Kemper(KMPR) - 2022 Q2 - Quarterly Report

Financial Performance - Total revenues for the six months ended June 30, 2022, were $2,822.5 million, a decrease from $2,859.7 million for the same period in 2021, reflecting a decline of approximately 1.3%[23] - Net income for the six months ended June 30, 2022, was a loss of $169.5 million, compared to a net income of $60.6 million for the same period in 2021, indicating a significant downturn[26] - Total expenses for the six months ended June 30, 2022, increased to $3,047.1 million, up from $2,901.2 million in 2021, resulting in a loss from continuing operations before income taxes of $224.6 million[53] - The total comprehensive income (loss) for the six months ended June 30, 2022, was a loss of $1,138.4 million, compared to a loss of $76.9 million in the same period of 2021[26] - For the three months ended June 30, 2022, Kemper Corporation reported a net loss of $74.7 million, compared to a net loss of $62.6 million for the same period in 2021[45] Premiums and Claims - Earned premiums increased to $2,692.3 million for the six months ended June 30, 2022, from $2,538.5 million in the prior year, representing a growth of approximately 6.0%[23] - Policyholders' benefits and incurred losses and loss adjustment expenses rose to $2,323.7 million for the six months ended June 30, 2022, compared to $2,113.6 million in 2021, marking an increase of about 9.9%[23] - Earned premiums for the Specialty Property & Casualty Insurance segment increased to $2,065.3 million for the six months ended June 30, 2022, compared to $1,887.9 million in 2021, reflecting a growth of 9.4%[57] - The Life & Health Insurance segment reported earned premiums of $321.5 million for the six months ended June 30, 2022, slightly down from $325.2 million in 2021[57] - The Preferred Property & Casualty Insurance segment earned premiums decreased to $305.5 million for the six months ended June 30, 2022, from $325.4 million in 2021, a decline of 6.0%[57] Investment Performance - The company reported a net realized investment loss of $68.7 million for the six months ended June 30, 2022, compared to a gain of $93.0 million in the same period of 2021[23] - The company reported net realized investment gains of $12.5 million for the six months ended June 30, 2022, compared to $33.0 million in 2021[59] - The total unrealized losses on Fixed Maturities at June 30, 2022 amounted to $675.8 million, with $615.1 million attributed to investments held for less than 12 months[72] - Investments in Equity Securities at Fair Value decreased from $830.6 million at December 31, 2021 to $395.0 million at June 30, 2022, with net unrealized losses of $19.3 million recognized in earnings during the first half of 2022[80] - The company reported total investment income of $236.5 million for the six months ended June 30, 2022, compared to $234.4 million for the same period in 2021[93] Assets and Liabilities - Total assets decreased from $14,916.5 million in December 2021 to $13,953.0 million in June 2022, a decline of approximately 6.5%[29] - Total liabilities increased from $10,908.8 million in December 2021 to $11,103.0 million in June 2022, an increase of approximately 1.8%[29] - Shareholders' equity decreased from $4,007.7 million in December 2021 to $2,850.0 million in June 2022, a decline of about 29%[29] - The company’s policyholder obligations increased from $504.0 million in December 2021 to $704.5 million in June 2022, an increase of approximately 39.7%[29] - The company reported a carrying value of $282.3 million for loans to policyholders as of June 30, 2022, with a fair value also at $282.3 million[124] Cash Flow and Financing - Cash flow from operating activities was a negative $90.0 million for the six months ended June 30, 2022, compared to a positive $237.7 million in 2021[32] - The company reported a net cash provided by financing activities of $422.9 million for the six months ended June 30, 2022, compared to a net cash used of $260.8 million in 2021[32] - The company issued 3.800% Senior Notes due February 23, 2032, generating proceeds of $396.3 million[32] - The Company entered into an amended and extended credit agreement increasing borrowing capacity to $600.0 million, with an accordion feature allowing an increase to $800.0 million[153] - The company did not repurchase any shares of its common stock during the six months ended June 30, 2022, while it repurchased approximately 2,045,000 shares for $158.7 million during the same period in 2021[140] Operational Challenges and Strategic Focus - The company anticipates ongoing challenges related to inflation and increased costs in claims, which may impact future performance[19] - Kemper is focusing on enhancing its technology and data security measures to mitigate risks associated with cyber threats and improve operational efficiency[21] - The company has adopted all recently issued accounting pronouncements with effective dates prior to January 1, 2022, with no material impact on the financial statements[41] - The company does not anticipate that any pending legal proceedings will materially affect its financial statements, reflecting a stable legal environment[181] - The company determined it is not the primary beneficiary of the variable interest entity, thus not required to consolidate it in the financial statements[126]