Kemper sees net income growth in Q3’24 with improved underlying CoR in P&C

Kemper Corporation has announced its financial results for the third quarter of 2024, reporting a net income of $73.7 million compared to a net loss of $146.3 million seen in the same period last year.

Kemper’s total revenues for Q3 2024 decreased $20.5 million, or 1.7%, to $1,178.9 million, compared to the previous year, which the firm noted was mainly driven by a $76.4 million decrease from its Preferred Insurance business, reported as Non-Core Operations.

The decrease was due primarily to lower volumes resulting from the decision to exit and run-off the aforementioned business in the third quarter as well as ongoing profit improvement actions.

While there was a decrease, it was partially counterbalanced by two main factors, Kemper noted. Firstly, unlike 2023, there were no net losses from derivative transactions.

Secondly, the Specialty Property & Casualty Insurance segment saw a $28.6 million rise in earned premiums. This increase was fueled by a combination of higher new business and increased premium rates, leading to a higher average earned premium per exposure.

For this segment, Kemper also reported an adjusted net operating income of $103.6 million for the quarter, a substantial improvement from an adjusted net operating loss of $33.2 million the segment reported in the prior year quarter.

The Specialty P&C segment also saw an Underlying Combined Ratio of 91.3% compared to 100.5%in the third quarter of 2023. According to Kemper, this improvement was primarily driven by higher average earned premiums per exposure resulting from rate increases and lower underlying claim frequency.

Additionally, the Life Insurance segment reported adjusted net operating income of $15.0 million for Q3 2024, compared to an adjusted net operating income of $14.7 million in the Q3 2023.

Furthermore, total Kemper Corporation Shareholders’ Equity at the end of this year;s third quarter was $2,773.3 million, representing an increase of $268.1 million, or 11%, since year-end 2023 primarily driven by net income for the year.

The organisation and its direct non-insurance subsidiaries ended Q3 2024 with cash and investments of $503.7 million, and $477.0 million of available borrowing capacity under the revolving credit agreement.

Joseph P. Lacher, Jr., President and CEO, commented: “We achieved another strong quarter of operating and financial results. This was led by our Specialty Auto business, which generated solid underwriting performance and sequential PIF growth. We are well positioned to continue to deliver on our promises and create long-term shareholder value.”

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