Kemper Announces Schedule for Third Quarter 2023 Earnings Release and Preliminary Results
23 Outubro 2023 - 5:05PM
Business Wire
Reaffirms guidance and provides update on
strategic initiatives
Kemper Corporation (NYSE: KMPR) today announced that after the
markets close on Monday, October 30, Kemper will issue its third
quarter 2023 earnings release and financial supplement. The company
expects to file its Form 10-Q with the Securities and Exchange
Commission on or about October 30. Following their publication,
these documents will be available in the investor section of
kemper.com.
PRELIMINARY RESULTS
Results for the third quarter of 2023 include an estimated net
loss between $140 million and $150 million and an estimated
adjusted consolidated net operating loss1 between $25 million and
$35 million. Net loss for the third quarter includes an estimated
$56 million after-tax non-cash charge related to the termination of
Kemper’s remaining pension plan obligations, which was previously
included within accumulated other comprehensive income (AOCI). The
net loss also includes approximately $25 million of after-tax net
realized losses on investments.
Kemper Auto (Specialty
P&C)
- Preliminary third quarter recorded combined ratios are as
follows:
Combined Ratio
Underlying Combined Ratio1
Kemper Auto
109.9%
100.5%
Kemper Auto: Private Passenger Auto
(PPA)
112.6%
102.1%
Kemper Auto: Commercial Vehicle
98.4%
93.6%
Prior Year Claim Reserve
Strengthening
- Unfavorable prior year reserve development of approximately $78
million was largely associated with Personal Injury Protection
(PIP) in Florida and, to a lesser degree, Bodily Injury (BI) and
Property Damage (PD) coverages.
Rate Increases
- Filed an additional 6% increase on 13% of the book.
- Minimal earned impact this quarter from the approximately
30-point California PPA rate approval, which was effective August
4, 2023.
- Significant earned rate benefits accelerating in the fourth
quarter of 2023 and first quarter of 2024.
Catastrophe Losses
- Pre-tax catastrophe losses for the third quarter were
approximately $7 million2, driven by tropical storms and Midwest
hail/wind activity.
Kemper Life
- After-tax income was approximately $15 million.
Kemper Personal Insurance
(Preferred P&C)
- Segment was moved to non-core operations in the third quarter
after announcing wind-down of the business in August 2023.
Capital and Liquidity
- Parent liquidity was approximately $800 million at the end of
the quarter.
- Insurance companies are well capitalized and consistent with
recent levels.
Strategic Initiatives
- Reciprocal: Establishment of Kemper Reciprocal Exchange
completed; exchange began writing policies in September.
- Bermuda Optimization: Anticipate $250+ million Life dividend to
parent in the fourth quarter of 2023.
- Cost Structure Initiatives: On track to meet or exceed targeted
expense saving commitments.
- Preferred P&C Exit: Proceeding as planned; $175+ million
capital release anticipated by year-end 2024.
Guidance
- The company expects to generate a 2024 Return on Equity (ROE)
of 10% or greater.
1 Non-GAAP financial measure. All Non-GAAP financial measures
are denoted with footnote 1 throughout this release. See below for
further explanation on the use of Non-GAAP financial measures.
2 Pre-tax catastrophe losses for third quarter 2023 were
approximately $21 million, including $14 million from Kemper
Personal Insurance reported within non-core operations.
USE OF NON-GAAP FINANCIAL MEASURES
Adjusted Consolidated Net Operating
Loss1 is an after-tax, non-GAAP financial measure and is
computed by excluding from Net Loss the after-tax impact of:
- Income (Loss) from Change in Fair Value of Equity and
Convertible Securities;
- Net Realized Investment Gains (Losses);
- Impairment (Losses) Gains;
- 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 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 Net Loss. There were no applicable significant
non-recurring items that Kemper excluded from the Adjusted
Consolidated Net Operating Loss calculation for the three months
ended September 30, 2023.
Kemper believes that Adjusted Consolidated Net Operating Loss
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. (Loss) Income from Change in Fair Value of Equity and
Convertible Securities, Net Realized Investment Gains and
Impairment Gains (Losses) 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 Kemper’s investments, the timing of which is
unrelated to the insurance underwriting process. Acquisition and
Disposition Related Transaction, Integration, Restructuring and
Other Costs may vary significantly between periods and are
generally driven by the timing of acquisitions and business
decisions which are unrelated to the insurance underwriting
process. Debt Extinguishment, Pension Settlement and Other Charges
relate to (i) loss from early extinguishment of debt, which is
driven by Kemper’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; (ii) settlement of pension plan
obligations which are business decisions made by Kemper, the timing
of which is unrelated to the underwriting process; and (iii) other
charges that are non-standard, not part of the ordinary course of
business, and unrelated to the insurance underwriting process.
Goodwill impairment charges are excluded because they are
infrequent and non-recurring charges. Non-Core Operations includes
the results of our Preferred Insurance business which we expect to
fully exit. These results are excluded because they are not
relevant to our ongoing operations and do not qualify for
Discontinued Operations under Generally Accepted Accounting
Principles ("GAAP"). Significant non-recurring items are excluded
because, by their nature, they are not indicative of Kemper’s
business or economic trends. The preceding non-GAAP financial
measures should not be considered a substitute for the comparable
GAAP financial measures, as they do not fully recognize the
profitability of Kemper’s businesses.
Underlying Combined Ratio1 is a
non-GAAP financial measure. It is computed by adding the Current
Year Non-catastrophe Losses and LAE (Loss Adjustment Expense) 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 Ratio, including the impact of
catastrophe losses and loss and LAE reserve development from prior
years, with the Insurance Expense Ratio.
Kemper believes Underlying Losses and LAE and the Underlying
Combined Ratio are useful to investors and uses these financial
measures to reveal the trends in Kemper’s Specialty Property &
Casualty Insurance segment that may be obscured by catastrophe
losses and prior-year reserve development. These catastrophe losses
may cause Kemper’s 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 developments are 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 Kemper’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 Kemper’s underwriting performance.
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. We caution investors that
these forward-looking statements are not guarantees of future
performance, and actual results may differ materially. Such
statements involve known and unknown risks, uncertainties, and
other factors, including but not limited to:
- changes in the frequency and severity of insurance claims;
- claim development and the process of estimating claim
reserves;
- the impacts of inflation;
- changes in the interest rate environment;
- supply chain disruption;
- product demand and pricing;
- effects of governmental and regulatory actions;
- litigation outcomes and trends;
- investment risks;
- cybersecurity risks;
- impact of catastrophes; and
- other risks and uncertainties detailed in Kemper’s Annual
Report on Form 10-K and subsequent filings with the Securities and
Exchange Commission (“SEC”).
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.
CONFERENCE CALL DETAILS
Kemper will host its conference call to discuss third quarter
2023 results on Monday, October 30 at 5:00 pm Eastern (4:00 pm
Central). The conference call will be accessible via the internet
and by telephone at 888.259.6580, access code 15917686. To
listen via webcast, register online at the investor section of
kemper.com at least 15 minutes prior to the webcast to install any
necessary software. A replay of the webcast will be available
online at the investor section of kemper.com.
About Kemper
The Kemper family of companies is one of the nation's leading
specialized insurers. With approximately $13 billion in assets,
Kemper is improving the world of insurance by providing affordable
and easy-to-use personalized solutions to individuals, families and
businesses through its Kemper Auto and Kemper Life brands. Kemper
serves over 4.9 million policies, is represented by 26,000 agents
and brokers, and has 8,800 associates dedicated to meeting the
ever-changing needs of its customers. Learn more about
Kemper.
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version on businesswire.com: https://www.businesswire.com/news/home/20231023269623/en/
Investors: Karen Guerra, 312.668.9720, investors@kemper.com News
Media: Barbara Ciesemier, 312.661.4521, bciesemier@kemper.com
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