Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - KEMPER Corp | kmpr20160331168-kreleasean.htm |
| EX-99.1 - REGISTRANTS PRESS RELEASE DATED MAY 5, 2016 - KEMPER Corp | kmpr2016033116ex991release.htm |
Exhibit 99.2
Investor Supplement
First Quarter 2016
The financial statements and financial exhibits included herein are unaudited. These financial statements and exhibits should be read in conjunction with the Company’s periodic reports on Form 10-K, Form 10-Q and Form 8-K. The results of operations for interim periods should not be considered indicative of results to be expected for the full year.
Non-GAAP Financial Measures
This document contains non-GAAP financial measures to analyze the Company’s operating performance for the periods presented. Because the Company’s calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing the Company’s non-GAAP financial measures to those of other companies. For detailed disclosures on non-GAAP financial measures please refer to the “Definitions of Non-GAAP Financial Measures” on Page 29.
Kemper Corporation
Investor Supplement
First Quarter 2016
Table of Contents
Page | |
Consolidated Financial Highlights | 3 |
Consolidated Statements of Operations | 4 |
Consolidated Balance Sheets | 5 |
Consolidated Statements of Cash Flows | 6-7 |
Capital Metrics | 8 |
Debt Outstanding and Ratings | 9 |
Segment Summary Results: | |
Revenues | 10 |
Operating Profit (Loss) | 11 |
Net Operating Income (Loss) | 11 |
Earned Premiums by Product | 12 |
Net Investment Income by Segment | 12 |
Catastrophe Frequency and Severity | 13 |
Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information | 14-15 |
Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information by Product: | |
Preferred Personal Automobile Insurance | 16 |
Non-standard Personal Automobile Insurance | 17 |
Total Personal Automobile Insurance | 18 |
Commercial Automobile Insurance | 19 |
Total Automobile Insurance | 20 |
Homeowners Insurance | 21 |
Other Personal Lines | 22 |
Life & Health Insurance Segment - Results of Operations and Selected Financial Information | 23 |
Details of Investment Performance | 24 |
Details of Invested Assets | 25 |
Investment Concentration | 26 |
Municipal Bond Securities | 27 |
Investments in Limited Liability Companies and Limited Partnerships | 28 |
Definitions of Non-GAAP Financial Measures | 29-30 |
Page 2
Kemper Corporation Consolidated Financial Highlights (Dollars in Millions, Except Per Share Amounts) (Unaudited) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||||||||||
For Period Ended | |||||||||||||||||||
Earned Premiums | $ | 546.0 | $ | 541.5 | $ | 536.7 | $ | 500.1 | $ | 431.3 | |||||||||
Net Investment Income | 67.0 | 79.4 | 75.9 | 76.7 | 70.6 | ||||||||||||||
Net Investment Gains (Losses) and Other Income | (1.7 | ) | (3.9 | ) | 2.8 | 32.4 | (2.7 | ) | |||||||||||
Total Revenues | $ | 611.3 | $ | 617.0 | $ | 615.4 | $ | 609.2 | $ | 499.2 | |||||||||
Consolidated Net Operating Income (Loss) 1 | $ | (0.6 | ) | $ | 4.8 | $ | 36.6 | $ | 6.7 | $ | 21.8 | ||||||||
Income (Loss) from Continuing Operations | $ | (2.2 | ) | $ | 1.3 | $ | 38.0 | $ | 27.4 | $ | 13.5 | ||||||||
Net Income (Loss) | $ | (2.1 | ) | $ | 4.6 | $ | 37.9 | $ | 29.7 | $ | 13.5 | ||||||||
Per Unrestricted Common Share Amounts: | |||||||||||||||||||
Basic: | |||||||||||||||||||
Consolidated Net Operating Income (Loss) 1 | $ | (0.01 | ) | $ | 0.09 | $ | 0.70 | $ | 0.13 | $ | 0.42 | ||||||||
Income (Loss) from Continuing Operations | $ | (0.04 | ) | $ | 0.03 | $ | 0.73 | $ | 0.53 | $ | 0.26 | ||||||||
Net Income (Loss) | $ | (0.04 | ) | $ | 0.09 | $ | 0.73 | $ | 0.57 | $ | 0.26 | ||||||||
Diluted: | |||||||||||||||||||
Consolidated Net Operating Income (Loss) 1 | $ | (0.01 | ) | $ | 0.09 | $ | 0.70 | $ | 0.13 | $ | 0.42 | ||||||||
Income (Loss) from Continuing Operations | $ | (0.04 | ) | $ | 0.03 | $ | 0.73 | $ | 0.53 | $ | 0.26 | ||||||||
Net Income (Loss) | $ | (0.04 | ) | $ | 0.09 | $ | 0.73 | $ | 0.57 | $ | 0.26 | ||||||||
Dividends Paid to Shareholders Per Share | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | |||||||||
At Period End | |||||||||||||||||||
Total Assets | $ | 8,169.7 | $ | 8,036.1 | $ | 8,075.6 | $ | 8,055.1 | $ | 7,885.0 | |||||||||
Insurance Reserves | $ | 4,258.8 | $ | 4,203.8 | $ | 4,180.7 | $ | 4,187.2 | $ | 4,019.6 | |||||||||
Debt | $ | 750.9 | $ | 750.6 | $ | 750.4 | $ | 750.2 | $ | 750.0 | |||||||||
Shareholders’ Equity | $ | 2,041.1 | $ | 1,992.4 | $ | 2,024.6 | $ | 2,012.3 | $ | 2,109.9 | |||||||||
Shareholders’ Equity Excluding Goodwill | $ | 1,718.1 | $ | 1,669.4 | $ | 1,701.6 | $ | 1,693.8 | $ | 1,798.1 | |||||||||
Common Shares Issued and Outstanding (In Millions) | 51.133 | 51.327 | 51.318 | 51.803 | 51.826 | ||||||||||||||
Book Value Per Share2 | $ | 39.92 | $ | 38.82 | $ | 39.45 | $ | 38.85 | $ | 40.71 | |||||||||
Book Value Per Share Excluding Goodwill1,2 | $ | 33.60 | $ | 32.52 | $ | 33.16 | $ | 32.70 | $ | 34.69 | |||||||||
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1,2 | $ | 34.97 | $ | 35.13 | $ | 35.04 | $ | 34.71 | $ | 34.64 | |||||||||
Debt to Total Capitalization2 | 26.9 | % | 27.4 | % | 27.0 | % | 27.2 | % | 26.2 | % | |||||||||
Rolling 12 Months Return on 5-point Average Shareholders Equity2,3 | 3.4 | % | 4.2 | % | 7.1 | % | 5.4 | % | 4.4 | % | |||||||||
1 Non-GAAP Measure. See page 29 for definition. | |||||||||||||||||||
2 See Capital Metrics on page 8 for detail calculations. | |||||||||||||||||||
3 Rolling 12 Months Return on 5-point Average Shareholders Equity is calculated by taking the last 12 months of Net Income (Loss) divided by the 5-point average Shareholders’ Equity. The 5-point Average Shareholders’ Equity is calculated by using a 5-point quarter average of Shareholders’ Equity for the 12 month period. | |||||||||||||||||||
Page 3
Kemper Corporation Consolidated Statements of Operations (Dollars in Millions, Except Per Share Amounts) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Earned Premiums | $ | 546.0 | $ | 541.5 | $ | 536.7 | $ | 500.1 | $ | 431.3 | ||||||||||
Net Investment Income | 67.0 | 79.4 | 75.9 | 76.7 | 70.6 | |||||||||||||||
Other Income | 0.8 | 1.4 | 0.8 | 0.6 | 0.9 | |||||||||||||||
Net Realized Gains on Sales of Investments | 6.8 | 9.4 | 5.3 | 34.0 | 3.4 | |||||||||||||||
Other-than-temporary Impairment Losses: | ||||||||||||||||||||
Total Other-than-temporary Impairment Losses | (9.6 | ) | (14.9 | ) | (3.3 | ) | (2.2 | ) | (7.0 | ) | ||||||||||
Portion of Losses Recognized in Other Comprehensive Income | 0.3 | 0.2 | — | — | — | |||||||||||||||
Net Impairment Losses Recognized in Earnings | (9.3 | ) | (14.7 | ) | (3.3 | ) | (2.2 | ) | (7.0 | ) | ||||||||||
Total Revenues | 611.3 | 617.0 | 615.4 | 609.2 | 499.2 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses | 436.2 | 416.0 | 378.8 | 375.1 | 297.7 | |||||||||||||||
Insurance Expenses | 159.3 | 177.0 | 161.1 | 162.1 | 144.9 | |||||||||||||||
Write-offs of Long-lived Assets | — | — | — | 11.1 | — | |||||||||||||||
Loss from Early Extinguishment of Debt | — | — | — | — | 9.1 | |||||||||||||||
Interest and Other Expenses | 22.3 | 25.6 | 25.7 | 26.6 | 29.7 | |||||||||||||||
Total Expenses | 617.8 | 618.6 | 565.6 | 574.9 | 481.4 | |||||||||||||||
Income (Loss) from Continuing Operations before Income Taxes | (6.5 | ) | (1.6 | ) | 49.8 | 34.3 | 17.8 | |||||||||||||
Income Tax Benefit (Expense) | 4.3 | 2.9 | (11.8 | ) | (6.9 | ) | (4.3 | ) | ||||||||||||
Income (Loss) from Continuing Operations | (2.2 | ) | 1.3 | 38.0 | 27.4 | 13.5 | ||||||||||||||
Discontinued Operations: | ||||||||||||||||||||
Income from Discontinued Operations before Income Taxes | 0.1 | 5.1 | — | 3.5 | — | |||||||||||||||
Income Tax Expense | — | (1.8 | ) | (0.1 | ) | (1.2 | ) | — | ||||||||||||
Income (Loss) from Discontinued Operations | 0.1 | 3.3 | (0.1 | ) | 2.3 | — | ||||||||||||||
Net Income (Loss) | $ | (2.1 | ) | $ | 4.6 | $ | 37.9 | $ | 29.7 | $ | 13.5 | |||||||||
Income (Loss) from Continuing Operations Per Unrestricted Share: | ||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | 0.03 | $ | 0.73 | $ | 0.53 | $ | 0.26 | |||||||||
Diluted | $ | (0.04 | ) | $ | 0.03 | $ | 0.73 | $ | 0.53 | $ | 0.26 | |||||||||
Net Income (Loss) Per Unrestricted Share: | ||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | 0.09 | $ | 0.73 | $ | 0.57 | $ | 0.26 | |||||||||
Diluted | $ | (0.04 | ) | $ | 0.09 | $ | 0.73 | $ | 0.57 | $ | 0.26 | |||||||||
Dividends Paid to Shareholders Per Share | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | ||||||||||
Weighted Average Unrestricted Common Shares Outstanding (in Millions) | 51.192 | 51.215 | 51.612 | 51.728 | 51.873 | |||||||||||||||
Page 4
Kemper Corporation Consolidated Balance Sheets (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Assets: | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Fixed Maturities at Fair Value | $ | 4,917.4 | $ | 4,852.3 | $ | 4,844.9 | $ | 4,764.0 | $ | 4,803.1 | ||||||||||
Equity Securities at Fair Value | 501.3 | 523.2 | 535.7 | 562.9 | 628.6 | |||||||||||||||
Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings | 190.5 | 190.6 | 179.4 | 173.5 | 168.1 | |||||||||||||||
Fair Value Option Investments | 161.9 | 164.5 | 166.1 | 160.0 | 54.2 | |||||||||||||||
Short-term Investments at Cost which Approximates Fair Value | 367.4 | 255.7 | 295.9 | 338.4 | 357.3 | |||||||||||||||
Other Investments | 443.8 | 443.2 | 451.0 | 451.0 | 450.1 | |||||||||||||||
Total Investments | 6,582.3 | 6,429.5 | 6,473.0 | 6,449.8 | 6,461.4 | |||||||||||||||
Cash | 160.4 | 161.7 | 147.1 | 93.8 | 87.7 | |||||||||||||||
Receivables from Policyholders | 341.1 | 332.4 | 347.9 | 335.2 | 293.1 | |||||||||||||||
Other Receivables | 193.9 | 193.2 | 198.9 | 267.1 | 197.0 | |||||||||||||||
Deferred Policy Acquisition Costs | 319.3 | 316.4 | 325.8 | 317.5 | 305.6 | |||||||||||||||
Goodwill | 323.0 | 323.0 | 323.0 | 318.5 | 311.8 | |||||||||||||||
Current and Deferred Income Tax Assets | 15.5 | 41.4 | 22.3 | 34.2 | 10.9 | |||||||||||||||
Other Assets | 234.2 | 238.5 | 237.6 | 239.0 | 217.5 | |||||||||||||||
Total Assets | $ | 8,169.7 | $ | 8,036.1 | $ | 8,075.6 | $ | 8,055.1 | $ | 7,885.0 | ||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||
Insurance Reserves: | ||||||||||||||||||||
Life and Health | $ | 3,358.4 | $ | 3,341.0 | $ | 3,327.8 | $ | 3,312.8 | $ | 3,299.5 | ||||||||||
Property and Casualty | 900.4 | 862.8 | 852.9 | 874.4 | 720.1 | |||||||||||||||
Total Insurance Reserves | 4,258.8 | 4,203.8 | 4,180.7 | 4,187.2 | 4,019.6 | |||||||||||||||
Unearned Premiums | 621.6 | 613.1 | 629.4 | 606.2 | 530.0 | |||||||||||||||
Liabilities for Income Taxes | 10.2 | 3.8 | 3.7 | 3.6 | 58.2 | |||||||||||||||
Debt at Amortized Cost | 750.9 | 750.6 | 750.4 | 750.2 | 750.0 | |||||||||||||||
Accrued Expenses and Other Liabilities | 487.1 | 472.4 | 486.8 | 495.6 | 417.3 | |||||||||||||||
Total Liabilities | 6,128.6 | 6,043.7 | 6,051.0 | 6,042.8 | 5,775.1 | |||||||||||||||
Shareholders’ Equity: | ||||||||||||||||||||
Common Stock | 5.1 | 5.1 | 5.1 | 5.2 | 5.2 | |||||||||||||||
Paid-in Capital | 652.6 | 654.0 | 651.9 | 657.1 | 655.1 | |||||||||||||||
Retained Earnings | 1,192.7 | 1,209.0 | 1,218.6 | 1,204.7 | 1,189.3 | |||||||||||||||
Accumulated Other Comprehensive Income | 190.7 | 124.3 | 149.0 | 145.3 | 260.3 | |||||||||||||||
Total Shareholders’ Equity | 2,041.1 | 1,992.4 | 2,024.6 | 2,012.3 | 2,109.9 | |||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 8,169.7 | $ | 8,036.1 | $ | 8,075.6 | $ | 8,055.1 | $ | 7,885.0 | ||||||||||
Page 5
Kemper Corporation Consolidated Statements of Cash Flows (Dollars in Millions) (Unaudited) | ||||||||
Three Months Ended | ||||||||
Mar 31, 2016 | Mar 31, 2015 | |||||||
Operating Activities: | ||||||||
Net Income (Loss) | $ | (2.1 | ) | $ | 13.5 | |||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: | ||||||||
Increase in Deferred Policy Acquisition Costs | (2.9 | ) | (2.3 | ) | ||||
Amortization of Intangible Assets Acquired | 1.6 | 1.6 | ||||||
Equity in Earnings of Equity Method Limited Liability Investments | 4.3 | 0.7 | ||||||
Distribution of Accumulated Earnings of Equity Method Limited Liability Investments | 5.4 | 0.4 | ||||||
Decrease (Increase) in Value of Fair Value Option Investments Reported in Net Investment Income | 2.6 | (0.9 | ) | |||||
Amortization of Investment Securities and Depreciation of Investment Real Estate | 4.3 | 2.7 | ||||||
Net Realized Gains on Sales of Investments | (6.8 | ) | (3.4 | ) | ||||
Net Impairment Losses Recognized in Earnings | 9.3 | 7.0 | ||||||
Loss from Early Extinguishment of Debt | — | 9.1 | ||||||
Depreciation of Property and Equipment | 4.0 | 3.2 | ||||||
Increase in Receivables | (10.1 | ) | (8.4 | ) | ||||
Increase in Insurance Reserves | 54.6 | 11.5 | ||||||
Increase (Decrease) in Unearned Premiums | 8.5 | (6.9 | ) | |||||
Change in Income Taxes | (4.6 | ) | (10.5 | ) | ||||
Increase in Accrued Expenses and Other Liabilities | 5.1 | 1.9 | ||||||
Other, Net | 4.0 | 9.8 | ||||||
Net Cash Provided by Operating Activities (Carryforward to page 7) | 77.2 | 29.0 | ||||||
Page 6
Kemper Corporation Consolidated Statements of Cash Flows (Dollars in Millions) (Unaudited) | ||||||||
Three Months Ended | ||||||||
Mar 31, 2016 | Mar 31, 2015 | |||||||
Net Cash Provided by Operating Activities (Carryforward from page 6) | 77.2 | 29.0 | ||||||
Investing Activities: | ||||||||
Sales, Paydowns and Maturities of Fixed Maturities | 142.0 | 121.7 | ||||||
Purchases of Fixed Maturities | (102.7 | ) | (92.3 | ) | ||||
Sales of Equity Securities | 41.6 | 18.7 | ||||||
Purchases of Equity Securities | (19.0 | ) | (11.7 | ) | ||||
Return of Investment of Equity Method Limited Liability Investments | 5.5 | 16.3 | ||||||
Acquisitions of Equity Method Limited Liability Investments | (15.0 | ) | (4.7 | ) | ||||
Increase in Short-term Investments | (111.7 | ) | (15.2 | ) | ||||
Improvements of Investment Real Estate | (0.9 | ) | (0.6 | ) | ||||
Increase in Other Investments | (1.0 | ) | (1.1 | ) | ||||
Acquisition of Software | (1.3 | ) | (2.9 | ) | ||||
Other, Net | (0.5 | ) | (0.5 | ) | ||||
Net Cash Provided (Used) by Investing Activities | (63.0 | ) | 27.7 | |||||
Financing Activities: | ||||||||
Net Proceeds from Issuances of Debt | 10.0 | 267.8 | ||||||
Repayments of Debt | (10.0 | ) | (279.3 | ) | ||||
Common Stock Repurchases | (3.8 | ) | (23.4 | ) | ||||
Dividends and Dividend Equivalents Paid | (12.2 | ) | (12.3 | ) | ||||
Cash Exercise of Stock Options | — | 1.6 | ||||||
Other, Net | 0.5 | 0.5 | ||||||
Net Cash Used by Financing Activities | (15.5 | ) | (45.1 | ) | ||||
Increase (Decrease) in Cash | (1.3 | ) | 11.6 | |||||
Cash, Beginning of Year | 161.7 | 76.1 | ||||||
Cash, End of Period | $ | 160.4 | $ | 87.7 | ||||
Page 7
Kemper Corporation Capital Metrics (Dollars and Shares in Millions, Except Per Share Amounts) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Book Value Per Share | ||||||||||||||||||||
Numerator | ||||||||||||||||||||
Shareholders’ Equity | $ | 2,041.1 | $ | 1,992.4 | $ | 2,024.6 | $ | 2,012.3 | $ | 2,109.9 | ||||||||||
Less: Goodwill | (323.0 | ) | (323.0 | ) | (323.0 | ) | (318.5 | ) | (311.8 | ) | ||||||||||
Shareholders’ Equity Excluding Goodwill | $ | 1,718.1 | $ | 1,669.4 | $ | 1,701.6 | $ | 1,693.8 | $ | 1,798.1 | ||||||||||
Shareholders’ Equity | $ | 2,041.1 | $ | 1,992.4 | $ | 2,024.6 | $ | 2,012.3 | $ | 2,109.9 | ||||||||||
Less: Net Unrealized Gains on Fixed Maturities | (253.0 | ) | (189.2 | ) | (226.2 | ) | (214.4 | ) | (314.6 | ) | ||||||||||
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities | $ | 1,788.1 | $ | 1,803.2 | $ | 1,798.4 | $ | 1,797.9 | $ | 1,795.3 | ||||||||||
Denominator | ||||||||||||||||||||
Common Shares Issued and Outstanding | 51.133 | 51.327 | 51.318 | 51.803 | 51.826 | |||||||||||||||
Book Value Per Share | $ | 39.92 | $ | 38.82 | $ | 39.45 | $ | 38.85 | $ | 40.71 | ||||||||||
Book Value Per Share Excluding Goodwill | $ | 33.60 | $ | 32.52 | $ | 33.16 | $ | 32.70 | $ | 34.69 | ||||||||||
Book Value Per Share Excluding Unrealized on Fixed Maturities | $ | 34.97 | $ | 35.13 | $ | 35.04 | $ | 34.71 | $ | 34.64 | ||||||||||
Return on Shareholders’ Equity | ||||||||||||||||||||
Numerator | ||||||||||||||||||||
Rolling 12 Months Net Income | $ | 70.1 | $ | 85.7 | $ | 146.5 | $ | 113.3 | $ | 92.9 | ||||||||||
Denominator (5-point Average) | ||||||||||||||||||||
5-point Average Shareholders’ Equity | $ | 2,036.1 | $ | 2,046.0 | $ | 2,068.4 | $ | 2,091.2 | $ | 2,117.7 | ||||||||||
Rolling 12 Months Return on Average Shareholders' Equity (5-point Average) | 3.4 | % | 4.2 | % | 7.1 | % | 5.4 | % | 4.4 | % | ||||||||||
Debt and Total Capitalization | ||||||||||||||||||||
Debt | $ | 750.9 | $ | 750.6 | $ | 750.4 | $ | 750.2 | $ | 750.0 | ||||||||||
Shareholders’ Equity | 2,041.1 | 1,992.4 | 2,024.6 | 2,012.3 | 2,109.9 | |||||||||||||||
Total Capitalization | $ | 2,792.0 | $ | 2,743.0 | $ | 2,775.0 | $ | 2,762.5 | $ | 2,859.9 | ||||||||||
Ratio of Debt to Shareholders’ Equity | 36.8 | % | 37.7 | % | 37.1 | % | 37.3 | % | 35.5 | % | ||||||||||
Ratio of Debt to Total Capitalization | 26.9 | % | 27.4 | % | 27.0 | % | 27.2 | % | 26.2 | % | ||||||||||
Parent Company Liquidity | ||||||||||||||||||||
Kemper Holding Company Cash and Investments | $ | 295.7 | $ | 341.2 | $ | 343.3 | $ | 378.8 | $ | 290.2 | ||||||||||
Borrowings Available Under Credit Agreement | 225.0 | 225.0 | 225.0 | 225.0 | 225.0 | |||||||||||||||
Parent Company Liquidity | $ | 520.7 | $ | 566.2 | $ | 568.3 | $ | 603.8 | $ | 515.2 | ||||||||||
Capital Returned to Shareholders | ||||||||||||||||||||
Common Stock Repurchased | $ | 3.8 | $ | 2.2 | $ | 17.6 | $ | 1.8 | $ | 21.9 | ||||||||||
Cash Dividends Paid | 12.2 | 12.4 | 12.5 | 12.5 | 12.3 | |||||||||||||||
Total Capital Returned to Shareholders | $ | 16.0 | $ | 14.6 | $ | 30.1 | $ | 14.3 | $ | 34.2 | ||||||||||
Page 8
Kemper Corporation Debt Outstanding and Ratings (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Kemper Corporation: | ||||||||||||||||||||
Notes Payable under Revolving Credit Agreement | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Senior Notes at Amortized Cost: | ||||||||||||||||||||
6.00% Senior Notes due May 15, 2017 | 359.3 | 359.1 | 358.9 | 358.8 | 358.6 | |||||||||||||||
4.35% Senior Notes due February 15, 2025 | 247.5 | 247.4 | 247.4 | 247.3 | 247.3 | |||||||||||||||
7.375% Subordinated Debentures due February 27, 2054 at Amortized Cost | 144.1 | 144.1 | 144.1 | 144.1 | 144.1 | |||||||||||||||
Debt Outstanding | $ | 750.9 | $ | 750.6 | $ | 750.4 | $ | 750.2 | $ | 750.0 | ||||||||||
Subsidiary Debt: | ||||||||||||||||||||
Federal Home Loan Bank of Dallas | — | — | — | — | — | |||||||||||||||
Federal Home Loan Bank of Chicago | — | — | — | — | — | |||||||||||||||
A.M. Best | Moody’s | S&P | Fitch | |||||||||||||||||
As of Date of Financial Supplement | ||||||||||||||||||||
Kemper Debt Ratings: | ||||||||||||||||||||
Senior Notes Payable | bbb- | Baa3 | BBB- | BBB- | ||||||||||||||||
Subordinated Debentures | bb+ | Ba1 | BB | BB | ||||||||||||||||
Insurance Company Financial Strength Ratings: | ||||||||||||||||||||
Trinity Universal Insurance Company | A- | A3 | A- | A- | ||||||||||||||||
United Insurance Company of America | A- | A3 | A- | A- | ||||||||||||||||
Reserve National Insurance Company | A- | NR | NR | NR | ||||||||||||||||
NR - Not Rated
Page 9
Kemper Corporation Segment Revenues (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Property & Casualty Insurance: | ||||||||||||||||||||
Earned Premiums: | ||||||||||||||||||||
Personal Automobile | $ | 303.3 | $ | 296.8 | $ | 288.5 | $ | 252.6 | $ | 189.8 | ||||||||||
Homeowners | 68.1 | 70.0 | 72.1 | 71.6 | 72.6 | |||||||||||||||
Other Personal | 11.3 | 11.5 | 11.8 | 11.7 | 11.7 | |||||||||||||||
Total Personal | 382.7 | 378.3 | 372.4 | 335.9 | 274.1 | |||||||||||||||
Commercial Automobile | 13.5 | 13.8 | 13.7 | 13.5 | 13.5 | |||||||||||||||
Total Earned Premiums | 396.2 | 392.1 | 386.1 | 349.4 | 287.6 | |||||||||||||||
Net Investment Income | 11.9 | 21.6 | 18.3 | 18.6 | 14.8 | |||||||||||||||
Other Income | 0.2 | 0.1 | 0.1 | 0.1 | 0.3 | |||||||||||||||
Total Property & Casualty Insurance | 408.3 | 413.8 | 404.5 | 368.1 | 302.7 | |||||||||||||||
Life & Health Insurance: | ||||||||||||||||||||
Earned Premiums: | ||||||||||||||||||||
Life | 94.4 | 94.6 | 95.5 | 96.0 | 88.0 | |||||||||||||||
Accident and Health | 36.9 | 36.2 | 36.2 | 35.7 | 36.8 | |||||||||||||||
Property | 18.5 | 18.6 | 18.9 | 19.0 | 18.9 | |||||||||||||||
Total Earned Premiums | 149.8 | 149.4 | 150.6 | 150.7 | 143.7 | |||||||||||||||
Net Investment Income | 55.0 | 55.2 | 55.1 | 53.5 | 50.4 | |||||||||||||||
Other Income | 0.6 | 0.7 | 0.7 | 0.2 | 0.8 | |||||||||||||||
Total Life & Health Insurance | 205.4 | 205.3 | 206.4 | 204.4 | 194.9 | |||||||||||||||
Total Segment Revenues | 613.7 | 619.1 | 610.9 | 572.5 | 497.6 | |||||||||||||||
Net Realized Gains on Sales of Investments | 6.8 | 9.4 | 5.3 | 34.0 | 3.4 | |||||||||||||||
Net Impairment Losses Recognized in Earnings | (9.3 | ) | (14.7 | ) | (3.3 | ) | (2.2 | ) | (7.0 | ) | ||||||||||
Other | 0.1 | 3.2 | 2.5 | 4.9 | 5.2 | |||||||||||||||
Total Revenues | $ | 611.3 | $ | 617.0 | $ | 615.4 | $ | 609.2 | $ | 499.2 | ||||||||||
Page 10
Kemper Corporation Segment Operating Results (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Segment Operating Profit (Loss): | ||||||||||||||||||||
Property & Casualty Insurance | $ | (22.8 | ) | $ | (10.9 | ) | $ | 25.0 | $ | (8.4 | ) | $ | 18.0 | |||||||
Life & Health Insurance | 31.0 | 27.3 | 35.4 | 22.2 | 24.8 | |||||||||||||||
Total Segment Operating Profit | 8.2 | 16.4 | 60.4 | 13.8 | 42.8 | |||||||||||||||
Corporate and Other Operating Loss | (12.2 | ) | (12.7 | ) | (12.6 | ) | (11.3 | ) | (12.3 | ) | ||||||||||
Total Operating Profit (Loss) | (4.0 | ) | 3.7 | 47.8 | 2.5 | 30.5 | ||||||||||||||
Net Realized Gains on Sales of Investments | 6.8 | 9.4 | 5.3 | 34.0 | 3.4 | |||||||||||||||
Net Impairment Losses Recognized in Earnings | (9.3 | ) | (14.7 | ) | (3.3 | ) | (2.2 | ) | (7.0 | ) | ||||||||||
Loss from Early Extinguishment of Debt | — | — | — | — | (9.1 | ) | ||||||||||||||
Income (Loss) from Continuing Operations before Income Taxes | $ | (6.5 | ) | $ | (1.6 | ) | $ | 49.8 | $ | 34.3 | $ | 17.8 | ||||||||
Segment Net Operating Income (Loss): | ||||||||||||||||||||
Property & Casualty Insurance | $ | (13.1 | ) | $ | (5.1 | ) | $ | 21.0 | $ | (2.6 | ) | $ | 13.4 | |||||||
Life & Health Insurance | 20.3 | 17.8 | 23.5 | 14.3 | 16.1 | |||||||||||||||
Total Segment Net Operating Income | 7.2 | 12.7 | 44.5 | 11.7 | 29.5 | |||||||||||||||
Corporate and Other Net Operating Loss | (7.8 | ) | (7.9 | ) | (7.9 | ) | (5.0 | ) | (7.7 | ) | ||||||||||
Consolidated Operating Income (Loss) | (0.6 | ) | 4.8 | 36.6 | 6.7 | 21.8 | ||||||||||||||
Net Income (Loss) From: | ||||||||||||||||||||
Net Realized Gains on Sales of Investments | 4.4 | 6.1 | 3.5 | 22.1 | 2.2 | |||||||||||||||
Net Impairment Losses Recognized in Earnings | (6.0 | ) | (9.6 | ) | (2.1 | ) | (1.4 | ) | (4.6 | ) | ||||||||||
Loss from Early Extinguishment of Debt | — | — | — | — | (5.9 | ) | ||||||||||||||
Income (Loss) from Continuing Operations | $ | (2.2 | ) | $ | 1.3 | $ | 38.0 | $ | 27.4 | $ | 13.5 | |||||||||
Page 11
Kemper Corporation Segment Operating Results (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Earned Premiums by Product: | ||||||||||||||||||||
Personal Automobile | $ | 303.3 | $ | 296.8 | $ | 288.5 | $ | 252.6 | $ | 189.8 | ||||||||||
Homeowners | 68.1 | 70.0 | 72.1 | 71.6 | 72.6 | |||||||||||||||
Other Personal Property and Casualty Insurance | 29.8 | 30.1 | 30.7 | 30.7 | 30.6 | |||||||||||||||
Commercial Automobile | 13.5 | 13.8 | 13.7 | 13.5 | 13.5 | |||||||||||||||
Life | 94.4 | 94.6 | 95.5 | 96.0 | 88.0 | |||||||||||||||
Accident and Health | 36.9 | 36.2 | 36.2 | 35.7 | 36.8 | |||||||||||||||
Total Earned Premiums | $ | 546.0 | $ | 541.5 | $ | 536.7 | $ | 500.1 | $ | 431.3 | ||||||||||
Net Investment Income by Segment: | ||||||||||||||||||||
Property & Casualty Insurance: | ||||||||||||||||||||
Equity Method Limited Liability Investments | $ | (3.9 | ) | $ | 4.0 | $ | 4.7 | $ | 3.0 | $ | 0.2 | |||||||||
All Other Net Investment Income | 15.8 | 17.6 | 13.6 | 15.6 | 14.6 | |||||||||||||||
Net Investment Income | 11.9 | 21.6 | 18.3 | 18.6 | 14.8 | |||||||||||||||
Life & Health Insurance: | ||||||||||||||||||||
Equity Method Limited Liability Investments | 0.1 | 2.5 | 3.0 | 0.9 | (1.0 | ) | ||||||||||||||
All Other Net Investment Income | 54.9 | 52.7 | 52.1 | 52.6 | 51.4 | |||||||||||||||
Net Investment Income | 55.0 | 55.2 | 55.1 | 53.5 | 50.4 | |||||||||||||||
Total Segment Net Investment Income | 66.9 | 76.8 | 73.4 | 72.1 | 65.2 | |||||||||||||||
Unallocated Net Investment Income: | ||||||||||||||||||||
Equity Method Limited Liability Investments | (0.5 | ) | 0.7 | 0.6 | 0.3 | 0.1 | ||||||||||||||
All Other Net Investment Income | 0.6 | 1.9 | 1.9 | 4.3 | 5.3 | |||||||||||||||
Unallocated Net Investment Income | 0.1 | 2.6 | 2.5 | 4.6 | 5.4 | |||||||||||||||
Net Investment Income | $ | 67.0 | $ | 79.4 | $ | 75.9 | $ | 76.7 | $ | 70.6 | ||||||||||
Page 12
Kemper Corporation Catastrophe Frequency and Severity (Dollars in Millions) (Unaudited) | |||||||||||||||||||||
Three Months Ended Mar 31, 2016 | |||||||||||||||||||||
Property & Casualty Insurance Segment | Life & Health Insurance Segment | Consolidated | |||||||||||||||||||
Number of Events | Losses and LAE | Number of Events | Losses and LAE | Number of Events | Losses and LAE | ||||||||||||||||
Range of Losses and LAE Per Event: | |||||||||||||||||||||
Below $5 | 12 | $ | 10.9 | 8 | $ | 1.7 | 12 | $ | 12.6 | ||||||||||||
$5 - $10 | — | — | — | — | — | — | |||||||||||||||
$10 - $15 | — | — | — | — | — | — | |||||||||||||||
$15 - $20 | — | — | — | — | — | — | |||||||||||||||
$20 - $25 | — | — | — | — | — | — | |||||||||||||||
Greater Than $25 | 1 | 26.6 | — | — | 1 | 26.6 | |||||||||||||||
Total | 13 | $ | 37.5 | 8 | $ | 1.7 | 13 | $ | 39.2 | ||||||||||||
Three Months Ended Mar 31, 2015 | |||||||||||||||||||||
Property & Casualty Insurance Segment | Life & Health Insurance Segment | Consolidated | |||||||||||||||||||
Number of Events | Losses and LAE | Number of Events | Losses and LAE | Number of Events | Losses and LAE | ||||||||||||||||
Range of Losses and LAE Per Event: | |||||||||||||||||||||
Below $5 | 9 | $ | 10.3 | 3 | $ | — | 9 | $ | 10.3 | ||||||||||||
$5 - $10 | — | — | — | — | — | — | |||||||||||||||
$10 - $15 | — | — | — | — | — | — | |||||||||||||||
$15 - $20 | — | — | — | — | — | — | |||||||||||||||
$20 - $25 | — | — | — | — | — | — | |||||||||||||||
Greater Than $25 | — | — | — | — | — | — | |||||||||||||||
Total | 9 | $ | 10.3 | 3 | $ | — | 9 | $ | 10.3 | ||||||||||||
Page 13
Kemper Corporation Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net Premiums Written | $ | 403.4 | $ | 374.7 | $ | 403.6 | $ | 348.2 | $ | 279.7 | ||||||||||
Earned Premiums | 396.2 | 392.1 | 386.1 | 349.4 | 287.6 | |||||||||||||||
Net Investment Income | 11.9 | 21.6 | 18.3 | 18.6 | 14.8 | |||||||||||||||
Other Income | 0.2 | 0.1 | 0.1 | 0.1 | 0.3 | |||||||||||||||
Total Revenues | 408.3 | 413.8 | 404.5 | 368.1 | 302.7 | |||||||||||||||
Incurred Losses and LAE related to: | ||||||||||||||||||||
Current Year: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 297.4 | 307.4 | 283.2 | 245.5 | 198.5 | |||||||||||||||
Catastrophe Losses and LAE | 37.5 | 14.1 | 4.7 | 35.4 | 10.3 | |||||||||||||||
Prior Years: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 4.7 | 2.3 | (0.9 | ) | (1.4 | ) | (5.0 | ) | ||||||||||||
Catastrophe Losses and LAE | (2.7 | ) | (1.4 | ) | (1.9 | ) | (2.4 | ) | (2.2 | ) | ||||||||||
Total Incurred Losses and LAE | 336.9 | 322.4 | 285.1 | 277.1 | 201.6 | |||||||||||||||
Insurance Expenses, Excluding Write-off of Long-lived Assets | 94.2 | 102.3 | 94.4 | 88.3 | 83.1 | |||||||||||||||
Write-off of Long-lived Asset2 | — | — | — | 11.1 | — | |||||||||||||||
Operating Profit (Loss) | (22.8 | ) | (10.9 | ) | 25.0 | (8.4 | ) | 18.0 | ||||||||||||
Income Tax Benefit (Expense) | 9.7 | 5.8 | (4.0 | ) | 5.8 | (4.6 | ) | |||||||||||||
Segment Net Operating Income (Loss) | $ | (13.1 | ) | $ | (5.1 | ) | $ | 21.0 | $ | (2.6 | ) | $ | 13.4 | |||||||
Ratios Based On Earned Premiums | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 75.0 | % | 78.4 | % | 73.3 | % | 70.3 | % | 69.0 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 9.5 | 3.6 | 1.2 | 10.1 | 3.6 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 1.2 | 0.6 | (0.2 | ) | (0.4 | ) | (1.7 | ) | ||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.7 | ) | (0.4 | ) | (0.5 | ) | (0.7 | ) | (0.8 | ) | ||||||||||
Total Incurred Loss and LAE Ratio | 85.0 | 82.2 | 73.8 | 79.3 | 70.1 | |||||||||||||||
Insurance Expense Ratio, Excluding Write-off of Long-lived Asset | 23.8 | 26.1 | 24.4 | 25.3 | 28.9 | |||||||||||||||
Impact on Ratio from Write-off of Long-lived Asset | — | — | — | 3.2 | — | |||||||||||||||
Combined Ratio | 108.8 | % | 108.3 | % | 98.2 | % | 107.8 | % | 99.0 | % | ||||||||||
Underlying Combined Ratio 1 | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 75.0 | % | 78.4 | % | 73.3 | % | 70.3 | % | 69.0 | % | ||||||||||
Insurance Expense Ratio, Excluding write-off of Long-lived Asset | 23.8 | 26.1 | 24.4 | 25.3 | 28.9 | |||||||||||||||
Impact on Ratio from Write-off of Long-lived Asset | — | — | — | 3.2 | — | |||||||||||||||
Underlying Combined Ratio | 98.8 | % | 104.5 | % | 97.7 | % | 98.8 | % | 97.9 | % | ||||||||||
Non-GAAP Measure Reconciliation | ||||||||||||||||||||
Underlying Combined Ratio | 98.8 | % | 104.5 | % | 97.7 | % | 98.8 | % | 97.9 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 9.5 | 3.6 | 1.2 | 10.1 | 3.6 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 1.2 | 0.6 | (0.2 | ) | (0.4 | ) | (1.7 | ) | ||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.7 | ) | (0.4 | ) | (0.5 | ) | (0.7 | ) | (0.8 | ) | ||||||||||
Combined Ratio as Reported | 108.8 | % | 108.3 | % | 98.2 | % | 107.8 | % | 99.0 | % | ||||||||||
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio. | ||||||||||||||||||||
2 The Write-off of Long-lived Assets has not been allocated to product lines. Accordingly, Results of Operations and Selected Financial Information presented on pages 16 to 22 of this Investor Supplement exclude the write-off. | ||||||||||||||||||||
Page 14
Kemper Corporation Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information (continued) (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Insurance Reserves: | ||||||||||||||||||||
Automobile | $ | 678.8 | $ | 656.3 | $ | 630.2 | $ | 631.8 | $ | 483.4 | ||||||||||
Homeowners | 115.4 | 98.9 | 103.1 | 119.4 | 108.1 | |||||||||||||||
Other Personal | 46.1 | 45.3 | 50.0 | 50.3 | 48.5 | |||||||||||||||
Insurance Reserves | $ | 840.3 | $ | 800.5 | $ | 783.3 | $ | 801.5 | $ | 640.0 | ||||||||||
Insurance Reserves: | ||||||||||||||||||||
Loss Reserves: | ||||||||||||||||||||
Case | $ | 563.3 | $ | 537.1 | $ | 532.1 | $ | 540.5 | $ | 426.8 | ||||||||||
Incurred but Not Reported | 157.9 | 147.6 | 135.9 | 142.8 | 124.1 | |||||||||||||||
Total Loss Reserves | 721.2 | 684.7 | 668.0 | 683.3 | 550.9 | |||||||||||||||
LAE Reserves | 119.1 | 115.8 | 115.3 | 118.2 | 89.1 | |||||||||||||||
Insurance Reserves | $ | 840.3 | $ | 800.5 | $ | 783.3 | $ | 801.5 | $ | 640.0 | ||||||||||
Page 15
Kemper Corporation Property & Casualty Insurance Segment Preferred Personal Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net Premiums Written | $ | 99.7 | $ | 102.4 | $ | 113.4 | $ | 112.2 | $ | 106.5 | ||||||||||
Earned Premiums | $ | 106.1 | $ | 109.0 | $ | 111.6 | $ | 113.4 | $ | 115.9 | ||||||||||
Net Investment Income | 3.4 | 6.8 | 6.2 | 6.7 | 5.6 | |||||||||||||||
Other Income | — | — | — | — | 0.2 | |||||||||||||||
Total Revenues | 109.5 | 115.8 | 117.8 | 120.1 | 121.7 | |||||||||||||||
Incurred Losses and LAE related to: | ||||||||||||||||||||
Current Year: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 73.3 | 83.1 | 76.5 | 78.1 | 81.8 | |||||||||||||||
Catastrophe Losses and LAE | 4.9 | 0.4 | 0.1 | 2.3 | 0.2 | |||||||||||||||
Prior Years: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 1.9 | (1.1 | ) | (2.7 | ) | (4.0 | ) | (7.2 | ) | |||||||||||
Catastrophe Losses and LAE | (0.2 | ) | 0.1 | (0.1 | ) | (0.1 | ) | (0.1 | ) | |||||||||||
Total Incurred Losses and LAE | 79.9 | 82.5 | 73.8 | 76.3 | 74.7 | |||||||||||||||
Insurance Expenses | 32.0 | 32.6 | 33.6 | 33.1 | 34.4 | |||||||||||||||
Operating Profit (Loss) | (2.4 | ) | 0.7 | 10.4 | 10.7 | 12.6 | ||||||||||||||
Income Tax Benefit (Expense) | 1.4 | 0.3 | (3.1 | ) | (2.9 | ) | (3.7 | ) | ||||||||||||
Segment Net Operating Income (Loss) | $ | (1.0 | ) | $ | 1.0 | $ | 7.3 | $ | 7.8 | $ | 8.9 | |||||||||
Ratios Based On Earned Premiums | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 69.1 | % | 76.2 | % | 68.5 | % | 68.9 | % | 70.6 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 4.6 | 0.4 | 0.1 | 2.0 | 0.2 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 1.8 | (1.0 | ) | (2.4 | ) | (3.5 | ) | (6.2 | ) | |||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.2 | ) | 0.1 | (0.1 | ) | (0.1 | ) | (0.1 | ) | |||||||||||
Total Incurred Loss and LAE Ratio | 75.3 | 75.7 | 66.1 | 67.3 | 64.5 | |||||||||||||||
Insurance Expense Ratio | 30.2 | 29.9 | 30.1 | 29.2 | 29.7 | |||||||||||||||
Combined Ratio | 105.5 | % | 105.6 | % | 96.2 | % | 96.5 | % | 94.2 | % | ||||||||||
Underlying Combined Ratio 1 | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 69.1 | % | 76.2 | % | 68.5 | % | 68.9 | % | 70.6 | % | ||||||||||
Insurance Expense Ratio | 30.2 | 29.9 | 30.1 | 29.2 | 29.7 | |||||||||||||||
Underlying Combined Ratio | 99.3 | % | 106.1 | % | 98.6 | % | 98.1 | % | 100.3 | % | ||||||||||
Non-GAAP Measure Reconciliation | ||||||||||||||||||||
Underlying Combined Ratio | 99.3 | % | 106.1 | % | 98.6 | % | 98.1 | % | 100.3 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 4.6 | 0.4 | 0.1 | 2.0 | 0.2 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 1.8 | (1.0 | ) | (2.4 | ) | (3.5 | ) | (6.2 | ) | |||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.2 | ) | 0.1 | (0.1 | ) | (0.1 | ) | (0.1 | ) | |||||||||||
Combined Ratio as Reported | 105.5 | % | 105.6 | % | 96.2 | % | 96.5 | % | 94.2 | % | ||||||||||
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio. | ||||||||||||||||||||
Page 16
Kemper Corporation Property & Casualty Insurance Segment Non-standard Personal Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net Premiums Written | $ | 219.5 | $ | 185.8 | $ | 189.3 | $ | 135.3 | $ | 85.6 | ||||||||||
Earned Premiums | $ | 197.2 | $ | 187.8 | $ | 176.9 | $ | 139.2 | $ | 73.9 | ||||||||||
Net Investment Income | 4.0 | 5.8 | 4.4 | 3.8 | 2.6 | |||||||||||||||
Other Income | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||||||||
Total Revenues | 201.3 | 193.7 | 181.4 | 143.1 | 76.6 | |||||||||||||||
Incurred Losses and LAE related to: | ||||||||||||||||||||
Current Year: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 173.3 | 174.3 | 151.4 | 115.9 | 59.3 | |||||||||||||||
Catastrophe Losses and LAE | 1.7 | 0.5 | — | 3.0 | 0.2 | |||||||||||||||
Prior Years: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 7.9 | 4.8 | 3.6 | 2.9 | 2.2 | |||||||||||||||
Catastrophe Losses and LAE | — | — | — | (0.1 | ) | — | ||||||||||||||
Total Incurred Losses and LAE | 182.9 | 179.6 | 155.0 | 121.7 | 61.7 | |||||||||||||||
Insurance Expenses | 34.7 | 40.2 | 31.2 | 25.5 | 18.5 | |||||||||||||||
Operating Loss | (16.3 | ) | (26.1 | ) | (4.8 | ) | (4.1 | ) | (3.6 | ) | ||||||||||
Income Tax Benefit | 6.2 | 9.8 | 5.1 | 2.5 | 1.5 | |||||||||||||||
Segment Net Operating Income (Loss) | $ | (10.1 | ) | $ | (16.3 | ) | $ | 0.3 | $ | (1.6 | ) | $ | (2.1 | ) | ||||||
Ratios Based On Earned Premiums | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 87.8 | % | 92.7 | % | 85.6 | % | 83.2 | % | 80.2 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 0.9 | 0.3 | — | 2.2 | 0.3 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 4.0 | 2.6 | 2.0 | 2.1 | 3.0 | |||||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | — | — | — | (0.1 | ) | — | ||||||||||||||
Total Incurred Loss and LAE Ratio | 92.7 | 95.6 | 87.6 | 87.4 | 83.5 | |||||||||||||||
Insurance Expense Ratio | 17.6 | 21.4 | 17.6 | 18.3 | 25.0 | |||||||||||||||
Combined Ratio | 110.3 | % | 117.0 | % | 105.2 | % | 105.7 | % | 108.5 | % | ||||||||||
Underlying Combined Ratio 1 | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 87.8 | % | 92.7 | % | 85.6 | % | 83.2 | % | 80.2 | % | ||||||||||
Insurance Expense Ratio | 17.6 | 21.4 | 17.6 | 18.3 | 25.0 | |||||||||||||||
Underlying Combined Ratio | 105.4 | % | 114.1 | % | 103.2 | % | 101.5 | % | 105.2 | % | ||||||||||
Non-GAAP Measure Reconciliation | ||||||||||||||||||||
Underlying Combined Ratio | 105.4 | % | 114.1 | % | 103.2 | % | 101.5 | % | 105.2 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 0.9 | 0.3 | — | 2.2 | 0.3 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 4.0 | 2.6 | 2.0 | 2.1 | 3.0 | |||||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | — | — | — | (0.1 | ) | — | ||||||||||||||
Combined Ratio as Reported | 110.3 | % | 117.0 | % | 105.2 | % | 105.7 | % | 108.5 | % | ||||||||||
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio. | ||||||||||||||||||||
Page 17
Kemper Corporation Property & Casualty Insurance Segment Total Personal Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net Premiums Written | $ | 319.2 | $ | 288.2 | $ | 302.7 | $ | 247.5 | $ | 192.1 | ||||||||||
Earned Premiums | $ | 303.3 | $ | 296.8 | $ | 288.5 | $ | 252.6 | $ | 189.8 | ||||||||||
Net Investment Income | 7.4 | 12.6 | 10.6 | 10.5 | 8.2 | |||||||||||||||
Other Income | 0.1 | 0.1 | 0.1 | 0.1 | 0.3 | |||||||||||||||
Total Revenues | 310.8 | 309.5 | 299.2 | 263.2 | 198.3 | |||||||||||||||
Incurred Losses and LAE related to: | ||||||||||||||||||||
Current Year: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 246.6 | 257.4 | 227.9 | 194.0 | 141.1 | |||||||||||||||
Catastrophe Losses and LAE | 6.6 | 0.9 | 0.1 | 5.3 | 0.4 | |||||||||||||||
Prior Years: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 9.8 | 3.7 | 0.9 | (1.1 | ) | (5.0 | ) | |||||||||||||
Catastrophe Losses and LAE | (0.2 | ) | 0.1 | (0.1 | ) | (0.2 | ) | (0.1 | ) | |||||||||||
Total Incurred Losses and LAE | 262.8 | 262.1 | 228.8 | 198.0 | 136.4 | |||||||||||||||
Insurance Expenses | 66.7 | 72.8 | 64.8 | 58.6 | 52.9 | |||||||||||||||
Operating Profit (Loss) | (18.7 | ) | (25.4 | ) | 5.6 | 6.6 | 9.0 | |||||||||||||
Income Tax Benefit (Expense) | 7.6 | 10.1 | 2.0 | (0.4 | ) | (2.2 | ) | |||||||||||||
Segment Net Operating Income (Loss) | $ | (11.1 | ) | $ | (15.3 | ) | $ | 7.6 | $ | 6.2 | $ | 6.8 | ||||||||
Ratios Based On Earned Premiums | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 81.3 | % | 86.8 | % | 79.0 | % | 76.8 | % | 74.4 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 2.2 | 0.3 | — | 2.1 | 0.2 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 3.2 | 1.2 | 0.3 | (0.4 | ) | (2.6 | ) | |||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.1 | ) | — | — | (0.1 | ) | (0.1 | ) | ||||||||||||
Total Incurred Loss and LAE Ratio | 86.6 | 88.3 | 79.3 | 78.4 | 71.9 | |||||||||||||||
Insurance Expense Ratio | 22.0 | 24.5 | 22.5 | 23.2 | 27.9 | |||||||||||||||
Combined Ratio | 108.6 | % | 112.8 | % | 101.8 | % | 101.6 | % | 99.8 | % | ||||||||||
Underlying Combined Ratio 1 | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 81.3 | % | 86.8 | % | 79.0 | % | 76.8 | % | 74.4 | % | ||||||||||
Insurance Expense Ratio | 22.0 | 24.5 | 22.5 | 23.2 | 27.9 | |||||||||||||||
Underlying Combined Ratio | 103.3 | % | 111.3 | % | 101.5 | % | 100.0 | % | 102.3 | % | ||||||||||
Non-GAAP Measure Reconciliation | ||||||||||||||||||||
Underlying Combined Ratio | 103.3 | % | 111.3 | % | 101.5 | % | 100.0 | % | 102.3 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 2.2 | 0.3 | — | 2.1 | 0.2 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 3.2 | 1.2 | 0.3 | (0.4 | ) | (2.6 | ) | |||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.1 | ) | — | — | (0.1 | ) | (0.1 | ) | ||||||||||||
Combined Ratio as Reported | 108.6 | % | 112.8 | % | 101.8 | % | 101.6 | % | 99.8 | % | ||||||||||
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio. | ||||||||||||||||||||
Page 18
Kemper Corporation Property & Casualty Insurance Segment Commercial Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net Premiums Written | $ | 14.2 | $ | 12.1 | $ | 13.5 | $ | 14.5 | $ | 14.0 | ||||||||||
Earned Premiums | $ | 13.5 | $ | 13.8 | $ | 13.7 | $ | 13.5 | $ | 13.5 | ||||||||||
Net Investment Income | 0.7 | 1.4 | 1.2 | 1.1 | 1.0 | |||||||||||||||
Other Income | 0.1 | — | — | — | — | |||||||||||||||
Total Revenues | 14.3 | 15.2 | 14.9 | 14.6 | 14.5 | |||||||||||||||
Incurred Losses and LAE related to: | ||||||||||||||||||||
Current Year: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 10.9 | 11.6 | 13.3 | 10.0 | 10.8 | |||||||||||||||
Catastrophe Losses and LAE | 0.1 | — | — | 0.2 | — | |||||||||||||||
Prior Years: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | (2.4 | ) | 1.1 | 1.5 | (0.6 | ) | (0.2 | ) | ||||||||||||
Catastrophe Losses and LAE | — | — | — | — | — | |||||||||||||||
Total Incurred Losses and LAE | 8.6 | 12.7 | 14.8 | 9.6 | 10.6 | |||||||||||||||
Insurance Expenses | 3.1 | 3.6 | 3.7 | 3.6 | 3.8 | |||||||||||||||
Operating Profit (Loss) | 2.6 | (1.1 | ) | (3.6 | ) | 1.4 | 0.1 | |||||||||||||
Income Tax Benefit (Expense) | (0.8 | ) | 0.5 | 1.3 | (0.4 | ) | 0.1 | |||||||||||||
Segment Net Operating Income (Loss) | $ | 1.8 | $ | (0.6 | ) | $ | (2.3 | ) | $ | 1.0 | $ | 0.2 | ||||||||
Ratios Based On Earned Premiums | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 80.8 | % | 84.0 | % | 97.1 | % | 74.0 | % | 80.0 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 0.7 | — | — | 1.5 | — | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | (17.8 | ) | 8.0 | 10.9 | (4.4 | ) | (1.5 | ) | ||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | — | — | — | — | — | |||||||||||||||
Total Incurred Loss and LAE Ratio | 63.7 | 92.0 | 108.0 | 71.1 | 78.5 | |||||||||||||||
Insurance Expense Ratio | 23.0 | 26.1 | 27.0 | 26.7 | 28.1 | |||||||||||||||
Combined Ratio | 86.7 | % | 118.1 | % | 135.0 | % | 97.8 | % | 106.6 | % | ||||||||||
Underlying Combined Ratio 1 | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 80.8 | % | 84.0 | % | 97.1 | % | 74.0 | % | 80.0 | % | ||||||||||
Insurance Expense Ratio | 23.0 | 26.1 | 27.0 | 26.7 | 28.1 | |||||||||||||||
Underlying Combined Ratio | 103.8 | % | 110.1 | % | 124.1 | % | 100.7 | % | 108.1 | % | ||||||||||
Non-GAAP Measure Reconciliation | ||||||||||||||||||||
Underlying Combined Ratio | 103.8 | % | 110.1 | % | 124.1 | % | 100.7 | % | 108.1 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 0.7 | — | — | 1.5 | — | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | (17.8 | ) | 8.0 | 10.9 | (4.4 | ) | (1.5 | ) | ||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | — | — | — | — | — | |||||||||||||||
Combined Ratio as Reported | 86.7 | % | 118.1 | % | 135.0 | % | 97.8 | % | 106.6 | % | ||||||||||
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio. | ||||||||||||||||||||
Page 19
Kemper Corporation Property & Casualty Insurance Segment Total Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net Premiums Written | $ | 333.4 | $ | 300.3 | $ | 316.2 | $ | 262.0 | $ | 206.1 | ||||||||||
Earned Premiums | $ | 316.8 | $ | 310.6 | $ | 302.2 | $ | 266.1 | $ | 203.3 | ||||||||||
Net Investment Income | 8.1 | 14.0 | 11.8 | 11.6 | 9.2 | |||||||||||||||
Other Income | 0.2 | 0.1 | 0.1 | 0.1 | 0.3 | |||||||||||||||
Total Revenues | 325.1 | 324.7 | 314.1 | 277.8 | 212.8 | |||||||||||||||
Incurred Losses and LAE related to: | ||||||||||||||||||||
Current Year: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 257.5 | 269.0 | 241.2 | 204.0 | 151.9 | |||||||||||||||
Catastrophe Losses and LAE | 6.7 | 0.9 | 0.1 | 5.5 | 0.4 | |||||||||||||||
Prior Years: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 7.4 | 4.8 | 2.4 | (1.7 | ) | (5.2 | ) | |||||||||||||
Catastrophe Losses and LAE | (0.2 | ) | 0.1 | (0.1 | ) | (0.2 | ) | (0.1 | ) | |||||||||||
Total Incurred Losses and LAE | 271.4 | 274.8 | 243.6 | 207.6 | 147.0 | |||||||||||||||
Insurance Expenses | 69.8 | 76.4 | 68.5 | 62.2 | 56.7 | |||||||||||||||
Operating Profit (Loss) | (16.1 | ) | (26.5 | ) | 2.0 | 8.0 | 9.1 | |||||||||||||
Income Tax Benefit (Expense) | 6.8 | 10.6 | 3.3 | (0.8 | ) | (2.1 | ) | |||||||||||||
Segment Net Operating Income (Loss) | $ | (9.3 | ) | $ | (15.9 | ) | $ | 5.3 | $ | 7.2 | $ | 7.0 | ||||||||
Ratios Based On Earned Premiums | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 81.4 | % | 86.7 | % | 79.8 | % | 76.6 | % | 74.7 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 2.1 | 0.3 | — | 2.1 | 0.2 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 2.3 | 1.5 | 0.8 | (0.6 | ) | (2.6 | ) | |||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.1 | ) | — | — | (0.1 | ) | — | |||||||||||||
Total Incurred Loss and LAE Ratio | 85.7 | 88.5 | 80.6 | 78.0 | 72.3 | |||||||||||||||
Insurance Expense Ratio | 22.0 | 24.6 | 22.7 | 23.4 | 27.9 | |||||||||||||||
Combined Ratio | 107.7 | % | 113.1 | % | 103.3 | % | 101.4 | % | 100.2 | % | ||||||||||
Underlying Combined Ratio 1 | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 81.4 | % | 86.7 | % | 79.8 | % | 76.6 | % | 74.7 | % | ||||||||||
Insurance Expense Ratio | 22.0 | 24.6 | 22.7 | 23.4 | 27.9 | |||||||||||||||
Underlying Combined Ratio | 103.4 | % | 111.3 | % | 102.5 | % | 100.0 | % | 102.6 | % | ||||||||||
Non-GAAP Measure Reconciliation | ||||||||||||||||||||
Underlying Combined Ratio | 103.4 | % | 111.3 | % | 102.5 | % | 100.0 | % | 102.6 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 2.1 | 0.3 | — | 2.1 | 0.2 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | 2.3 | 1.5 | 0.8 | (0.6 | ) | (2.6 | ) | |||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.1 | ) | — | — | (0.1 | ) | — | |||||||||||||
Combined Ratio as Reported | 107.7 | % | 113.1 | % | 103.3 | % | 101.4 | % | 100.2 | % | ||||||||||
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio. | ||||||||||||||||||||
Page 20
Kemper Corporation Property & Casualty Insurance Segment Homeowners Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net Premiums Written | $ | 59.9 | $ | 63.5 | $ | 75.2 | $ | 74.2 | $ | 63.1 | ||||||||||
Earned Premiums | $ | 68.1 | $ | 70.0 | $ | 72.1 | $ | 71.6 | $ | 72.6 | ||||||||||
Net Investment Income | 3.2 | 6.3 | 5.5 | 5.9 | 4.8 | |||||||||||||||
Other Income | — | — | — | — | — | |||||||||||||||
Total Revenues | 71.3 | 76.3 | 77.6 | 77.5 | 77.4 | |||||||||||||||
Incurred Losses and LAE related to: | ||||||||||||||||||||
Current Year: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 35.2 | 32.5 | 36.3 | 36.5 | 39.8 | |||||||||||||||
Catastrophe Losses and LAE | 29.9 | 12.6 | 4.8 | 28.4 | 9.6 | |||||||||||||||
Prior Years: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | (2.7 | ) | (0.5 | ) | (2.5 | ) | 0.1 | (0.4 | ) | |||||||||||
Catastrophe Losses and LAE | (2.4 | ) | (1.5 | ) | (1.7 | ) | (2.1 | ) | (2.2 | ) | ||||||||||
Total Incurred Losses and LAE | 60.0 | 43.1 | 36.9 | 62.9 | 46.8 | |||||||||||||||
Insurance Expenses | 21.3 | 22.3 | 22.4 | 22.9 | 23.0 | |||||||||||||||
Operating Profit (Loss) | (10.0 | ) | 10.9 | 18.3 | (8.3 | ) | 7.6 | |||||||||||||
Income Tax Benefit (Expense) | 4.0 | (3.3 | ) | (5.8 | ) | 3.6 | (2.1 | ) | ||||||||||||
Segment Net Operating Income (Loss) | $ | (6.0 | ) | $ | 7.6 | $ | 12.5 | $ | (4.7 | ) | $ | 5.5 | ||||||||
Ratios Based On Earned Premiums | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 51.7 | % | 46.4 | % | 50.4 | % | 50.9 | % | 54.9 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 43.9 | 18.0 | 6.7 | 39.7 | 13.2 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | (4.0 | ) | (0.7 | ) | (3.5 | ) | 0.1 | (0.6 | ) | |||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (3.5 | ) | (2.1 | ) | (2.4 | ) | (2.9 | ) | (3.0 | ) | ||||||||||
Total Incurred Loss and LAE Ratio | 88.1 | 61.6 | 51.2 | 87.8 | 64.5 | |||||||||||||||
Insurance Expense Ratio | 31.3 | 31.9 | 31.1 | 32.0 | 31.7 | |||||||||||||||
Combined Ratio | 119.4 | % | 93.5 | % | 82.3 | % | 119.8 | % | 96.2 | % | ||||||||||
Underlying Combined Ratio 1 | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 51.7 | % | 46.4 | % | 50.4 | % | 50.9 | % | 54.9 | % | ||||||||||
Insurance Expense Ratio | 31.3 | 31.9 | 31.1 | 32.0 | 31.7 | |||||||||||||||
Underlying Combined Ratio | 83.0 | % | 78.3 | % | 81.5 | % | 82.9 | % | 86.6 | % | ||||||||||
Non-GAAP Measure Reconciliation | ||||||||||||||||||||
Underlying Combined Ratio | 83.0 | % | 78.3 | % | 81.5 | % | 82.9 | % | 86.6 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 43.9 | 18.0 | 6.7 | 39.7 | 13.2 | |||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | (4.0 | ) | (0.7 | ) | (3.5 | ) | 0.1 | (0.6 | ) | |||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (3.5 | ) | (2.1 | ) | (2.4 | ) | (2.9 | ) | (3.0 | ) | ||||||||||
Combined Ratio as Reported | 119.4 | % | 93.5 | % | 82.3 | % | 119.8 | % | 96.2 | % | ||||||||||
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio. | ||||||||||||||||||||
Page 21
Kemper Corporation Property & Casualty Insurance Segment Other Personal Lines - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net Premiums Written | $ | 10.1 | $ | 10.9 | $ | 12.2 | $ | 12.0 | $ | 10.5 | ||||||||||
Earned Premiums | $ | 11.3 | $ | 11.5 | $ | 11.8 | $ | 11.7 | $ | 11.7 | ||||||||||
Net Investment Income | 0.6 | 1.3 | 1.0 | 1.1 | 0.8 | |||||||||||||||
Other Income | — | — | — | — | — | |||||||||||||||
Total Revenues | 11.9 | 12.8 | 12.8 | 12.8 | 12.5 | |||||||||||||||
Incurred Losses and LAE related to: | ||||||||||||||||||||
Current Year: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | 4.7 | 5.9 | 5.7 | 5.0 | 6.8 | |||||||||||||||
Catastrophe Losses and LAE | 0.9 | 0.6 | (0.2 | ) | 1.5 | 0.3 | ||||||||||||||
Prior Years: | ||||||||||||||||||||
Non-catastrophe Losses and LAE | — | (2.0 | ) | (0.8 | ) | 0.2 | 0.6 | |||||||||||||
Catastrophe Losses and LAE | (0.1 | ) | — | (0.1 | ) | (0.1 | ) | 0.1 | ||||||||||||
Total Incurred Losses and LAE | 5.5 | 4.5 | 4.6 | 6.6 | 7.8 | |||||||||||||||
Insurance Expenses | 3.1 | 3.6 | 3.5 | 3.2 | 3.4 | |||||||||||||||
Operating Profit | 3.3 | 4.7 | 4.7 | 3.0 | 1.3 | |||||||||||||||
Income Tax Expense | (1.1 | ) | (1.5 | ) | (1.5 | ) | (0.9 | ) | (0.4 | ) | ||||||||||
Segment Net Operating Income | $ | 2.2 | $ | 3.2 | $ | 3.2 | $ | 2.1 | $ | 0.9 | ||||||||||
Ratios Based On Earned Premiums | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 41.6 | % | 51.3 | % | 48.3 | % | 42.8 | % | 58.1 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 8.0 | 5.2 | (1.7 | ) | 12.8 | 2.6 | ||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | — | (17.4 | ) | (6.8 | ) | 1.7 | 5.1 | |||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.9 | ) | — | (0.8 | ) | (0.9 | ) | 0.9 | ||||||||||||
Total Incurred Loss and LAE Ratio | 48.7 | 39.1 | 39.0 | 56.4 | 66.7 | |||||||||||||||
Insurance Expense Ratio | 27.4 | 31.3 | 29.7 | 27.4 | 29.1 | |||||||||||||||
Combined Ratio | 76.1 | % | 70.4 | % | 68.7 | % | 83.8 | % | 95.8 | % | ||||||||||
Underlying Combined Ratio 1 | ||||||||||||||||||||
Current Year Non-catastrophe Losses and LAE Ratio | 41.6 | % | 51.3 | % | 48.3 | % | 42.8 | % | 58.1 | % | ||||||||||
Insurance Expense Ratio | 27.4 | 31.3 | 29.7 | 27.4 | 29.1 | |||||||||||||||
Underlying Combined Ratio | 69.0 | % | 82.6 | % | 78.0 | % | 70.2 | % | 87.2 | % | ||||||||||
Non-GAAP Measure Reconciliation | ||||||||||||||||||||
Underlying Combined Ratio | 69.0 | % | 82.6 | % | 78.0 | % | 70.2 | % | 87.2 | % | ||||||||||
Current Year Catastrophe Losses and LAE Ratio | 8.0 | 5.2 | (1.7 | ) | 12.8 | 2.6 | ||||||||||||||
Prior Years Non-catastrophe Losses and LAE Ratio | — | (17.4 | ) | (6.8 | ) | 1.7 | 5.1 | |||||||||||||
Prior Years Catastrophe Losses and LAE Ratio | (0.9 | ) | — | (0.8 | ) | (0.9 | ) | 0.9 | ||||||||||||
Combined Ratio as Reported | 76.1 | % | 70.4 | % | 68.7 | % | 83.8 | % | 95.8 | % | ||||||||||
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio. | ||||||||||||||||||||
Page 22
Kemper Corporation Life & Health Insurance Segment - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Earned Premiums: | ||||||||||||||||||||
Life | $ | 94.4 | $ | 94.6 | $ | 95.5 | $ | 96.0 | $ | 88.0 | ||||||||||
Accident and Health | 36.9 | 36.2 | 36.2 | 35.7 | 36.8 | |||||||||||||||
Property | 18.5 | 18.6 | 18.9 | 19.0 | 18.9 | |||||||||||||||
Total Earned Premiums | 149.8 | 149.4 | 150.6 | 150.7 | 143.7 | |||||||||||||||
Net Investment Income | 55.0 | 55.2 | 55.1 | 53.5 | 50.4 | |||||||||||||||
Other Income | 0.6 | 0.7 | 0.7 | 0.2 | 0.8 | |||||||||||||||
Total Revenues | 205.4 | 205.3 | 206.4 | 204.4 | 194.9 | |||||||||||||||
Policyholders’ Benefits and Incurred Losses and LAE | 99.3 | 93.5 | 93.7 | 98.0 | 96.1 | |||||||||||||||
Insurance Expenses | 75.1 | 84.5 | 77.3 | 84.2 | 74.0 | |||||||||||||||
Operating Profit | 31.0 | 27.3 | 35.4 | 22.2 | 24.8 | |||||||||||||||
Income Tax Expense | (10.7 | ) | (9.5 | ) | (11.9 | ) | (7.9 | ) | (8.7 | ) | ||||||||||
Segment Net Operating Income | $ | 20.3 | $ | 17.8 | $ | 23.5 | $ | 14.3 | $ | 16.1 | ||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Insurance Reserves: | ||||||||||||||||||||
Future Policyholder Benefits | $ | 3,294.4 | $ | 3,278.4 | $ | 3,267.3 | $ | 3,255.7 | $ | 3,238.9 | ||||||||||
Incurred Losses and LAE Reserves: | ||||||||||||||||||||
Life | 42.1 | 41.2 | 39.4 | 37.5 | 40.2 | |||||||||||||||
Accident and Health | 21.9 | 21.4 | 21.1 | 19.6 | 20.4 | |||||||||||||||
Property | 6.0 | 5.2 | 4.4 | 5.2 | 3.7 | |||||||||||||||
Total Incurred Losses and LAE Reserves | 70.0 | 67.8 | 64.9 | 62.3 | 64.3 | |||||||||||||||
Insurance Reserves | $ | 3,364.4 | $ | 3,346.2 | $ | 3,332.2 | $ | 3,318.0 | $ | 3,303.2 | ||||||||||
Page 23
Kemper Corporation Details of Investment Performance (Dollars in Millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | ||||||||||||||||
Net Investment Income | ||||||||||||||||||||
Interest on Fixed Income Securities | $ | 60.0 | $ | 60.0 | $ | 58.4 | $ | 58.3 | $ | 59.5 | ||||||||||
Dividends on Equity Securities Excluding Alternative Investments | 2.8 | 3.5 | 3.4 | 4.5 | 3.4 | |||||||||||||||
Alternative Investments: | ||||||||||||||||||||
Equity Method Limited Liability Investments | (4.3 | ) | 7.2 | 8.3 | 4.2 | (0.7 | ) | |||||||||||||
Fair Value Option Investments | (2.6 | ) | (1.6 | ) | (0.9 | ) | 1.8 | 0.9 | ||||||||||||
Limited Liability Investments Included in Equity Securities | 7.3 | 6.1 | 3.0 | 4.2 | 4.3 | |||||||||||||||
Total Alternative Investments | 0.4 | 11.7 | 10.4 | 10.2 | 4.5 | |||||||||||||||
Short-term Investments | 0.1 | 0.1 | 0.2 | 0.1 | — | |||||||||||||||
Real Estate | 3.0 | 3.0 | 3.0 | 3.0 | 2.9 | |||||||||||||||
Loans to Policyholders | 5.4 | 5.4 | 5.3 | 5.1 | 5.3 | |||||||||||||||
Total Investment Income | 71.7 | 83.7 | 80.7 | 81.2 | 75.6 | |||||||||||||||
Investment Expenses: | ||||||||||||||||||||
Real Estate | 2.7 | 2.8 | 2.9 | 2.9 | 2.7 | |||||||||||||||
Other Investment Expenses | 2.0 | 1.5 | 1.9 | 1.6 | 2.3 | |||||||||||||||
Total Investment Expenses | 4.7 | 4.3 | 4.8 | 4.5 | 5.0 | |||||||||||||||
Net Investment Income | $ | 67.0 | $ | 79.4 | $ | 75.9 | $ | 76.7 | $ | 70.6 | ||||||||||
Net Realized Gains on Sales of Investments | ||||||||||||||||||||
Fixed Maturities: | ||||||||||||||||||||
Gains on Sales | $ | 7.1 | $ | 6.6 | $ | 3.6 | $ | 3.9 | $ | 2.0 | ||||||||||
Losses on Sales | (0.3 | ) | (0.4 | ) | (0.1 | ) | (0.5 | ) | (0.1 | ) | ||||||||||
Equity Securities: | ||||||||||||||||||||
Gains on Sales | — | 3.5 | 2.8 | 31.4 | 1.5 | |||||||||||||||
Losses on Sales | — | (0.2 | ) | (0.7 | ) | (0.7 | ) | — | ||||||||||||
Real Estate: | ||||||||||||||||||||
Losses on Sales | — | (0.2 | ) | — | — | — | ||||||||||||||
Other Investments: | ||||||||||||||||||||
Losses on Sales | — | 0.1 | — | (0.1 | ) | — | ||||||||||||||
Trading Securities Net Gains (Losses) | — | — | (0.3 | ) | — | — | ||||||||||||||
Net Realized Gains on Sales of Investments | $ | 6.8 | $ | 9.4 | $ | 5.3 | $ | 34.0 | $ | 3.4 | ||||||||||
Net Impairment Losses Recognized in Earnings | ||||||||||||||||||||
Fixed Maturities | $ | (7.8 | ) | $ | (6.3 | ) | $ | (1.2 | ) | $ | (1.6 | ) | $ | (2.4 | ) | |||||
Equity Securities | (1.5 | ) | (8.4 | ) | (2.1 | ) | (0.6 | ) | (4.6 | ) | ||||||||||
Net Impairment Losses Recognized in Earnings | $ | (9.3 | ) | $ | (14.7 | ) | $ | (3.3 | ) | $ | (2.2 | ) | $ | (7.0 | ) | |||||
Page 24
Kemper Corporation Details of Invested Assets (Dollars in Millions) (Unaudited) | |||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |||||||||||||||||||
Carrying Value | Percent of Total1 | Carrying Value | Percent of Total1 | Carrying Value | Percent of Total1 | ||||||||||||||||
Fixed Maturities Reported at Fair Value: | |||||||||||||||||||||
U.S. Government and Government Agencies and Authorities | $ | 321.2 | 4.9 | % | $ | 320.6 | 5.0 | % | $ | 345.5 | 5.4 | % | |||||||||
States and Political Subdivisions | 1,610.0 | 24.5 | 1,622.6 | 25.2 | 1,477.1 | 22.9 | |||||||||||||||
Corporate Securities: | |||||||||||||||||||||
Bonds and Notes | 2,894.8 | 44.0 | 2,812.8 | 43.7 | 2,878.5 | 44.7 | |||||||||||||||
Redeemable Preferred Stocks | 3.3 | 0.1 | 3.8 | 0.1 | 6.7 | 0.1 | |||||||||||||||
Collaterized Loan Obligations | 83.2 | 1.3 | 87.3 | 1.4 | 64.4 | 1.0 | |||||||||||||||
Other Mortgage- and Asset-backed | 4.9 | 0.1 | 5.2 | 0.1 | 5.4 | 0.1 | |||||||||||||||
Subtotal Fixed Maturities Reported at Fair Value | 4,917.4 | 74.7 | 4,852.3 | 75.5 | 4,777.6 | 74.2 | |||||||||||||||
Equity Securities Reported at Fair Value: | |||||||||||||||||||||
Preferred Stocks | 103.2 | 1.6 | 103.9 | 1.6 | 109.5 | 1.7 | |||||||||||||||
Common Stocks | 43.5 | 0.7 | 36.7 | 0.6 | 133.8 | 2.1 | |||||||||||||||
Other Equity Interests: | |||||||||||||||||||||
Exchange Traded Funds | 151.2 | 2.3 | 177.1 | 2.8 | 202.7 | 3.1 | |||||||||||||||
Limited Liability Companies and Limited Partnerships | 203.4 | 3.1 | 205.5 | 3.2 | 186.2 | 2.9 | |||||||||||||||
Subtotal Equity Securities Reported at Fair Value | 501.3 | 7.6 | 523.2 | 8.1 | 632.2 | 9.8 | |||||||||||||||
Equity Method Limited Liability Investments | 190.5 | 2.9 | 190.6 | 3.0 | 184.8 | 2.9 | |||||||||||||||
Fair Value Option Investments | 161.9 | 2.5 | 164.5 | 2.6 | 53.3 | 0.8 | |||||||||||||||
Short-term Investments at Cost which Approximates Fair Value | 367.4 | 5.6 | 255.7 | 4.0 | 342.2 | 5.3 | |||||||||||||||
Other Investments: | |||||||||||||||||||||
Loans to Policyholders at Unpaid Principal | 289.4 | 4.4 | 288.4 | 4.5 | 283.4 | 4.4 | |||||||||||||||
Real Estate at Depreciated Cost | 149.4 | 2.3 | 149.8 | 2.3 | 160.9 | 2.5 | |||||||||||||||
Trading Securities at Fair Value | 4.7 | 0.1 | 4.7 | 0.1 | 4.9 | 0.1 | |||||||||||||||
Other | 0.3 | — | 0.3 | — | 0.4 | — | |||||||||||||||
Subtotal Other Investments | 443.8 | 6.8 | 443.2 | 6.9 | 449.6 | 7.0 | |||||||||||||||
Total Investments | $ | 6,582.3 | 100.0 | % | $ | 6,429.5 | 100.0 | % | $ | 6,439.7 | 100.0 | % | |||||||||
S&P Equivalent Rating for Fixed Maturities | |||||||||||||||||||||
AAA, AA, A | $ | 3,227.3 | 65.6 | % | $ | 3,222.5 | 66.4 | % | $ | 3,249.3 | 68.0 | % | |||||||||
BBB | 1,198.0 | 24.4 | 1,149.0 | 23.7 | 1,156.4 | 24.2 | |||||||||||||||
BB, B | 230.5 | 4.7 | 222.4 | 4.6 | 166.7 | 3.5 | |||||||||||||||
CCC or Lower | 261.6 | 5.3 | 258.4 | 5.3 | 205.2 | 4.3 | |||||||||||||||
Total Investments in Fixed Maturities | $ | 4,917.4 | 100.0 | % | $ | 4,852.3 | 100.0 | % | $ | 4,777.6 | 100.0 | % | |||||||||
Duration (in Years) | |||||||||||||||||||||
Total Investments in Fixed Maturities | 6.3 | 6.5 | 6.9 | ||||||||||||||||||
1 Sum of percentages for individual lines may not equal subtotals and grand total due to rounding. | |||||||||||||||||||||
Page 25
Kemper Corporation Investment Concentration (Dollars in Millions) (Unaudited) | |||||||||||||||||||||
Mar 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |||||||||||||||||||
Fair Value of Non-governmental Fixed Maturities by Industry | Amount | Percent of Total Investments | Amount | Percent of Total Investments | Amount | Percent of Total Investments | |||||||||||||||
Manufacturing | $ | 1,209.3 | 18.4 | % | $ | 1,160.4 | 18.0 | % | $ | 1,247.4 | 19.4 | % | |||||||||
Finance, Insurance and Real Estate | 695.4 | 10.6 | 707.4 | 11.0 | 785.6 | 12.2 | |||||||||||||||
Services | 389.8 | 5.9 | 374.4 | 5.8 | 305.0 | 4.7 | |||||||||||||||
Transportation, Communication and Utilities | 348.2 | 5.3 | 334.4 | 5.2 | 312.9 | 4.9 | |||||||||||||||
Mining | 138.4 | 2.1 | 139.7 | 2.2 | 139.7 | 2.2 | |||||||||||||||
Retail Trade | 95.3 | 1.4 | 91.1 | 1.4 | 74.5 | 1.2 | |||||||||||||||
Wholesale Trade | 82.6 | 1.3 | 80.6 | 1.3 | 69.7 | 1.1 | |||||||||||||||
Agriculture, Forestry and Fishing | 26.5 | 0.4 | 20.6 | 0.3 | 15.3 | 0.2 | |||||||||||||||
Other | 0.7 | — | 0.5 | — | 4.9 | 0.1 | |||||||||||||||
Total Fair Value of Non-governmental Fixed Maturities | $ | 2,986.2 | 45.4 | % | $ | 2,909.1 | 45.2 | % | $ | 2,955.0 | 46.0 | % | |||||||||
Mar 31, 2016 | |||||||||
Ten Largest Investment Exposures 1 | Fair Value | Percent of Total Investments | |||||||
Fixed Maturities: | |||||||||
States and Political Subdivisions: | |||||||||
Texas | $ | 102.8 | 1.6 | % | |||||
Michigan | 79.4 | 1.2 | |||||||
Ohio | 79.2 | 1.2 | |||||||
Georgia | 77.5 | 1.2 | |||||||
Colorado | 68.2 | 1.0 | |||||||
Florida | 67.1 | 1.0 | |||||||
Wisconsin | 59.6 | 0.9 | |||||||
New York | 55.5 | 0.8 | |||||||
Equity Securities - Other Equity Interests: | |||||||||
Vanguard Total Stock Market ETF | 78.2 | 1.2 | |||||||
Equity Method Limited Liability Investments: | |||||||||
Tennenbaum Opportunities Fund V, LLC | 56.4 | 0.9 | |||||||
Total | $ | 723.9 | 11.0 | % | |||||
1 | Excluding Investments in U.S. Government and Government Agencies and Authorities and Obligations of States and Political Subdivisions pre-refunded with U.S. government and government agencies obligations held in Trust at March 31, 2016. |
Page 26
Kemper Corporation Municipal Bonds (excluding Pre-refunded Bonds) (Dollars in Millions) (Unaudited) | ||||||||||||||||||||||
Mar 31, 2016 | ||||||||||||||||||||||
State General Obligation | Political Subdivision General Obligation | Revenue | Total Fair Value | Percent of Total Muni Bond1 | Percent of Total Investments1 | |||||||||||||||||
Texas | $ | 10.2 | $ | 24.7 | $ | 67.9 | $ | 102.8 | 6.7 | % | 1.6 | % | ||||||||||
Michigan | 38.8 | — | 40.6 | 79.4 | 5.2 | 1.2 | ||||||||||||||||
Ohio | 41.2 | 5.1 | 32.9 | 79.2 | 5.2 | 1.2 | ||||||||||||||||
Georgia | 52.2 | 7.4 | 17.9 | 77.5 | 5.1 | 1.2 | ||||||||||||||||
Colorado | — | 16.0 | 52.2 | 68.2 | 4.5 | 1.0 | ||||||||||||||||
Florida | 50.4 | — | 16.7 | 67.1 | 4.4 | 1.0 | ||||||||||||||||
Wisconsin | 51.0 | 7.2 | 1.4 | 59.6 | 3.9 | 0.9 | ||||||||||||||||
New York | 6.4 | 2.8 | 46.3 | 55.5 | 3.6 | 0.8 | ||||||||||||||||
Louisiana | 23.3 | 6.4 | 23.2 | 52.9 | 3.5 | 0.8 | ||||||||||||||||
Arkansas | 48.5 | — | — | 48.5 | 3.2 | 0.7 | ||||||||||||||||
North Carolina | 18.0 | 3.3 | 24.3 | 45.6 | 3.0 | 0.7 | ||||||||||||||||
Washington | 6.1 | 0.3 | 36.1 | 42.5 | 2.8 | 0.6 | ||||||||||||||||
Minnesota | 26.8 | 0.4 | 10.8 | 38.0 | 2.5 | 0.6 | ||||||||||||||||
Massachusetts | 2.8 | 1.6 | 33.5 | 37.9 | 2.5 | 0.6 | ||||||||||||||||
Nevada | 29.2 | 7.3 | — | 36.5 | 2.4 | 0.6 | ||||||||||||||||
Virginia | — | 20.1 | 13.1 | 33.2 | 2.2 | 0.5 | ||||||||||||||||
Utah | 16.6 | 1.6 | 14.1 | 32.3 | 2.1 | 0.5 | ||||||||||||||||
Oregon | 28.6 | — | 3.6 | 32.2 | 2.1 | 0.5 | ||||||||||||||||
Indiana | — | — | 32.1 | 32.1 | 2.1 | 0.5 | ||||||||||||||||
California | 0.3 | — | 30.9 | 31.2 | 2.0 | 0.5 | ||||||||||||||||
Connecticut | 24.8 | — | 5.2 | 30.0 | 2.0 | 0.5 | ||||||||||||||||
Maryland | 2.8 | 22.0 | 3.7 | 28.5 | 1.9 | 0.4 | ||||||||||||||||
Delaware | 17.5 | — | 10.0 | 27.5 | 1.8 | 0.4 | ||||||||||||||||
Tennessee | 8.1 | 7.6 | 9.9 | 25.6 | 1.7 | 0.4 | ||||||||||||||||
New Jersey | — | 5.5 | 20.0 | 25.5 | 1.7 | 0.4 | ||||||||||||||||
South Carolina | 20.7 | 2.1 | 2.4 | 25.2 | 1.7 | 0.4 | ||||||||||||||||
Pennsylvania | 11.7 | 2.8 | 10.6 | 25.1 | 1.6 | 0.4 | ||||||||||||||||
Missouri | — | — | 19.6 | 19.6 | 1.3 | 0.3 | ||||||||||||||||
Arizona | — | 0.8 | 18.7 | 19.5 | 1.3 | 0.3 | ||||||||||||||||
Rhode Island | 5.1 | — | 14.1 | 19.2 | 1.3 | 0.3 | ||||||||||||||||
Illinois | 1.3 | 2.5 | 15.1 | 18.9 | 1.2 | 0.3 | ||||||||||||||||
Idaho | — | 10.9 | 8.0 | 18.9 | 1.2 | 0.3 | ||||||||||||||||
Alabama | 9.9 | — | 8.9 | 18.8 | 1.2 | 0.3 | ||||||||||||||||
New Mexico | — | — | 18.5 | 18.5 | 1.2 | 0.3 | ||||||||||||||||
District of Columbia | — | 5.2 | 12.5 | 17.7 | 1.2 | 0.3 | ||||||||||||||||
Iowa | — | — | 17.4 | 17.4 | 1.1 | 0.3 | ||||||||||||||||
Kentucky | — | — | 16.2 | 16.2 | 1.1 | 0.2 | ||||||||||||||||
Hawaii | 15.6 | — | — | 15.6 | 1.0 | 0.2 | ||||||||||||||||
Vermont | — | — | 12.9 | 12.9 | 0.8 | 0.2 | ||||||||||||||||
All Other States | 20.8 | 10.2 | 43.0 | 74.0 | 4.8 | 1.1 | ||||||||||||||||
Total (1) | $ | 588.7 | $ | 173.8 | $ | 764.3 | $ | 1,526.8 | 100.0 | % | 23.2 | % | ||||||||||
1 Sum of percentages for individual lines may not equal total due to rounding. | ||||||||||||||||||||||
Page 27
Kemper Corporation Investments in Limited Liability Companies and Limited Partnerships (Dollars in Millions) (Unaudited) | ||||||||||||
Unfunded Commitment | Reported Value | |||||||||||
Asset Class | Mar 31, 2016 | Mar 31, 2016 | Dec 31, 2015 | |||||||||
Reported as Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings: | ||||||||||||
Distressed Debt | $ | — | $ | 82.1 | $ | 90.5 | ||||||
Mezzanine Debt | 51.5 | 50.7 | 38.8 | |||||||||
Secondary Transactions | 20.0 | 35.1 | 38.5 | |||||||||
Senior Debt | 0.5 | 9.7 | 10.8 | |||||||||
Growth Equity | — | 4.8 | 4.8 | |||||||||
Leveraged Buyout | 0.1 | 2.9 | 2.8 | |||||||||
Other | — | 5.2 | 4.4 | |||||||||
Total Equity Method Limited Liability Investments | 72.1 | 190.5 | 190.6 | |||||||||
Reported as Other Equity Interests at Fair Value: | ||||||||||||
Mezzanine Debt | 66.8 | 85.8 | 83.8 | |||||||||
Senior Debt | 24.5 | 37.9 | 37.9 | |||||||||
Distressed Debt | 6.8 | 18.2 | 18.9 | |||||||||
Secondary Transactions | 10.0 | 13.2 | 14.2 | |||||||||
Hedge Fund | — | — | — | |||||||||
Leveraged Buyout | 1.4 | 6.8 | 5.9 | |||||||||
Other | 1.0 | 41.5 | 44.8 | |||||||||
Total Reported as Other Equity Interests at Fair Value | 110.5 | 203.4 | 205.5 | |||||||||
Reported as Fair Value Option Investments: | ||||||||||||
Hedge Funds | — | 161.9 | 164.5 | |||||||||
Total Investments in Limited Liability Companies and Limited Partnerships | $ | 182.6 | $ | 555.8 | $ | 560.6 | ||||||
Page 28
Kemper Corporation
Definitions of Non-GAAP Financial Measures
The Company believes that investors’ understanding of Kemper’s performance is enhanced by the disclosure of the following non-GAAP financial measures. The methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities, is a ratio that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity after excluding the after-tax impact of net unrealized gains on fixed income securities by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. The Company uses the trend in book value per share, excluding the after-tax impact of net unrealized gains on fixed income securities in conjunction with book value per share to identify and analyze the change in net worth attributable to management efforts between periods. The Company believes the non-GAAP financial measure is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are generally not influenced by management. The Company believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers.
Book Value Per Share Excluding Goodwill, is a ratio that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity after excluding the recorded Goodwill asset by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. Book Value Per Share Excluding Goodwill, also referred to as Tangible Book Value Per Share, is a common measure used by analysts and investors to compare similar companies.
Consolidated Net Operating Income (Loss) is an after-tax, non-GAAP financial measure and is computed by excluding from Income (Loss) from Continuing Operations the after-tax impact of:
1) Net Realized Gains on Sales of Investments;
2) Net Impairment Losses Recognized in Earnings related to investments;
3) Loss from Early Extinguishment of Debt; and
4) 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 Income (Loss) from Continuing Operations.
The Company believes that Consolidated Net Operating Income (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. Net Realized Gains on Sales of Investments and Net Impairment Losses Recognized in Earnings related to investments included in the Company’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 Company’s investments, the timing of which is unrelated to the insurance underwriting process. Loss from Early Extinguishment of Debt is driven by the Company’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. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.
Page 29
Kemper Corporation
Definitions of Non-GAAP Financial Measures (continued)
A reconciliation of Consolidated Net Operating Income (Loss) to Income (Loss) from Continuing Operations is presented below:
Three Months Ended | ||||||||||||||||||||
Dollars in Millions (Unaudited) | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||||||||||
Consolidated Net Operating Income (Loss) | $ | (0.6 | ) | $ | 4.8 | $ | 36.6 | $ | 6.7 | $ | 21.8 | |||||||||
Net Income (Loss) From: | ||||||||||||||||||||
Net Realized Gains on Sales of Investments | 4.4 | 6.1 | 3.5 | 22.1 | 2.2 | |||||||||||||||
Net Impairment Losses Recognized in Earnings | (6.0 | ) | (9.6 | ) | (2.1 | ) | (1.4 | ) | (4.6 | ) | ||||||||||
Loss from Early Extinguishment of Debt | — | — | — | — | (5.9 | ) | ||||||||||||||
Income (Loss) from Continuing Operations | $ | (2.2 | ) | $ | 1.3 | $ | 38.0 | $ | 27.4 | $ | 13.5 | |||||||||
Consolidated Net Operating Income (Loss) Per Unrestricted Share is a non-GAAP financial measure. It is computed by dividing Consolidated Net Operating Income (Loss) by the weighted average unrestricted shares outstanding. The most directly comparable GAAP financial measure is Income (Loss) from Continuing Operations Per Unrestricted Share‐basic.
A reconciliation of Consolidated Net Operating Income (Loss) Per Unrestricted Share-basic to Income (Loss) from Continuing Operations Per Unrestricted Share-basic is presented below:
Three Months Ended | ||||||||||||||||||||
(Unaudited) | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||||||||||
Consolidated Net Operating Income (Loss) Per Unrestricted Share | $ | (0.01 | ) | $ | 0.09 | $ | 0.70 | $ | 0.13 | $ | 0.42 | |||||||||
Net Income (Loss) Per Unrestricted Share From: | ||||||||||||||||||||
Net Realized Gains on Sales of Investments | 0.09 | 0.12 | 0.07 | 0.43 | 0.04 | |||||||||||||||
Net Impairment Losses Recognized in Earnings | (0.12 | ) | (0.18 | ) | (0.04 | ) | (0.03 | ) | (0.09 | ) | ||||||||||
Loss from Early Extinguishment of Debt | — | — | — | — | (0.11 | ) | ||||||||||||||
Income (Loss) from Continuing Operations Per Unrestricted Share | $ | (0.04 | ) | $ | 0.03 | $ | 0.73 | $ | 0.53 | $ | 0.26 | |||||||||
Underlying Combined Ratio is a non-GAAP financial measure. It is computed by adding the Current Year Non-catastrophe Losses and LAE Ratio with the Insurance Expense (including write-offs of long-lived assets) Ratio. The most directly comparable GAAP financial measure is the Combined Ratio, which is computed by adding total incurred losses and LAE, including the impact of catastrophe losses and loss and LAE reserve development from prior years, with the Insurance Expense (including write-offs of long-lived assets) Ratio. The Company believes the underlying combined ratio is useful to investors and is used by management to reveal the trends in the Company’s property and casualty insurance businesses that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses cause loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on 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 our insurance products in the current period. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company’s underwriting performance. The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.
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