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Sep 30, 2021
Kemper Q3 2021 Earnings Report
Kemper reported a net loss due to industry-related environmental pressures and an atypical surge in Florida personal injury protection litigation. Corrective actions are underway to improve profitability. The Life business saw persistency improvements but increased COVID-related mortality.
Key Takeaways
Kemper Corporation reported a net loss of $75.3 million for Q3 2021, compared to a net income of $122.3 million in Q3 2020. The results were impacted by industry-related environmental pressures, increased loss costs in P&C segments, and a surge in Florida personal injury protection litigation. Corrective actions are in progress to return to target profitability.
Specialty P&C earned premiums increased 18% and policies-in-force grew approximately 17.8%.
Specialty P&C underlying combined ratio was 108.9%, due to higher claim frequency and severity trends.
Specialty P&C experienced adverse prior year development of $25M, primarily driven by legal developments in Florida.
Consolidated catastrophe losses were $32.4 million, mainly related to Hurricane Ida and wind/hail events.
Revenue by Segment
Forward Guidance
Kemper is taking corrective actions, including rate increases and non-rate actions, to return to target profitability and position for growth in 2023. The company's balance sheet is expected to provide financial stability, and its capital and liquidity positions are expected to enable navigation and optimization of the current environment.
Positive Outlook
- Corrective actions including rate increases are in progress.
- Non-rate actions are in progress.
- Targeting profitability and growth in 2023.
- Strong capital position.
- Strong liquidity positions.
Challenges Ahead
- Continued industry-related environmental pressures.
- Increases in loss costs in P&C segments.
- Atypical second surge in Florida personal injury protection litigation.
- Increased COVID-related mortality due to the Delta variant.
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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