2025, total revenues increased by $145.7 million (6.4%) year-over-year[7] - Net Income attributable to Kemper Corporation for Q2 2025 was $72.6 million, a slight decrease from $75.4 million in Q2 2024. However, for the six months ended June 30, 2025, it increased to $172.3 million from $146.7 million in the prior year period[7] Balance Sheet Highlights As of June 30, 2025, Kemper Corporation's total assets slightly decreased from December 31, 2024, but shareholders' equity and book value per share showed an increase compared to the prior year period Consolidated Balance Sheet Highlights (Dollars in Millions, Except Per Share Amounts) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Total Assets | $12,601.1 | $12,467.3 | $12,630.4 | $12,544.3 | | Insurance Reserves | $5,900.0 | $5,867.1 | $5,811.6 | $5,769.2 | | Debt | $942.6 | $942.1 | $1,391.6 | $1,390.4 | | Kemper Corporation Shareholders' Equity | $2,953.4 | $2,917.6 | $2,788.4 | $2,671.2 | | Book Value Per Share | $46.45 | $45.60 | $43.68 | $41.46 | | Adjusted Book Value Per Share | $31.01 | $30.31 | $29.04 | $27.14 | | Debt to Total Capitalization | 24.2% | 24.4% | 33.3% | 34.2% | - Total Assets as of June 30, 2025, were $12,601.1 million, a slight decrease from $12,630.4 million at December 31, 2024, but an increase from $12,544.3 million at June 30, 2024[11] - Kemper Corporation Shareholders' Equity increased to $2,953.4 million at June 30, 2025, from $2,671.2 million at June 30, 2024. Book Value Per Share also rose to $46.45 from $41.46 over the same period[11] Consolidated Statements of Income This section details the company's revenues and expenses, providing a comprehensive view of its financial performance Revenues Consolidated total revenues for Q2 2025 reached $1,225.6 million, driven by an increase in earned premiums. Net investment income remained stable, while net realized investment losses and impairment losses impacted overall revenue Consolidated Revenues (Dollars in Millions) | Revenue Type | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Earned Premiums | $1,130.8 | $1,087.9 | $1,033.7 | $2,218.7 | $2,065.6 | | Net Investment Income | 95.9 | 101.2 | 93.0 | 197.1 | 193.4 | | Other Income | 3.1 | 2.6 | 3.0 | 5.7 | 5.2 | | Change in Fair Value of Equity and Convertible Securities | (0.5) | 0.1 | (1.2) | (0.4) | 2.2 | | Net Realized Investment (Losses) Gains | (0.1) | 0.9 | 1.5 | 0.8 | 8.1 | | Impairment Losses | (3.6) | 0.3 | (0.1) | (3.3) | (1.6) | | Total Revenues | $1,225.6 | $1,193.0 | $1,129.9 | $2,418.6 | $2,272.9 | - Earned Premiums increased by $97.1 million (9.4%) in Q2 2025 compared to Q2 2024, and by $153.1 million (7.4%) for the six months ended June 30, 2025, year-over-year[13] Expenses Total expenses for Q2 2025 increased to $1,138.1 million, primarily due to higher policyholders' benefits and incurred losses and loss adjustment expenses Consolidated Expenses (Dollars in Millions) | Expense Type | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Policyholders' Benefits and Incurred Losses and LAE | $829.1 | $767.3 | $744.4 | $1,596.4 | $1,500.4 | | Insurance and Other Expenses | 300.0 | 294.5 | 279.7 | 594.5 | 566.1 | | Interest Expense | 9.0 | 11.4 | 13.9 | 20.4 | 27.9 | | Total Expenses | $1,138.1 | $1,073.2 | $1,038.0 | $2,211.3 | $2,094.4 | - Policyholders' Benefits and Incurred Losses and LAE increased by $84.7 million (11.4%) in Q2 2025 compared to Q2 2024, and by $96.0 million (6.4%) for the six months ended June 30, 2025, year-over-year[13] Consolidated Balance Sheets This section outlines the company's assets, liabilities, and shareholders' equity, reflecting its financial position at period-end Assets Total assets as of June 30, 2025, were $12,601.1 million, with fixed maturities and goodwill being the largest components. Short-term investments decreased significantly from December 2024 Consolidated Assets (Dollars in Millions) | Asset Type | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Fixed Maturities at Fair Value | $6,669.1 | $6,558.6 | $6,409.6 | $6,674.7 | | Equity Securities at Fair Value | 284.1 | 232.3 | 218.5 | 226.6 | | Short-term Investments at Cost | 407.6 | 545.3 | 1,037.1 | 539.1 | | Total Investments | 8,645.5 | 8,592.1 | 8,888.5 | 8,668.3 | | Cash | 175.5 | 115.4 | 64.4 | 107.4 | | Receivables from Policyholders | 1,038.7 | 1,052.7 | 977.9 | 988.0 | | Deferred Policy Acquisition Costs | 658.2 | 649.7 | 628.9 | 608.0 | | Goodwill | 1,250.7 | 1,250.7 | 1,250.7 | 1,250.7 | | Total Assets | $12,601.1 | $12,467.3 | $12,630.4 | $12,544.3 | - Short-term Investments decreased significantly from $1,037.1 million at December 31, 2024, to $407.6 million at June 30, 2025[15] Liabilities and Shareholders' Equity Total liabilities decreased slightly from December 31, 2024, primarily due to a reduction in long-term debt. Kemper Corporation Shareholders' Equity continued to grow, reaching $2,953.4 million as of June 30, 2025 Consolidated Liabilities and Shareholders' Equity (Dollars in Millions) | Liability/Equity Type | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Total Insurance Reserves | $5,900.0 | $5,867.1 | $5,811.6 | $5,769.2 | | Unearned Premiums | 1,345.0 | 1,361.6 | 1,264.1 | 1,301.5 | | Long-term Debt, Non-Current | 942.6 | 942.1 | 941.7 | 940.6 | | Long-term Debt, Current | — | — | 449.9 | 449.8 | | Total Liabilities | 9,655.6 | 9,555.8 | 9,846.1 | 9,875.0 | | Total Kemper Corporation Shareholders' Equity | $2,953.4 | $2,917.6 | $2,788.4 | $2,671.2 | | Total Shareholders' Equity | $2,945.5 | $2,911.5 | $2,784.3 | $2,770.4 | - Long-term Debt (current portion) was reduced from $449.9 million at December 31, 2024, to $0 at June 30, 2025, indicating a significant debt repayment[17] - Kemper Corporation Shareholders' Equity increased by $282.2 million (10.6%) from $2,671.2 million at June 30, 2024, to $2,953.4 million at June 30, 2025[17] Consolidated Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities, illustrating liquidity and capital management Cash Flows from Operating Activities Net cash provided by operating activities significantly increased to $269.6 million for the six months ended June 30, 2025, compared to $65.9 million in the prior year, driven by higher net income and favorable changes in insurance reserves and unearned premiums Cash Flows from Operating Activities (Six Months Ended June 30, Dollars in Millions) | Metric | 2025 | 2024 | | :--------------------------------------- | :----- | :----- | | Net Income | $166.8 | $144.6 | | Changes in: | | | | Receivables from Policyholders | (64.2) | (32.6) | | Insurance Reserves | 87.3 | (80.7) | | Unearned Premiums | 84.2 | 5.1 | | Net Cash Provided by Operating Activities | $269.6 | $65.9 | - A significant increase in net cash provided by operating activities was observed, rising from $65.9 million in 6M 2024 to $269.6 million in 6M 2025[19] Cash Flows from Investing Activities Net cash provided by investing activities increased substantially to $361.4 million for the six months ended June 30, 2025, primarily due to net sales of short-term investments, offsetting increased purchases of fixed maturities and equity securities Cash Flows from Investing Activities (Six Months Ended June 30, Dollars in Millions) | Metric | 2025 | 2024 | | :--------------------------------------- | :----- | :----- | | Proceeds from Sales/Maturities of Fixed Maturities | $525.4 | $629.2 | | Purchases of Fixed Maturities | (668.8) | (578.4) | | Net Sales (Purchases) of Short-term Investments | 650.6 | (12.6) | | Net Cash Provided by Investing Activities | $361.4 | $32.6 | - Net sales of short-term investments generated $650.6 million in 6M 2025, a significant reversal from net purchases of $12.6 million in 6M 2024[21] Cash Flows from Financing Activities Net cash used in financing activities increased significantly to $519.4 million for the six months ended June 30, 2025, primarily due to the repayment of long-term debt and common stock repurchases Cash Flows from Financing Activities (Six Months Ended June 30, Dollars in Millions) | Metric | 2025 | 2024 | | :--------------------------------------- | :----- | :----- | | Repayment of Long-term Debt | $(450.0) | $— | | Common Stock Repurchases | (32.5) | — | | Dividends Paid | (41.0) | (39.8) | | Net Cash Used in Financing Activities | $(519.4) | $(55.2) | - The company repaid $450.0 million in long-term debt and repurchased $32.5 million in common stock during the first six months of 2025[21] Capital Metrics This section analyzes key capital structure and liquidity indicators, including book value per share and debt ratios Book Value Per Share Both Book Value Per Share and Adjusted Book Value Per Share have shown consistent quarterly increases, reflecting growth in shareholders' equity Book Value Per Share Trends (Dollars in Millions) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Book Value Per Share | $46.45 | $45.60 | $43.68 | $43.30 | $41.46 | $40.24 | | Adjusted Book Value Per Share | $31.01 | $30.31 | $29.04 | $27.88 | $27.14 | $26.19 | Debt and Total Capitalization The company significantly reduced its debt, leading to improved debt-to-capitalization ratios. Total debt decreased from $1,391.6 million at Dec 31, 2024, to $942.6 million at Jun 30, 2025 Debt and Capitalization Ratios (Dollars in Millions) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Debt | $942.6 | $942.1 | $1,391.6 | $1,390.4 | | Kemper Corporation Shareholders' Equity | $2,953.4 | $2,917.6 | $2,788.4 | $2,671.2 | | Total Capitalization | $3,896.0 | $3,859.7 | $4,180.0 | $4,061.6 | | Ratio of Debt to Total Capitalization | 24.2% | 24.4% | 33.3% | 34.2% | | Ratio of Debt to Total Capitalization Excluding AOCI | 22.7% | 22.9% | 31.0% | 31.8% | - The ratio of Debt to Total Capitalization improved from 33.3% at December 31, 2024, to 24.2% at June 30, 2025, reflecting debt reduction[23] Parent Company Liquidity Parent company liquidity increased to $823.2 million at June 30, 2025, supported by available borrowings under the credit agreement Parent Company Liquidity (Dollars in Millions) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Kemper Holding Company Cash and Investments | $223.2 | $161.3 | $547.6 | $376.5 | | Borrowings Available Under Credit Agreement | 600.0 | 600.0 | 512.0 | 458.0 | | Parent Company Liquidity | $823.2 | $761.3 | $1,059.6 | $834.5 | Debt Outstanding, Federal Home Loan Bank Advances and Ratings This section provides an overview of the company's outstanding debt, FHLB advances, and credit ratings Debt Outstanding Kemper Corporation's total long-term debt outstanding decreased significantly to $942.6 million at June 30, 2025, primarily due to the repayment of the 4.350% Senior Notes due February 15, 2025 Long-term Debt Outstanding (Dollars in Millions) | Debt Type | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | 4.350% Senior Notes due Feb 15, 2025 (Current) | $— | $— | $449.9 | $449.8 | | 2.400% Senior Notes due Sep 30, 2030 | 397.7 | 397.6 | 397.5 | 397.3 | | 3.800% Senior Notes due 2032 | 396.7 | 396.6 | 396.5 | 396.2 | | 5.875% Fixed-Rate Reset Junior Subordinated Debentures Due 2062 | 148.2 | 147.9 | 147.7 | 147.1 | | Total Long-term Debt Outstanding | $942.6 | $942.1 | $1,391.6 | $1,390.4 | - The 4.350% Senior Notes due February 15, 2025, which amounted to $449.9 million at December 31, 2024, were fully repaid by June 30, 2025[25] Federal Home Loan Bank Advances Federal Home Loan Bank advances to insurance subsidiaries, reported as policyholder contract liabilities, remained relatively stable, with $546.2 million outstanding from the Federal Home Loan Bank of Chicago as of June 30, 2025 Federal Home Loan Bank Advances (Dollars in Millions) | Bank | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Federal Home Loan Bank of Chicago | $546.2 | $536.2 | $541.3 | $547.0 | Debt and Insurance Company Ratings Kemper's senior unsecured debt maintains ratings of bbb- (A.M. Best), Baa3 (Moody's), and BBB- (S&P), while its insurance subsidiaries hold A- (A.M. Best, S&P) and A3 (Moody's) financial strength ratings Kemper Debt Ratings | Rating Type | A.M. Best | Moody's | S&P | Fitch | | :--------------------------------------- | :-------- | :------ | :---- | :---- | | Senior Unsecured Debt | bbb- | Baa3 | BBB- | BBB | | Junior Unsecured Debt | bb | Ba1 | BB | BB | Insurance Company Financial Strength Ratings | Company | A.M. Best | Moody's | S&P | Fitch | | :--------------------------------------- | :-------- | :------ | :---- | :---- | | Trinity Universal Insurance Company | A- | A3 | A- | A | | United Insurance Company of America | A- | A3 | A- | A | Segment Revenues This section details revenue performance across the Specialty Property & Casualty and Life Insurance segments Specialty Property & Casualty Insurance Revenues The Specialty P&C segment reported total revenues of $1,063.1 million in Q2 2025, an increase from $910.8 million in Q2 2024, primarily driven by growth in both Personal and Commercial Automobile earned premiums Specialty P&C Segment Revenues (Dollars in Millions) | Revenue Type | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Personal Automobile Earned Premiums | $789.3 | $753.7 | $691.5 | $1,543.0 | $1,366.8 | | Commercial Automobile Earned Premiums | 221.5 | 208.5 | 171.1 | 430.0 | 335.8 | | Total Specialty P&C Earned Premiums | 1,010.8 | 962.2 | 862.6 | 1,973.0 | 1,702.6 | | Net Investment Income | 49.6 | 50.5 | 46.6 | 100.1 | 87.7 | | Total Specialty P&C Insurance Revenues | $1,063.1 | $1,014.0 | $910.8 | $2,077.1 | $1,793.3 | - Personal Automobile earned premiums increased by $97.8 million (14.1%) in Q2 2025 compared to Q2 2024. Commercial Automobile earned premiums increased by $50.4 million (29.5%) over the same period[27] Life Insurance Revenues The Life Insurance segment reported total revenues of $145.5 million in Q2 2025, an increase from $131.5 million in Q2 2024, primarily due to higher net investment income Life Insurance Segment Revenues (Dollars in Millions) | Revenue Type | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Earned Premium | $100.5 | $99.7 | $100.8 | $200.2 | $198.1 | | Net Investment Income | 44.7 | 48.4 | 30.5 | 93.1 | 74.8 | | Total Life Insurance Revenues | $145.5 | $148.8 | $131.5 | $294.3 | $273.4 | - Net Investment Income for the Life Insurance segment increased by $14.2 million (46.6%) in Q2 2025 compared to Q2 2024[27] Segment Adjusted Operating Results This section presents the adjusted operating income and net operating income for the Specialty Property & Casualty and Life Insurance segments Segment Adjusted Operating Income Total Segment Adjusted Operating Income for Q2 2025 was $113.2 million, a decrease from Q2 2024, primarily due to a decline in the Specialty P&C segment's operating income. However, the Life Insurance segment showed significant improvement Segment Adjusted Operating Income (Dollars in Millions) | Segment | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Specialty Property & Casualty Insurance | $98.9 | $122.1 | $127.9 | $221.0 | $214.4 | | Life Insurance | 14.3 | 20.2 | (1.4) | 34.5 | 12.6 | | Total Segment Adjusted Operating Income | $113.2 | $142.3 | $126.5 | $255.5 | $227.0 | - Specialty P&C Adjusted Operating Income decreased by $29.0 million (22.7%) in Q2 2025 compared to Q2 2024. Life Insurance Adjusted Operating Income significantly improved from a loss of $1.4 million in Q2 2024 to an income of $14.3 million in Q2 2025[29] Segment Adjusted Net Operating Income Adjusted Consolidated Net Operating Income for Q2 2025 was $84.1 million, a decrease from Q2 2024, but the six-month period showed a strong increase to $190.5 million from $161.4 million in the prior year Segment Adjusted Net Operating Income (Dollars in Millions) | Segment | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Specialty Property & Casualty Insurance | $79.0 | $97.9 | $102.3 | $176.9 | $171.5 | | Life Insurance | 12.6 | 17.2 | (0.2) | 29.8 | 11.7 | | Total Segment Adjusted Net Operating Income | $91.6 | $115.1 | $102.1 | $206.7 | $183.2 | | Adjusted Consolidated Net Operating Income | $84.1 | $106.4 | $91.7 | $190.5 | $161.4 | - Adjusted Consolidated Net Operating Income for the six months ended June 30, 2025, increased by $29.1 million (18.0%) compared to the same period in 2024[29] Catastrophe Frequency and Severity This section analyzes the impact of catastrophe losses and loss adjustment expenses on consolidated results Three Months Ended June 30, 2025 vs. 2024 Consolidated catastrophe losses and LAE significantly decreased in Q2 2025 to $7.7 million from $28.3 million in Q2 2024, with fewer events reported across all segments Catastrophe Losses and LAE (Three Months Ended June 30, Dollars in Millions) | Segment | Q2 2025 Events | Q2 2025 Losses & LAE | Q2 2024 Events | Q2 2024 Losses & LAE | | :--------------------------------------- | :------------- | :------------------- | :------------- | :------------------- | | Specialty Property & Casualty Insurance | 18 | $5.3 | 23 | $10.3 | | Life Insurance | 15 | $0.7 | 24 | $0.4 | | Non-Core Operations | 14 | $1.7 | 24 | $17.6 | | Consolidated | 19 | $7.7 | 27 | $28.3 | - Consolidated catastrophe losses and LAE decreased by $20.6 million (72.8%) in Q2 2025 compared to Q2 2024[31] Six Months Ended June 30, 2025 vs. 2024 For the six months ended June 30, 2025, consolidated catastrophe losses and LAE decreased to $14.8 million from $44.3 million in the prior year, indicating a favorable trend in catastrophe impact Catastrophe Losses and LAE (Six Months Ended June 30, Dollars in Millions) | Segment | 6M 2025 Events | 6M 2025 Losses & LAE | 6M 2024 Events | 6M 2024 Losses & LAE | | :--------------------------------------- | :------------- | :------------------- | :------------- | :------------------- | | Specialty Property & Casualty Insurance | 33 | $9.1 | 42 | $14.4 | | Life Insurance | 26 | $1.0 | 36 | $0.6 | | Non-Core Operations | 25 | $4.7 | 42 | $29.3 | | Consolidated | 34 | $14.8 | 46 | $44.3 | - Consolidated catastrophe losses and LAE for the first six months of 2025 decreased by $29.5 million (66.6%) compared to the same period in 2024[33] Specialty Property & Casualty Insurance Segment This section provides detailed operational and financial results for the Specialty Property & Casualty insurance business Results of Operations and Selected Financial Information The Specialty P&C segment reported strong growth in net premiums written and earned premiums for Q2 and 6M 2025. However, the combined ratio increased to 95.4% in Q2 2025 from 90.7% in Q2 2024, primarily due to higher current year non-catastrophe losses and LAE Specialty P&C Key Financials (Dollars in Millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net Premiums Written | $1,001.5 | $1,068.8 | $933.9 | $2,070.3 | $1,798.5 | | Earned Premiums | 1,010.8 | 962.2 | 862.6 | 1,973.0 | 1,702.6 | | Total Incurred Losses and LAE | 749.4 | 686.8 | 602.2 | 1,436.2 | 1,221.3 | | Segment Adjusted Operating Income | 98.9 | 122.1 | 127.9 | 221.0 | 214.4 | | Combined Ratio | 95.4% | 92.7% | 90.7% | 94.1% | 92.7% | | Underlying Combined Ratio | 93.6% | 92.2% | 89.6% | 92.9% | 91.6% | - Net Premiums Written increased by $67.6 million (7.2%) in Q2 2025 compared to Q2 2024, and by $271.8 million (15.1%) for the six months ended June 30, 2025, year-over-year[35] - The Combined Ratio for Specialty P&C increased from 90.7% in Q2 2024 to 95.4% in Q2 2025, primarily driven by an increase in the Current Year Non-catastrophe Losses and LAE Ratio from 68.7% to 72.3%[35] Personal Automobile Insurance Personal Automobile insurance saw increased earned premiums and total revenues in Q2 2025. However, the combined ratio rose to 94.4% from 90.8% in Q2 2024, mainly due to higher current year non-catastrophe losses Personal Automobile Insurance Key Financials (Dollars in Millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net Premiums Written | $767.0 | $823.9 | $739.5 | $1,590.9 | $1,412.0 | | Earned Premiums | $789.3 | $753.7 | $691.5 | $1,543.0 | $1,366.8 | | Adjusted Operating Income | 78.2 | 93.4 | 95.2 | 171.6 | 156.8 | | Combined Ratio | 94.4% | 92.0% | 90.8% | 93.2% | 92.9% | | Underlying Combined Ratio | 94.5% | 92.2% | 89.6% | 93.3% | 91.6% | - Earned Premiums for Personal Automobile increased by $97.8 million (14.1%) in Q2 2025 compared to Q2 2024[39] - The Current Year Non-catastrophe Losses and LAE Ratio for Personal Automobile increased from 68.2% in Q2 2024 to 72.5% in Q2 2025[39] Commercial Automobile Insurance Commercial Automobile insurance experienced significant growth in earned premiums and total revenues. However, the combined ratio increased to 99.0% in Q2 2025 from 90.5% in Q2 2024, largely due to a substantial increase in prior years' non-catastrophe losses and LAE ratio Commercial Automobile Insurance Key Financials (Dollars in Millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net Premiums Written | $234.5 | $244.9 | $194.4 | $479.4 | $386.5 | | Earned Premiums | $221.5 | $208.5 | $171.1 | $430.0 | $335.8 | | Adjusted Operating Income | 20.7 | 28.7 | 32.7 | 49.4 | 57.6 | | Combined Ratio | 99.0% | 95.3% | 90.5% | 97.2% | 92.0% | | Underlying Combined Ratio | 90.1% | 92.3% | 90.0% | 91.2% | 91.9% | - Earned Premiums for Commercial Automobile increased by $50.4 million (29.5%) in Q2 2025 compared to Q2 2024[41] - The Prior Years Non-catastrophe Losses and LAE Ratio for Commercial Automobile significantly increased from (0.8)% in Q2 2024 to 8.4% in Q2 2025[41] Life Insurance Segment This section presents the operational and financial performance of the Life Insurance business segment Results of Operations and Selected Financial Information The Life Insurance segment showed a strong turnaround, moving from an Adjusted Operating Loss of $1.4 million in Q2 2024 to an income of $14.3 million in Q2 2025. This improvement was largely driven by increased net investment income Life Insurance Segment Key Financials (Dollars in Millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Earned Premiums | $100.5 | $99.7 | $100.8 | $200.2 | $198.1 | | Net Investment Income | 44.7 | 48.4 | 30.5 | 93.1 | 74.8 | | Total Revenues | 145.5 | 148.8 | 131.5 | 294.3 | 273.4 | | Policyholders' Benefits and Incurred Losses and LAE | 63.5 | 62.2 | 63.9 | 125.7 | 126.9 | | Segment Adjusted Operating Income (Loss) | 14.3 | 20.2 | (1.4) | 34.5 | 12.6 | | Total Segment Adjusted Net Operating Income (Loss) | $12.6 | $17.2 | $(0.2) | $29.8 | $11.7 | - Net Investment Income for the Life Insurance segment increased by $14.2 million (46.6%) in Q2 2025 compared to Q2 2024[43] - Insurance Reserves for the Life Insurance segment were $3,237.4 million at June 30, 2025, slightly higher than $3,204.6 million at June 30, 2024[45] Expenses Total insurance, interest, and other expenses for Q2 2025 were $309.0 million, an increase from $293.6 million in Q2 2024, primarily driven by higher policy acquisition costs and business unit operating costs Consolidated Expenses (Dollars in Millions) | Expense Type | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Policy Acquisition Costs, Net of Amortization | $177.1 | $164.3 | $159.1 | $341.4 | $314.0 | | Business Unit Operating Costs | 71.4 | 75.1 | 64.0 | 146.5 | 128.3 | | Corporate Overhead Costs | 44.6 | 46.7 | 49.4 | 91.3 | 98.2 | | Insurance Expenses | 293.1 | 286.1 | 272.5 | 579.2 | 540.5 | | Other Expenses | 6.9 | 8.4 | 7.2 | 15.3 | 25.6 | | Interest Expense | 9.0 | 11.4 | 13.9 | 20.4 | 27.9 | | Total Insurance, Interest, and Other Expenses | $309.0 | $305.9 | $293.6 | $614.9 | $594.0 | - Policy Acquisition Costs, Net of Amortization, increased by $18.0 million (11.3%) in Q2 2025 compared to Q2 2024[47] - Corporate Overhead Costs decreased by $4.8 million (9.7%) in Q2 2025 compared to Q2 2024[47] Details of Investment Performance Total investment income for Q2 2025 was $102.6 million, with interest on fixed income securities being the largest component. Net realized investment losses and impairment losses were recorded in Q2 2025 Total Investment Income (Dollars in Millions) | Investment Income Type | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Interest on Fixed Income Securities | $76.9 | $76.4 | $80.2 | $153.3 | $160.0 | | Alternative Investments | (2.2) | 3.0 | (8.5) | 0.8 | (7.2) | | Short-term Investments | 6.0 | 8.6 | 7.3 | 14.6 | 14.6 | | Company-Owned Life Insurance | 10.5 | 10.2 | 8.9 | 20.7 | 16.0 | | Total Investment Income | $102.6 | $108.5 | $98.7 | $211.1 | $207.0 | Net Realized Investment Gains (Losses) and Impairment Losses (Dollars in Millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net Realized Investment (Losses) Gains | $(0.1) | $0.9 | $1.5 | $0.8 | $8.1 | | Net Impairment Losses Recognized in Earnings | $(3.6) | $0.3 | $(0.1) | $(3.3) | $(1.6) | - Interest on Fixed Income Securities decreased slightly from $80.2 million in Q2 2024 to $76.9 million in Q2 2025[49] Details of Invested Assets This section outlines the composition of the company's investment portfolio by asset type, rating, and duration Invested Assets by Type Total investments were $8,645.5 million at June 30, 2025, with fixed maturities constituting the largest portion at 77.2%. Short-term investments saw a significant reduction since December 2024 Invested Assets by Type (Dollars in Millions) | Asset Type | Jun 30, 2025 Value | Jun 30, 2025 % | Dec 31, 2024 Value | Dec 31, 2024 % | | :--------------------------------------- | :----------------- | :------------- | :----------------- | :------------- | | Fixed Maturities at Fair Value | $6,669.1 | 77.2% | $6,409.6 | 72.1% | | Equity Securities at Fair Value | 284.1 | 3.3% | 218.5 | 2.5% | | Short-term Investments at Cost | 407.6 | 4.7% | 1,037.1 | 11.7% | | Company-Owned Life Insurance | 557.1 | 6.4% | 539.2 | 6.1% | | Total Investments | $8,645.5 | 100.0% | $8,888.5 | 100.0% | - Short-term investments decreased from $1,037.1 million (11.7% of total) at December 31, 2024, to $407.6 million (4.7% of total) at June 30, 2025[51] Fixed Maturities by S&P Equivalent Rating and Duration The majority of fixed maturities (71.1%) are rated AAA, AA, or A as of June 30, 2025, indicating a high-quality portfolio. The duration of total fixed maturities decreased slightly to 7.4 years Fixed Maturities by S&P Equivalent Rating (Dollars in Millions) | Rating | Jun 30, 2025 Value | Jun 30, 2025 % | Dec 31, 2024 Value | Dec 31, 2024 % | | :--------------------------------------- | :----------------- | :------------- | :----------------- | :------------- | | AAA, AA, A | $4,739.9 | 71.1% | $4,576.4 | 71.4% | | BBB | 1,541.1 | 23.1% | 1,557.6 | 24.3% | | BB, B | 333.1 | 5.0% | 221.7 | 3.5% | | CCC or Lower | 55.0 | 0.8% | 53.9 | 0.8% | | Total Investments in Fixed Maturities | $6,669.1 | 100.0% | $6,409.6 | 100.0% | - The duration of total investments in fixed maturities decreased from 7.7 years at December 31, 2024, to 7.4 years at June 30, 2025[53] Investment Concentration The company's non-governmental fixed maturities are primarily concentrated in the Finance, Insurance and Real Estate sector (24.3%), followed by Manufacturing (11.4%). The ten largest state investment exposures in fixed maturities represent 7.5% of total investments Fair Value of Non-governmental Fixed Maturities by Industry (Dollars in Millions) | Industry | Jun 30, 2025 Amount | Jun 30, 2025 % of Total Investments | Dec 31, 2024 Amount | Dec 31, 2024 % of Total Investments | | :--------------------------------------- | :------------------ | :---------------------------------- | :------------------ | :---------------------------------- | | Finance, Insurance and Real Estate | $2,098.9 | 24.3% | $1,969.1 | 22.2% | | Manufacturing | 988.0 | 11.4% | 1,014.3 | 11.4% | | Transportation, Communication and Utilities | 843.5 | 9.8% | 793.0 | 8.9% | | Services | 608.2 | 7.0% | 582.9 | 6.6% | | Total Fair Value of Non-governmental Fixed Maturities | $4,867.3 | 56.3% | $4,683.0 | 52.7% | Ten Largest State Investment Exposures in Fixed Maturities (Dollars in Millions) | State | Jun 30, 2025 Value | Jun 30, 2025 % of Total Investments | | :--------------------------------------- | :----------------- | :---------------------------------- | | California | $133.3 | 1.5% | | Texas | 101.6 | 1.2% | | Michigan | 82.3 | 1.0% | | Georgia | 69.1 | 0.8% | | New York | 60.1 | 0.7% | | Florida | 52.4 | 0.6% | | Pennsylvania | 46.6 | 0.5% | | Virginia | 36.1 | 0.4% | | Louisiana | 35.5 | 0.4% | | Colorado | 34.7 | 0.4% | | Total | $651.7 | 7.5% | Municipal Bond Securities The company holds $1,219.9 million in municipal bond securities as of June 30, 2025, representing 14.1% of total investments. California, Texas, and Michigan are the top three state exposures Municipal Bond Securities by State (Dollars in Millions) | State | Political Subdivision General Obligation | Revenue | State General Obligation | Total Fair Value | % of Total Muni Bond | % of Total Investments | | :--------------------------------------- | :--------------------------------------- | :------ | :----------------------- | :--------------- | :------------------- | :--------------------- | | California | $8.9 | $124.5 | $— | $133.4 | 10.9% | 1.5% | | Texas | 10.5 | 87.6 | 3.5 | 101.6 | 8.3% | 1.2% | | Michigan | — | 71.9 | 10.4 | 82.3 | 6.8% | 1.0% | | Georgia | 2.7 | 61.0 | 5.4 | 69.1 | 5.7% | 0.8% | | New York | 11.3 | 48.8 | — | 60.1 | 4.9% | 0.7% | | Total | $56.1 | $1,093.5 | $70.3 | $1,219.9 | 100.0% | 14.1% | Investments in Limited Liability Companies and Limited Partnerships Total investments in limited liability companies and limited partnerships amounted to $393.8 million at June 30, 2025, with significant portions reported under equity method and other equity interests at fair value, primarily in mezzanine and senior debt Investments in LLCs and LPs by Asset Class (Dollars in Millions) | Asset Class | Jun 30, 2025 Reported Value | Dec 31, 2024 Reported Value | | :--------------------------------------- | :-------------------------- | :-------------------------- | | Reported as Equity Method Limited Liability Investments: | | | | Senior Debt | $19.1 | $19.1 | | Mezzanine Debt | 115.3 | 116.7 | | Real Estate | 24.3 | 27.3 | | Total Equity Method Limited Liability Investments | $176.2 | $186.3 | | Reported as Other Equity Interests at Fair Value: | | | | Mezzanine Debt | $115.7 | $116.9 | | Leveraged Buyout | 32.6 | 19.2 | | Senior Debt | 27.5 | 26.3 | | Total Reported as Other Equity Interests at Fair Value | $198.4 | $183.6 | | Total Investments in Limited Liability Companies and Limited Partnerships | $393.8 | $389.3 | - Unfunded commitments for these investments totaled $230.2 million as of June 30, 2025[59] Definitions of Non-GAAP Financial Measures This section provides detailed definitions and reconciliations for key non-GAAP financial metrics used in the report Adjusted Consolidated Net Operating Income Adjusted Consolidated Net Operating Income is a non-GAAP measure that excludes specific non-recurring or volatile items from Net Income attributable to Kemper Corporation to provide a clearer view of ongoing operational performance - Adjusted Consolidated Net Operating Income is calculated by excluding the after-tax impact of: Change in Fair Value of Equity and Convertible Securities; Net Realized Investment (Losses) Gains; Impairment Losses; Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs; Debt Extinguishment, Pension Settlement and Other Charges; Goodwill Impairment Charges; Non-Core Operations; and Significant non-recurring or infrequent items[61][62][63] Reconciliation of Net Income to Adjusted Consolidated Net Operating Income (Dollars in Millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net Income attributable to Kemper Corporation | $72.6 | $99.7 | $75.4 | $172.3 | $146.7 | | Less Net (Loss) Income From: | | | | | | | Change in Fair Value of Equity and Convertible Securities | (0.4) | 0.1 | (1.0) | (0.3) | 1.7 | | Net Realized Investment (Losses) Gains | (0.1) | 0.7 | 1.2 | 0.6 | 6.4 | | Impairment Losses | (2.8) | 0.2 | (0.1) | (2.6) | (1.3) | | Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs | (3.8) | (4.2) | (5.1) | (8.0) | (15.2) | | Debt Extinguishment, Pension Settlement and Other Charges | — | 0.4 | 2.1 | 0.4 | 2.1 | | Non-Core Operations | (4.4) | (3.9) | (13.4) | (8.3) | (8.4) | | Adjusted Consolidated Net Operating Income | $84.1 | $106.4 | $91.7 | $190.5 | $161.4 | Return on Adjusted Shareholders' Equity Return on Adjusted Shareholders' Equity is a non-GAAP measure that annualizes Net Income attributable to Kemper Corporation and divides it by average shareholders' equity, excluding net unrealized gains/losses on fixed maturities, changes in discount rate on future life policyholder benefits, and goodwill - Return on Adjusted Shareholders' Equity is calculated by dividing the period's annualized Net Income attributable to Kemper Corporation 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[67] Reconciliation of Return on Shareholders' Equity to Return on Adjusted Shareholders' Equity | Metric | Q2 2025 | Q1 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Return on Shareholders' Equity | 9.9% | 14.0% | 11.5% | 11.9% | 11.3% | | Return on Adjusted Shareholders' Equity | 14.9% | 21.0% | 17.6% | 17.9% | 17.4% | Underlying Combined Ratio The Underlying Combined Ratio is a non-GAAP measure that excludes the impact of catastrophe losses and prior-year reserve development from the Combined Ratio, providing a clearer view of the Property & Casualty Insurance segment's underlying underwriting performance - Underlying Combined Ratio is computed by adding the Current Year Non-catastrophe Losses and LAE Ratio with the Insurance Expense Ratio. It excludes the effect of catastrophes and prior-year reserve development[69][70] Adjusted Book Value Per Share Adjusted Book Value Per Share is a non-GAAP measure that divides shareholders' equity (excluding after-tax impact of net unrealized gains/losses on fixed income securities, changes in discount rate on future life policyholder benefits, and goodwill) by total common shares outstanding - Adjusted Book Value Per Share is calculated by dividing shareholders' equity after excluding the after-tax impact of net unrealized gains and losses on fixed income securities, the change in discount rate on future life policyholder benefits and goodwill by total Common Shares Issued and Outstanding[72] Reconciliation of Book Value Per Share to Adjusted Book Value Per Share | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Book Value Per Share | $46.45 | $45.60 | $43.68 | $41.46 | | Less: Net Unrealized Losses on Fixed Maturities | 10.04 | 9.98 | 10.91 | 10.65 | | Less: Change in Discount Rate on Future Life Policyholder Benefits | (5.82) | (5.72) | (5.96) | (5.56) | | Less: Goodwill | (19.66) | (19.55) | (19.59) | (19.41) | | Adjusted Book Value Per Share | $31.01 | $30.31 | $29.04 | $27.14 |