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Jun 30, 2022
Kemper Q2 2022 Earnings Report
Kemper reported a net loss due to broad inflationary pressures impacting personal automobile margins. Rate increases are expected to offset environmental pressures and improve underwriting profitability.
Key Takeaways
Kemper Corporation reported a net loss of $74.7 million for the second quarter of 2022, compared to a net loss of $62.6 million for the second quarter of 2021. Adjusted Consolidated Net Operating Loss was $39.7 million, compared to $99.4 million in the prior year quarter. The results were impacted by broad inflationary pressures on Personal Automobile margins, though rate increases are expected to improve profitability in the future.
Personal Automobile margins impacted by broad inflationary pressures
Earned rate is accelerating and Q2 rate taking activities exceeded planned actions, with additional rate increases filed for Specialty and Preferred P&C Personal Auto
Commercial Vehicle showed strong momentum, with net written premiums growing 42% year-over-year
Life persistency continues to be above pre-pandemic levels, mortality remains elevated but declined from first quarter
Revenue by Segment
Forward Guidance
Kemper expects rate increases to offset ongoing environmental pressures and help achieve target underwriting profitability.
Positive Outlook
- Rate filing actions exceeded expectations outlined in the first quarter.
- Rate actions are beginning to earn in and will accelerate throughout the remainder of this year and next.
- Rate increases are expected to offset ongoing environmental pressures.
- Target underwriting profitability is expected to be achieved.
- Holding company remains a source of strength for subsidiaries with approximately $1.2B of liquidity.
Challenges Ahead
- Personal Automobile margins impacted by broad inflationary pressures.
- Mortality remains elevated.
- Decrease of $1,157.7 million, or 29 percent, since year-end 2021 primarily driven by a decrease in the fair value of the Company’s fixed income bond portfolio, a net operating loss, and cash dividends to shareholders.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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