Investor Supplement
First Quarter 2013
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 27.
Kemper Corporation
Investor Supplement
First Quarter 2013
Table of Contents
|
| |
| | |
| | Page |
| Consolidated Financial Highlights | 3 |
| Consolidated Statements of Income | 4 |
| Consolidated Balance Sheets | 5 |
| Consolidated Statements of Cash Flows | 6 - 7 |
| Capital Metrics | 8 |
| Debt Outstanding and Ratings | 9 |
| Segment Revenues | 10 |
| Segment Operating Results | 11 - 12 |
| Catastrophe Frequency and Severity | 13 |
| Combined Property and Casualty Operations | 14 |
| Kemper Preferred Segment | 15 - 16 |
| Kemper Specialty Segment | 17 - 18 |
| Kemper Direct Segment | 19 - 20 |
| Life and Health Insurance Segment | 21 |
| Investment Performance | 22 |
| Invested Assets | 23 |
| Investment Concentration | 24 |
| Municipal Bond Securities | 25 |
| Investments in Limited Liability Investment Companies and Limited Partnerships | 26 |
| Definitions of Non-GAAP Financial Measures | 27 - 28 |
Kemper Corporation Consolidated Financial Highlights (Dollars in Millions, Except Per Share Amounts) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| For Period Ended | | | | | | | | | | |
| Earned Premiums | | $ | 509.9 |
| | $ | 520.8 |
| | $ | 527.3 |
| | $ | 529.8 |
| | $ | 529.2 |
|
| Net Investment Income | | 80.8 |
| | 72.9 |
| | 70.4 |
| | 75.2 |
| | 77.4 |
|
| Net Investment Gains and Other Income | | 25.2 |
| | 2.9 |
| | 47.9 |
| | 3.9 |
| | 4.6 |
|
| Total Revenues | | $ | 615.9 |
| | $ | 596.6 |
| | $ | 645.6 |
| | $ | 608.9 |
| | $ | 611.2 |
|
| | | | | | | | | | | |
Consolidated Net Operating Income (Loss)1 | | $ | 42.3 |
| | $ | (3.4 | ) | | $ | 24.6 |
| | $ | (0.8 | ) | | $ | 33.4 |
|
| Income (Loss) from Continuing Operations | | $ | 58.6 |
| | $ | (1.7 | ) | | $ | 55.6 |
| | $ | 1.6 |
| | $ | 36.3 |
|
| Net Income | | $ | 58.4 |
| | $ | 1.9 |
| | $ | 55.6 |
| | $ | 2.3 |
| | $ | 43.6 |
|
| | | | | | | | | | | |
| Per Unrestricted Common Share Amounts: | | | | | | | | | | |
| Basic: | | | | | | | | | | |
Consolidated Net Operating Income (Loss)1 | | $ | 0.72 |
| | $ | (0.06 | ) | | $ | 0.42 |
| | $ | (0.01 | ) | | $ | 0.56 |
|
| Income (Loss) from Continuing Operations | | $ | 1.00 |
| | $ | (0.03 | ) | | $ | 0.95 |
| | $ | 0.03 |
| | $ | 0.61 |
|
| Net Income | | $ | 1.00 |
| | $ | 0.03 |
| | $ | 0.95 |
| | $ | 0.04 |
| | $ | 0.73 |
|
| Diluted: | | | | | | | | | | |
Consolidated Net Operating Income (Loss)1 | | $ | 0.72 |
| | $ | (0.06 | ) | | $ | 0.42 |
| | $ | (0.01 | ) | | $ | 0.55 |
|
| Income (Loss) from Continuing Operations | | $ | 1.00 |
| | $ | (0.03 | ) | | $ | 0.95 |
| | $ | 0.03 |
| | $ | 0.60 |
|
| Net Income | | $ | 1.00 |
| | $ | 0.03 |
| | $ | 0.95 |
| | $ | 0.04 |
| | $ | 0.72 |
|
| | | | | | | | | | | |
| Dividends Paid to Shareholders Per Share | | $ | 0.24 |
| | $ | 0.24 |
| | $ | 0.24 |
| | $ | 0.24 |
| | $ | 0.24 |
|
| | | | | | | | | | | |
| At Period End | | | | | | | | | | |
| Total Assets | | $ | 8,056.2 |
| | $ | 8,009.1 |
| | $ | 8,120.8 |
| | $ | 8,006.8 |
| | $ | 7,970.4 |
|
| Insurance Reserves | | $ | 4,117.1 |
| | $ | 4,132.2 |
| | $ | 4,131.6 |
| | $ | 4,140.8 |
| | $ | 4,119.2 |
|
| Notes Payable | | $ | 611.6 |
| | $ | 611.4 |
| | $ | 611.2 |
| | $ | 611.0 |
| | $ | 610.8 |
|
| Shareholders’ Equity | | $ | 2,172.4 |
| | $ | 2,161.7 |
| | $ | 2,204.5 |
| | $ | 2,148.7 |
| | $ | 2,131.8 |
|
| Shareholders’ Equity Excluding Goodwill | | $ | 1,860.6 |
| | $ | 1,849.9 |
| | $ | 1,892.7 |
| | $ | 1,836.9 |
| | $ | 1,820.0 |
|
| Common Shares Issued and Outstanding (In Millions) | | 58.322 |
| | 58.454 |
| | 58.353 |
| | 59.000 |
| | 59.723 |
|
Book Value Per Share2 | | $ | 37.25 |
| | $ | 36.98 |
| | $ | 37.78 |
| | $ | 36.42 |
| | $ | 35.69 |
|
Book Value Per Share Excluding Goodwill1,2 | | $ | 31.90 |
| | $ | 31.65 |
| | $ | 32.44 |
| | $ | 31.13 |
| | $ | 30.47 |
|
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1,2 | | $ | 31.55 |
| | $ | 30.62 |
| | $ | 31.19 |
| | $ | 30.19 |
| | $ | 30.40 |
|
Debt to Total Capitalization2 | | 22.0 | % | | 22.0 | % | | 21.7 | % | | 22.1 | % | | 22.3 | % |
Rolling 12 Months Return on 5-point Average Shareholders Equity2,3 | | 5.5 | % | | 4.8 | % | | 5.9 | % | | 3.4 | % | | 3.2 | % |
| | | | | | | | | | | |
1 Non-GAAP Measure. See page 27 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. |
Kemper Corporation Consolidated Statements of Income (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Revenues: | | | | | | | | | | |
| Earned Premiums | | $ | 509.9 |
| | $ | 520.8 |
| | $ | 527.3 |
| | $ | 529.8 |
| | $ | 529.2 |
|
| Net Investment Income | | 80.8 |
| | 72.9 |
| | 70.4 |
| | 75.2 |
| | 77.4 |
|
| Other Income | | 0.2 |
| | 0.2 |
| | 0.2 |
| | 0.2 |
| | 0.2 |
|
| Net Realized Gains on Sales of Investments | | 26.9 |
| | 5.5 |
| | 50.9 |
| | 4.1 |
| | 4.9 |
|
| Other-than-temporary Impairment Losses: | | | | | | | | | | |
| Total Other-than-temporary Impairment Losses | | (2.4 | ) | | (3.1 | ) | | (3.2 | ) | | (0.4 | ) | | (0.5 | ) |
| Portion of Losses Recognized in Other Comprehensive Income | | 0.5 |
| | 0.3 |
| | — |
| | — |
| | — |
|
| Net Impairment Losses Recognized in Earnings | | (1.9 | ) | | (2.8 | ) | | (3.2 | ) | | (0.4 | ) | | (0.5 | ) |
| Total Revenues | | 615.9 |
| | 596.6 |
| | 645.6 |
| | 608.9 |
| | 611.2 |
|
| Expenses: | | | | | | | | | | |
| Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses | | 349.2 |
| | 413.0 |
| | 368.7 |
| | 423.8 |
| | 376.6 |
|
| Insurance Expenses | | 158.3 |
| | 169.5 |
| | 172.7 |
| | 167.7 |
| | 162.4 |
|
| Interest and Other Expenses | | 23.8 |
| | 20.1 |
| | 22.7 |
| | 20.9 |
| | 21.8 |
|
| Total Expenses | | 531.3 |
| | 602.6 |
| | 564.1 |
| | 612.4 |
| | 560.8 |
|
| Income (Loss) from Continuing Operations before Income Taxes | | 84.6 |
| | (6.0 | ) | | 81.5 |
| | (3.5 | ) | | 50.4 |
|
| Income Tax Benefit (Expense) | | (26.0 | ) | | 4.3 |
| | (25.9 | ) | | 5.1 |
| | (14.1 | ) |
| Income (Loss) from Continuing Operations | | 58.6 |
| | (1.7 | ) | | 55.6 |
| | 1.6 |
| | 36.3 |
|
| Discontinued Operations: | | | | | | | | | | |
| Income (Loss) from Discontinued Operations before Income Taxes | | (0.4 | ) | | 5.7 |
| | (0.1 | ) | | 1.0 |
| | 12.3 |
|
| Income Tax Benefit (Expense) | | 0.2 |
| | (2.1 | ) | | 0.1 |
| | (0.3 | ) | | (5.0 | ) |
| Income (Loss) from Discontinued Operations | | (0.2 | ) | | 3.6 |
| | — |
| | 0.7 |
| | 7.3 |
|
| Net Income | | $ | 58.4 |
| | $ | 1.9 |
| | $ | 55.6 |
| | $ | 2.3 |
| | $ | 43.6 |
|
| Income (Loss) from Continuing Operations Per Unrestricted Share: | | | | | | | | | | |
| Basic | | $ | 1.00 |
| | $ | (0.03 | ) | | $ | 0.95 |
| | $ | 0.03 |
| | $ | 0.61 |
|
| Diluted | | $ | 1.00 |
| | $ | (0.03 | ) | | $ | 0.95 |
| | $ | 0.03 |
| | $ | 0.60 |
|
| Net Income Per Unrestricted Share: | | | | | | | | | | |
| Basic | | $ | 1.00 |
| | $ | 0.03 |
| | $ | 0.95 |
| | $ | 0.04 |
| | $ | 0.73 |
|
| Diluted | | $ | 1.00 |
| | $ | 0.03 |
| | $ | 0.95 |
| | $ | 0.04 |
| | $ | 0.72 |
|
| Dividends Paid to Shareholders Per Share | | $ | 0.24 |
| | $ | 0.24 |
| | $ | 0.24 |
| | $ | 0.24 |
| | $ | 0.24 |
|
| Weighted Average Unrestricted Common Shares Outstanding | | 58.131 |
| | 58.067 |
| | 58.300 |
| | 59.197 |
| | 59.866 |
|
| | | | | | | | | | | |
Kemper Corporation Consolidated Balance Sheets (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Assets: | | | | | | | | | | |
| Investments: | | | | | | | | | | |
| Fixed Maturities at Fair Value | | $ | 4,856.5 |
| | $ | 4,860.2 |
| | $ | 4,725.6 |
| | $ | 4,766.7 |
| | $ | 4,787.7 |
|
| Equity Securities at Fair Value | | 554.1 |
| | 521.9 |
| | 545.7 |
| | 470.2 |
| | 429.6 |
|
| Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings | | 248.1 |
| | 253.0 |
| | 267.3 |
| | 283.9 |
| | 311.7 |
|
| Short-term Investments at Cost | | 362.8 |
| | 327.5 |
| | 297.3 |
| | 272.7 |
| | 364.2 |
|
| Other Investments | | 494.8 |
| | 497.5 |
| | 500.1 |
| | 500.3 |
| | 499.0 |
|
| Total Investments | | 6,516.3 |
| | 6,460.1 |
| | 6,336.0 |
| | 6,293.8 |
| | 6,392.2 |
|
| Cash | | 97.5 |
| | 96.3 |
| | 318.7 |
| | 249.5 |
| | 128.7 |
|
| Receivable from Policyholders | | 363.2 |
| | 369.3 |
| | 385.6 |
| | 374.7 |
| | 378.4 |
|
| Other Receivables | | 202.7 |
| | 206.1 |
| | 207.6 |
| | 207.0 |
| | 210.5 |
|
| Deferred Policy Acquisition Costs | | 304.5 |
| | 303.4 |
| | 306.8 |
| | 303.5 |
| | 297.9 |
|
| Goodwill | | 311.8 |
| | 311.8 |
| | 311.8 |
| | 311.8 |
| | 311.8 |
|
| Current and Deferred Income Tax Assets | | — |
| | 5.4 |
| | 0.1 |
| | 9.8 |
| | — |
|
| Other Assets | | 260.2 |
| | 256.7 |
| | 254.2 |
| | 256.7 |
| | 250.9 |
|
| Total Assets | | $ | 8,056.2 |
| | $ | 8,009.1 |
| | $ | 8,120.8 |
| | $ | 8,006.8 |
| | $ | 7,970.4 |
|
| Liabilities and Shareholders’ Equity: | | | | | | | | | | |
| Insurance Reserves: | | | | | | | | | | |
| Life and Health | | $ | 3,174.8 |
| | $ | 3,161.6 |
| | $ | 3,149.8 |
| �� | $ | 3,130.6 |
| | $ | 3,117.8 |
|
| Property and Casualty | | 942.3 |
| | 970.6 |
| | 981.8 |
| | 1,010.2 |
| | 1,001.4 |
|
| Total Insurance Reserves | | 4,117.1 |
| | 4,132.2 |
| | 4,131.6 |
| | 4,140.8 |
| | 4,119.2 |
|
| Unearned Premiums | | 646.8 |
| | 650.9 |
| | 674.3 |
| | 665.5 |
| | 668.3 |
|
| Liabilities for Income Taxes | | 25.8 |
| | 21.5 |
| | 59.1 |
| | 24.7 |
| | 18.2 |
|
| Notes Payable at Amortized Cost | | 611.6 |
| | 611.4 |
| | 611.2 |
| | 611.0 |
| | 610.8 |
|
| Accrued Expenses and Other Liabilities | | 482.5 |
| | 431.4 |
| | 440.1 |
| | 416.1 |
| | 422.1 |
|
| Total Liabilities | | 5,883.8 |
| | 5,847.4 |
| | 5,916.3 |
| | 5,858.1 |
| | 5,838.6 |
|
| Shareholders’ Equity: | | | | | | | | | | |
| Common Stock | | 5.8 |
| | 5.8 |
| | 5.8 |
| | 5.9 |
| | 6.0 |
|
| Paid-in Capital | | 722.5 |
| | 725.0 |
| | 722.8 |
| | 729.7 |
| | 737.5 |
|
| Retained Earnings | | 1,158.0 |
| | 1,118.2 |
| | 1,130.8 |
| | 1,101.6 |
| | 1,126.2 |
|
| Accumulated Other Comprehensive Income | | 286.1 |
| | 312.7 |
| | 345.1 |
| | 311.5 |
| | 262.1 |
|
| Total Shareholders’ Equity | | 2,172.4 |
| | 2,161.7 |
| | 2,204.5 |
| | 2,148.7 |
| | 2,131.8 |
|
| Total Liabilities and Shareholders’ Equity | | $ | 8,056.2 |
| | $ | 8,009.1 |
| | $ | 8,120.8 |
| | $ | 8,006.8 |
| | $ | 7,970.4 |
|
Kemper Corporation Consolidated Statements of Cash Flows (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Year Ended |
| | | Mar 31,
2013 | | Mar 31,
2012 | | Dec 31,
2012 | | Dec 31,
2011 | | Dec 31,
2010 |
| Operating Activities: | | | | | | | | | | |
| Net Income | | $ | 58.4 |
| | $ | 43.6 |
| | $ | 103.4 |
| | $ | 74.5 |
| | $ | 177.9 |
|
| Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities: | | | | | | | | | | |
| Increase in Deferred Policy Acquisition Costs | | (1.1 | ) | | (3.9 | ) | | (9.4 | ) | | (7.8 | ) | | (4.7 | ) |
| Amortization of Life Insurance in Force Acquired and Customer Relationships Acquired | | 2.1 |
| | 2.0 |
| | 8.0 |
| | 11.4 |
| | 11.0 |
|
| Equity in Net Income of Investee before Taxes | | — |
| | — |
| | — |
| | — |
| | 0.2 |
|
| Equity in Earnings of Equity Method Limited Liability Investments | | (8.6 | ) | | (6.7 | ) | | (9.3 | ) | | (9.6 | ) | | (48.8 | ) |
| Distribution of Accumulated Earnings of Equity Method Limited Liability Investments | | 3.4 |
| | — |
| | 15.4 |
| | — |
| | — |
|
| Amortization of Investment Securities and Depreciation of Investment Real Estate | | 4.6 |
| | 4.1 |
| | 15.2 |
| | 16.0 |
| | 17.6 |
|
| Net Realized Gains on Sales of Investments | | (26.9 | ) | | (4.9 | ) | | (65.4 | ) | | (34.1 | ) | | (42.6 | ) |
| Net Impairment Losses Recognized in Earnings | | 1.9 |
| | 0.5 |
| | 6.9 |
| | 11.3 |
| | 16.5 |
|
| Net Gain on Sale of Portfolio of Automobile Loan Receivables | | — |
| | (11.3 | ) | | (12.9 | ) | | (4.5 | ) | | — |
|
| Benefit for Loan Losses | | — |
| | (2.0 | ) | | (2.0 | ) | | (42.0 | ) | | (14.2 | ) |
| Depreciation of Property and Equipment | | 4.2 |
| | 3.3 |
| | 15.3 |
| | 10.9 |
| | 14.5 |
|
| Write-off of Goodwill | | — |
| | — |
| | — |
| | — |
| | 14.8 |
|
| Impairment of P&C Customer Relationships Acquired | | — |
| | — |
| | — |
| | 13.5 |
| | — |
|
| Decrease (Increase) in Other Receivables | | 8.7 |
| | 7.5 |
| | 13.9 |
| | (0.2 | ) | | 28.0 |
|
| Decrease in Insurance Reserves | | (15.7 | ) | | (13.1 | ) | | (1.1 | ) | | (52.1 | ) | | (52.1 | ) |
| Increase (Decrease) in Unearned Premiums | | (4.1 | ) | | 2.1 |
| | (15.2 | ) | | (12.4 | ) | | (46.4 | ) |
| Change in Income Taxes | | 25.3 |
| | 16.2 |
| | (14.9 | ) | | 17.2 |
| | 8.7 |
|
| Increase (Decrease) in Accrued Expenses and Other Liabilities | | 20.7 |
| | 6.8 |
| | (15.6 | ) | | (47.5 | ) | | (41.0 | ) |
| Other, Net | | 8.4 |
| | 11.4 |
| | 33.4 |
| | 30.4 |
| | 19.1 |
|
| Net Cash Provided (Used) by Operating Activities (Carryforward to page 7) | | 81.3 |
| | 55.6 |
| | 65.7 |
| | (25.0 | ) | | 58.5 |
|
Kemper Corporation Consolidated Statements of Cash Flows (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Year Ended |
| | | Mar 31,
2013 | | Mar 31,
2012 | | Dec 31,
2012 | | Dec 31,
2011 | | Dec 31,
2010 |
| Net Cash Provided (Used) by Operating Activities (Carryforward from page 6) | | 81.3 |
| | 55.6 |
| | 65.7 |
| | (25.0 | ) | | 58.5 |
|
| Investing Activities: | | | | | | | | | | |
| Sales and Maturities of Fixed Maturities | | 297.5 |
| | 103.7 |
| | 914.4 |
| | 650.3 |
| | 706.7 |
|
| Purchases of Fixed Maturities | | (307.5 | ) | | (136.1 | ) | | (872.6 | ) | | (663.4 | ) | | (532.1 | ) |
| Sales of Equity Securities | | 24.9 |
| | 7.7 |
| | 70.8 |
| | 248.3 |
| | 33.8 |
|
| Purchases of Equity Securities | | (40.7 | ) | | (17.4 | ) | | (137.7 | ) | | (199.2 | ) | | (189.1 | ) |
| Sales of Former Investee | | — |
| | — |
| | — |
| | — |
| | 2.7 |
|
| Return of Investment of Equity Method Limited Liability Investments | | 13.1 |
| | 10.6 |
| | 56.0 |
| | 57.0 |
| | 38.1 |
|
| Acquisitions of Equity Method Limited Liability Investments | | (5.1 | ) | | (9.3 | ) | | (31.0 | ) | | (25.7 | ) | | (31.9 | ) |
| Decrease (Increase) in Short-term Investments | | (36.3 | ) | | (116.7 | ) | | (80.0 | ) | | 155.5 |
| | (7.3 | ) |
| Acquisition and Improvements of Investment Real Estate | | (1.0 | ) | | (1.1 | ) | | (5.5 | ) | | (6.4 | ) | | (3.9 | ) |
| Sales of Investment Real Estate | | 3.8 |
| | — |
| | 6.0 |
| | 0.3 |
| | 9.6 |
|
| Increase in Other Investments | | (2.0 | ) | | (1.8 | ) | | (12.4 | ) | | (15.6 | ) | | (14.7 | ) |
| Acquisition of Software | | (6.6 | ) | | (8.1 | ) | | (26.5 | ) | | (23.2 | ) | | (26.4 | ) |
| Disposition of Business, Net of Cash Disposed | | 3.8 |
| | — |
| | — |
| | — |
| | 4.1 |
|
| Net Proceeds (Payments) from Sale of Portfolio of Automobile Loan Receivables | | (0.5 | ) | | 20.1 |
| | 16.7 |
| | 220.7 |
| | — |
|
| Receipts from Automobile Loan Receivables | | — |
| | 2.0 |
| | 2.0 |
| | 166.5 |
| | 339.6 |
|
| Other, Net | | (3.7 | ) | | (0.3 | ) | | (6.4 | ) | | (0.5 | ) | | (9.9 | ) |
| Net Cash Provided (Used) by Investing Activities | | (60.3 | ) | | (146.7 | ) | | (106.2 | ) | | 564.6 |
| | 319.3 |
|
| Financing Activities: | | | | | | | | | | |
| Repayments of Certificates of Deposits | | — |
| | — |
| | — |
| | (321.8 | ) | | (366.9 | ) |
| Proceeds from Issuance of Notes Payable | | — |
| | — |
| | — |
| | 95.0 |
| | 387.8 |
|
| Repayments of Notes Payable | | — |
| | — |
| | — |
| | (95.0 | ) | | (340.1 | ) |
| Common Stock Repurchases | | (6.5 | ) | | (17.9 | ) | | (60.7 | ) | | (27.4 | ) | | (34.4 | ) |
| Cash Dividends Paid to Shareholders | | (14.0 | ) | | (14.5 | ) | | (56.9 | ) | | (58.2 | ) | | (54.6 | ) |
| Cash Exercise of Stock Options | | — |
| | — |
| | 1.3 |
| | 0.2 |
| | 0.5 |
|
| Excess Tax Benefits from Share-based Awards | | 0.3 |
| | 0.5 |
| | 0.5 |
| | 0.2 |
| | 0.2 |
|
| Other, Net | | 0.4 |
| | 0.5 |
| | 1.4 |
| | 1.4 |
| | 3.2 |
|
| Net Cash Used by Financing Activities | | (19.8 | ) | | (31.4 | ) | | (114.4 | ) | | (405.6 | ) | | (404.3 | ) |
| Increase (Decrease) in Cash | | 1.2 |
| | (122.5 | ) | | (154.9 | ) | | 134.0 |
| | (26.5 | ) |
| Cash, Beginning of Year | | 96.3 |
| | 251.2 |
| | 251.2 |
| | 117.2 |
| | 143.7 |
|
| Cash, End of Period | | $ | 97.5 |
| | $ | 128.7 |
| | $ | 96.3 |
| | $ | 251.2 |
| | $ | 117.2 |
|
| | | | | | | | | | | |
Kemper Corporation Capital Metrics (Dollars and Shares in Millions, Except Per Share Amounts) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Book Value Per Share | | | | | | | | | | |
| Numerator | | | | | | | | | | |
| Shareholders’ Equity | | $ | 2,172.4 |
| | $ | 2,161.7 |
| | $ | 2,204.5 |
| | $ | 2,148.7 |
| | $ | 2,131.8 |
|
| Less: Goodwill | | (311.8 | ) | | (311.8 | ) | | (311.8 | ) | | (311.8 | ) | | (311.8 | ) |
| Shareholders’ Equity Excluding Goodwill | | $ | 1,860.6 |
| | $ | 1,849.9 |
| | $ | 1,892.7 |
| | $ | 1,836.9 |
| | $ | 1,820.0 |
|
| Shareholders’ Equity | | $ | 2,172.4 |
| | $ | 2,161.7 |
| | $ | 2,204.5 |
| | $ | 2,148.7 |
| | $ | 2,131.8 |
|
| Less: Net Unrealized Gains on Fixed Maturities | | (332.4 | ) | | (371.8 | ) | | (384.5 | ) | | (367.4 | ) | | (316.3 | ) |
| Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities | | $ | 1,840.0 |
| | $ | 1,789.9 |
| | $ | 1,820.0 |
| | $ | 1,781.3 |
| | $ | 1,815.5 |
|
| Denominator | | | | | | | | | | |
| Common Shares Issued and Outstanding | | 58.322 |
| | 58.454 |
| | 58.353 |
| | 59.000 |
| | 59.723 |
|
| Book Value Per Share | | $ | 37.25 |
| | $ | 36.98 |
| | $ | 37.78 |
| | $ | 36.42 |
| | $ | 35.69 |
|
| Book Value Per Share Excluding Goodwill | | $ | 31.90 |
| | $ | 31.65 |
| | $ | 32.44 |
| | $ | 31.13 |
| | $ | 30.47 |
|
| Book Value Per Share Excluding Unrealized on Fixed Maturities | | $ | 31.55 |
| | $ | 30.62 |
| | $ | 31.19 |
| | $ | 30.19 |
| | $ | 30.40 |
|
| | | | | | | | | | | |
| Return on Shareholders’ Equity | | | | | | | | | | |
| Numerator | | | | | | | | | | |
| Rolling 12 Months Net Income | | $ | 118.2 |
| | $ | 103.4 |
| | $ | 125.8 |
| | $ | 72.2 |
| | $ | 66.6 |
|
| Denominator (5-point Average) | | | | | | | | | | |
| 5-point Average Shareholders’ Equity | | $ | 2,163.8 |
| | $ | 2,152.7 |
| | $ | 2,144.6 |
| | $ | 2,111.8 |
| | $ | 2,086.8 |
|
| Rolling 12 Months Return on Average Shareholders Equity (5-point Average) | | 5.5 | % | | 4.8 | % | | 5.9 | % | | 3.4 | % | | 3.2 | % |
| | | | | | | | | | | |
| Debt and Total Capitalization | | | | | | | | | | |
| Debt | | $ | 611.6 |
| | $ | 611.4 |
| | $ | 611.2 |
| | $ | 611.0 |
| | $ | 610.8 |
|
| Shareholders’ Equity | | 2,172.4 |
| | 2,161.7 |
| | 2,204.5 |
| | 2,148.7 |
| | 2,131.8 |
|
| Total Capitalization | | $ | 2,784.0 |
| | $ | 2,773.1 |
| | $ | 2,815.7 |
| | $ | 2,759.7 |
| | $ | 2,742.6 |
|
| Ratio of Debt to Shareholders’ Equity | | 28.2 | % | | 28.3 | % | | 27.7 | % | | 28.4 | % | | 28.7 | % |
| Ratio of Debt to Total Capitalization | | 22.0 | % | | 22.0 | % | | 21.7 | % | | 22.1 | % | | 22.3 | % |
| | | | | | | | | | | |
| Parent Company Liquidity | | | | | | | | | | |
| Kemper Holding Company Cash and Investments | | $ | 187.4 |
| | $ | 190.2 |
| | $ | 214.7 |
| | $ | 163.2 |
| | $ | 188.9 |
|
| Borrowings Available Under Credit Agreement | | 325.0 |
| | 325.0 |
| | 325.0 |
| | 325.0 |
| | 325.0 |
|
| Parent Company Liquidity | | $ | 512.4 |
| | $ | 515.2 |
| | $ | 539.7 |
| | $ | 488.2 |
| | $ | 513.9 |
|
| | | | | | | | | | | |
| Capital Returned to Shareholders | | | | | | | | | | |
| Common Stock Repurchased | | $ | 6.5 |
| | $ | — |
| | $ | 20.0 |
| | $ | 21.5 |
| | $ | 19.2 |
|
| Cash Dividends Paid | | 14.0 |
| | 14.0 |
| | 14.1 |
| | 14.3 |
| | 14.5 |
|
| Total Capital Returned to Shareholders | | $ | 20.5 |
| | $ | 14.0 |
| | $ | 34.1 |
| | $ | 35.8 |
| | $ | 33.7 |
|
Kemper Corporation Debt Outstanding and Ratings (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Mar 31, 2013 | | Dec 31, 2012 | | Sep 30, 2012 | | Jun 30, 2012 | | Mar 31, 2012 |
| Notes Payable under Revolving Credit Agreements | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
| Senior Notes at Amortized Cost: | | | | | | | | | | |
| 6.00% Senior Notes due May 15, 2017 | | 357.4 |
| | 357.3 |
| | 357.2 |
| | 357.1 |
| | 356.9 |
|
| 6.00% Senior Notes due November 30, 2015 | | 248.7 |
| | 248.6 |
| | 248.5 |
| | 248.3 |
| | 248.3 |
|
| Mortgage Note Payable at Amortized Cost | | 5.5 |
| | 5.5 |
| | 5.5 |
| | 5.6 |
| | 5.6 |
|
| Notes Payable at Amortized Cost | | $ | 611.6 |
| | $ | 611.4 |
| | $ | 611.2 |
| | $ | 611.0 |
| | $ | 610.8 |
|
| | | | | | | | | | | |
| | | A.M. Best | | Moody’s | | S&P | | Fitch | | |
| As of Date of Financial Supplement | | | | | | | | | | |
| Kemper Debt Ratings: | | | | | | | | | | |
| Senior Notes Payable | | bbb- | | Baa3 | | BBB- | | BBB- | | |
| 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
Kemper Corporation Segment Revenues (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Revenues: | | | | | | | | | | |
| Kemper Preferred: | | | | | | | | | | |
| Earned Premiums | | $ | 219.2 |
| | $ | 223.5 |
| | $ | 222.9 |
| | $ | 218.0 |
| | $ | 215.0 |
|
| Net Investment Income | | 15.0 |
| | 11.4 |
| | 10.8 |
| | 11.9 |
| | 10.9 |
|
| Other Income | | 0.1 |
| | 0.1 |
| | 0.1 |
| | 0.1 |
| | 0.1 |
|
| Total Kemper Preferred | | 234.3 |
| | 235.0 |
| | 233.8 |
| | 230.0 |
| | 226.0 |
|
| Kemper Specialty: | | | | | | | | | | |
| Earned Premiums | | 99.2 |
| | 102.5 |
| | 103.9 |
| | 106.6 |
| | 106.8 |
|
| Net Investment Income | | 6.3 |
| | 4.6 |
| | 4.5 |
| | 4.7 |
| | 5.2 |
|
| Other Income | | 0.1 |
| | 0.1 |
| | 0.1 |
| | 0.1 |
| | — |
|
| Total Kemper Specialty | | 105.6 |
| | 107.2 |
| | 108.5 |
| | 111.4 |
| | 112.0 |
|
| Kemper Direct: | | | | | | | | | | |
| Earned Premiums | | 33.7 |
| | 36.8 |
| | 40.3 |
| | 43.9 |
| | 47.0 |
|
| Net Investment Income | | 3.8 |
| | 3.2 |
| | 3.4 |
| | 3.7 |
| | 3.6 |
|
| Total Kemper Direct | | 37.5 |
| | 40.0 |
| | 43.7 |
| | 47.6 |
| | 50.6 |
|
| Life and Health Insurance: | | | | | | | | | | |
| Earned Premiums | | 157.8 |
| | 158.0 |
| | 160.2 |
| | 161.3 |
| | 160.4 |
|
| Net Investment Income | | 53.0 |
| | 50.8 |
| | 48.1 |
| | 49.7 |
| | 55.7 |
|
| Other Income | | — |
| | — |
| | — |
| | — |
| | 0.1 |
|
| Total Life and Health Insurance | | 210.8 |
| | 208.8 |
| | 208.3 |
| | 211.0 |
| | 216.2 |
|
| Total Segment Revenues | | 588.2 |
| | 591.0 |
| | 594.3 |
| | 600.0 |
| | 604.8 |
|
| Net Realized Gains on Sales of Investments | | 26.9 |
| | 5.5 |
| | 50.9 |
| | 4.1 |
| | 4.9 |
|
| Net Impairment Losses Recognized in Earnings | | (1.9 | ) | | (2.8 | ) | | (3.2 | ) | | (0.4 | ) | | (0.5 | ) |
| Other | | 2.7 |
| | 2.9 |
| | 3.6 |
| | 5.2 |
| | 2.0 |
|
| Total Revenues | | $ | 615.9 |
| | $ | 596.6 |
| | $ | 645.6 |
| | $ | 608.9 |
| | $ | 611.2 |
|
| | | | | | | | | | | |
Kemper Corporation Segment Operating Results (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Segment Operating Profit (Loss): | | | | | | | | | | |
| Kemper Preferred | | $ | 26.4 |
| | $ | (32.4 | ) | | $ | 10.4 |
| | $ | (19.1 | ) | | $ | 13.1 |
|
| Kemper Specialty | | 4.2 |
| | (5.3 | ) | | 3.2 |
| | (5.6 | ) | | 4.9 |
|
| Kemper Direct | | 9.6 |
| | 2.1 |
| | 1.6 |
| | (5.5 | ) | | (3.0 | ) |
| Life and Health | | 31.9 |
| | 37.7 |
| | 29.4 |
| | 30.3 |
| | 43.0 |
|
| Total Segment Operating Profit | | 72.1 |
| | 2.1 |
| | 44.6 |
| | 0.1 |
| | 58.0 |
|
| Corporate and Other Operating Loss | | (12.5 | ) | | (10.8 | ) | | (10.8 | ) | | (7.3 | ) | | (12.0 | ) |
| Total Operating Profit (Loss) | | 59.6 |
| | (8.7 | ) | | 33.8 |
| | (7.2 | ) | | 46.0 |
|
| Net Realized Gains on Sales of Investments | | 26.9 |
| | 5.5 |
| | 50.9 |
| | 4.1 |
| | 4.9 |
|
| Net Impairment Losses Recognized in Earnings | | (1.9 | ) | | (2.8 | ) | | (3.2 | ) | | (0.4 | ) | | (0.5 | ) |
| Income (Loss) from Continuing Operations before Income Taxes | | $ | 84.6 |
| | $ | (6.0 | ) | | $ | 81.5 |
| | $ | (3.5 | ) | | $ | 50.4 |
|
| Segment Net Operating Income (Loss): | | | | | | | | | | |
| Kemper Preferred | | $ | 18.8 |
| | $ | (19.7 | ) | | $ | 8.4 |
| | $ | (10.3 | ) | | $ | 10.4 |
|
| Kemper Specialty | | 3.5 |
| | (2.8 | ) | | 2.7 |
| | (2.8 | ) | | 4.1 |
|
| Kemper Direct | | 6.7 |
| | 1.8 |
| | 1.5 |
| | (2.9 | ) | | (1.3 | ) |
| Life and Health | | 21.2 |
| | 24.3 |
| | 19.2 |
| | 19.5 |
| | 27.8 |
|
| Total Segment Net Operating Income | | 50.2 |
| | 3.6 |
| | 31.8 |
| | 3.5 |
| | 41.0 |
|
| Corporate and Other Net Operating Loss | | (7.9 | ) | | (7.0 | ) | | (7.2 | ) | | (4.3 | ) | | (7.6 | ) |
| Consolidated Operating Income (Loss) | | 42.3 |
| | (3.4 | ) | | 24.6 |
| | (0.8 | ) | | 33.4 |
|
| Unallocated Net Income (Loss) From: | | | | | | | | | | |
| Net Realized Gains on Sales of Investments | | 17.5 |
| | 3.6 |
| | 33.0 |
| | 2.7 |
| | 3.2 |
|
| Net Impairment Losses Recognized in Earnings | | (1.2 | ) | | (1.9 | ) | | (2.0 | ) | | (0.3 | ) | | (0.3 | ) |
| Income (Loss) from Continuing Operations | | $ | 58.6 |
| | $ | (1.7 | ) | | $ | 55.6 |
| | $ | 1.6 |
| | $ | 36.3 |
|
| | | | | | | | | | | |
Kemper Corporation Segment Operating Results (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Earned Premiums by Product: | | | | | | | | | | |
| Life | | $ | 97.9 |
| | $ | 97.4 |
| | $ | 98.4 |
| | $ | 99.1 |
| | $ | 98.5 |
|
| Accident and Health | | 40.2 |
| | 41.0 |
| | 41.3 |
| | 41.4 |
| | 41.5 |
|
| Property and Casualty: | | | | | | | | | | |
| Personal Lines: | | | | | | | | | | |
| Automobile | | 245.7 |
| | 255.5 |
| | 261.3 |
| | 265.6 |
| | 267.7 |
|
| Homeowners | | 80.4 |
| | 81.4 |
| | 80.8 |
| | 78.7 |
| | 77.1 |
|
| Other Personal | | 33.6 |
| | 33.7 |
| | 34.5 |
| | 34.5 |
| | 34.2 |
|
| Total Personal Lines | | 359.7 |
| | 370.6 |
| | 376.6 |
| | 378.8 |
| | 379.0 |
|
| Commercial Automobile | | 12.1 |
| | 11.8 |
| | 11.0 |
| | 10.5 |
| | 10.2 |
|
| Total Earned Premiums | | $ | 509.9 |
| | $ | 520.8 |
| | $ | 527.3 |
| | $ | 529.8 |
| | $ | 529.2 |
|
| Net Investment Income by Segment: | | | | | | | | | | |
| Kemper Preferred: | | | | | | | | | | |
| Equity Method Limited Liability Companies | | $ | 3.5 |
| | $ | 1.3 |
| | $ | 0.5 |
| | $ | 0.8 |
| | $ | 1.4 |
|
| All Other Net Investment Income | | 11.5 |
| | 10.1 |
| | 10.3 |
| | 11.1 |
| | 9.5 |
|
| Net Investment Income | | 15.0 |
| | 11.4 |
| | 10.8 |
| | 11.9 |
| | 10.9 |
|
| Kemper Specialty: | | | | | | | | | | |
| Equity Method Limited Liability Companies | | 1.4 |
| | 0.5 |
| | 0.3 |
| | 0.3 |
| | 0.6 |
|
| All Other Net Investment Income | | 4.9 |
| | 4.1 |
| | 4.2 |
| | 4.4 |
| | 4.6 |
|
| Net Investment Income | | 6.3 |
| | 4.6 |
| | 4.5 |
| | 4.7 |
| | 5.2 |
|
| Kemper Direct: | | | | | | | | | | |
| Equity Method Limited Liability Companies | | 0.9 |
| | 0.5 |
| | 0.1 |
| | 0.2 |
| | 0.5 |
|
| All Other Net Investment Income | | 2.9 |
| | 2.7 |
| | 3.3 |
| | 3.5 |
| | 3.1 |
|
| Net Investment Income | | 3.8 |
| | 3.2 |
| | 3.4 |
| | 3.7 |
| | 3.6 |
|
| Life and Health Insurance: | | | | | | | | | | |
| Equity Method Limited Liability Companies | | 2.3 |
| | (0.3 | ) | | (1.5 | ) | | (0.3 | ) | | 3.9 |
|
| All Other Net Investment Income | | 50.7 |
| | 51.1 |
| | 49.6 |
| | 50.0 |
| | 51.8 |
|
| Net Investment Income | | 53.0 |
| | 50.8 |
| | 48.1 |
| | 49.7 |
| | 55.7 |
|
| Total Segment Net Investment Income | | 78.1 |
| | 70.0 |
| | 66.8 |
| | 70.0 |
| | 75.4 |
|
| Unallocated Net Investment Income: | | | | | | | | | | |
| Equity Method Limited Liability Companies | | 0.5 |
| | 0.2 |
| | — |
| | 0.1 |
| | 0.3 |
|
| All Other Net Investment Income | | 2.2 |
| | 2.7 |
| | 3.6 |
| | 5.1 |
| | 1.7 |
|
| Unallocated Net Investment Income | | 2.7 |
| | 2.9 |
| | 3.6 |
| | 5.2 |
| | 2.0 |
|
| Net Investment Income | | $ | 80.8 |
| | $ | 72.9 |
| | $ | 70.4 |
| | $ | 75.2 |
| | $ | 77.4 |
|
| | | | | | | | | | | |
Kemper Corporation Catastrophe Frequency and Severity (Unaudited) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CATASTROPHE LOSSES AND LAE |
| | | Three Months Ended Mar 31, 2013 | | Three Months Ended Mar 31, 2012 |
| | | Consolidated | | Combined P&C | | Consolidated | | Combined P&C |
| (Dollars in Millions) | | Number of Events | | Losses and LAE | | 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 | | 4 |
| | $ | 11.1 |
| | 4 |
| | $ | 8.7 |
| | 6 |
| | $ | 11.4 |
| | 6 |
| | $ | 10.6 |
|
| $5 - $10 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| $10 - $15 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| $15 - $20 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| $20 - $25 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Greater Than $25 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Total | | 4 |
| | $ | 11.1 |
| | 4 |
| | $ | 8.7 |
| | 6 |
| | $ | 11.4 |
| | 6 |
| | $ | 10.6 |
|
| | | | | | | | | | | | | | | | | |
| SEGMENT CATASTROPHE LOSSES AND LAE |
| | | Three Months Ended Mar 31, 2013 |
| | | Kemper Preferred | | Kemper Specialty | | Kemper Direct | | Life and Health Insurance |
| (Dollars in Millions) | | Number of Events | | Losses and LAE | | 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 | | 4 |
| | $ | 7.0 |
| | 4 |
| | $ | 1.1 |
| | 4 |
| | $ | 0.6 |
| | 4 |
| | $ | 2.4 |
|
| $5 - $10 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| $10 - $15 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| $15 - $20 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| $20 - $25 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Greater Than $25 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Total | | 4 |
| | $ | 7.0 |
| | 4 |
| | $ | 1.1 |
| | 4 |
| | $ | 0.6 |
| | 4 |
| | $ | 2.4 |
|
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended Mar 31, 2012 |
| | | Kemper Preferred | | Kemper Specialty | | Kemper Direct | | Life and Health Insurance |
| (Dollars in Millions) | | Number of Events | | Losses and LAE | | 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 | | 6 |
| | $ | 8.5 |
| | 5 |
| | $ | 0.1 |
| | 6 |
| | $ | 2.1 |
| | 6 |
| | $ | 0.7 |
|
| $5 - $10 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| $10 - $15 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| $20 - $25 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Greater Than $25 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Total | | 6 |
| | $ | 8.5 |
| | 5 |
| | $ | 0.1 |
| | 6 |
| | $ | 2.1 |
| | 6 |
| | $ | 0.7 |
|
Kemper Corporation Combined Property and Casualty Operations1 (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Results of Operations | | | | | | | | | | |
| Net Premiums Written | | $ | 345.4 |
| | $ | 340.5 |
| | $ | 377.7 |
| | $ | 367.3 |
| | $ | 368.6 |
|
| Earned Premiums: | | | | | | | | | | |
| Personal: | | | | | | | | | | |
| Automobile | | $ | 245.7 |
| | $ | 255.5 |
| | $ | 261.3 |
| | $ | 265.6 |
| | $ | 267.7 |
|
| Homeowners | | 80.4 |
| | 81.4 |
| | 80.8 |
| | 78.7 |
| | 77.1 |
|
| Other Personal | | 13.9 |
| | 14.1 |
| | 14.0 |
| | 13.7 |
| | 13.8 |
|
| Total Personal | | 340.0 |
| | 351.0 |
| | 356.1 |
| | 358.0 |
| | 358.6 |
|
| Commercial Automobile | | 12.1 |
| | 11.8 |
| | 11.0 |
| | 10.5 |
| | 10.2 |
|
| Total Earned Premiums | | 352.1 |
| | 362.8 |
| | 367.1 |
| | 368.5 |
| | 368.8 |
|
| Net Investment Income | | 25.1 |
| | 19.2 |
| | 18.7 |
| | 20.3 |
| | 19.7 |
|
| Other Income | | 0.2 |
| | 0.2 |
| | 0.2 |
| | 0.2 |
| | 0.1 |
|
| Total Revenues | | 377.4 |
| | 382.2 |
| | 386.0 |
| | 389.0 |
| | 388.6 |
|
| Incurred Losses and LAE related to: | | | | | | | | | | |
| Current Year: | | | | | | | | | | |
| Non-catastrophe Losses and LAE | | 251.1 |
| | 275.6 |
| | 272.0 |
| | 276.7 |
| | 271.0 |
|
| Catastrophe Losses and LAE | | 8.7 |
| | 46.3 |
| | 10.7 |
| | 50.8 |
| | 10.7 |
|
| Prior Years: | | | | | | | | | | |
| Non-catastrophe Losses and LAE | | (12.0 | ) | | (1.6 | ) | | (9.0 | ) | | (2.4 | ) | | (5.5 | ) |
| Catastrophe Losses and LAE | | (1.5 | ) | | (0.3 | ) | | (1.7 | ) | | (4.2 | ) | | (0.2 | ) |
| Total Incurred Losses and LAE | | 246.3 |
| | 320.0 |
| | 272.0 |
| | 320.9 |
| | 276.0 |
|
| Insurance Expenses | | 90.9 |
| | 97.8 |
| | 98.8 |
| | 98.3 |
| | 97.6 |
|
| Operating Profit (Loss) | | 40.2 |
| | (35.6 | ) | | 15.2 |
| | (30.2 | ) | | 15.0 |
|
| Income Tax Benefit (Expense) | | (11.2 | ) | | 14.9 |
| | (2.6 | ) | | 14.2 |
| | (1.8 | ) |
| Segment Net Operating Income (Loss) | | $ | 29.0 |
| | $ | (20.7 | ) | | $ | 12.6 |
| | $ | (16.0 | ) | | $ | 13.2 |
|
| Ratios Based On Earned Premiums | | | | | | | | | | |
| Current Year Non-catastrophe Losses and LAE Ratio | | 71.3 | % | | 75.9 | % | | 74.2 | % | | 75.1 | % | | 73.5 | % |
| Current Year Catastrophe Losses and LAE Ratio | | 2.5 |
| | 12.8 |
| | 2.9 |
| | 13.8 |
| | 2.9 |
|
| Prior Years Non-catastrophe Losses and LAE Ratio | | (3.4 | ) | | (0.4 | ) | | (2.5 | ) | | (0.7 | ) | | (1.5 | ) |
| Prior Years Catastrophe Losses and LAE Ratio | | (0.4 | ) | | (0.1 | ) | | (0.5 | ) | | (1.1 | ) | | (0.1 | ) |
| Total Incurred Loss and LAE Ratio | | 70.0 |
| | 88.2 |
| | 74.1 |
| | 87.1 |
| | 74.8 |
|
| Incurred Expense Ratio | | 25.8 |
| | 27.0 |
| | 26.9 |
| | 26.7 |
| | 26.5 |
|
| Combined Ratio | | 95.8 | % | | 115.2 | % | | 101.0 | % | | 113.8 | % | | 101.3 | % |
Underlying Combined Ratio 2 | | | | | | | | | | |
| Current Year Non-catastrophe Losses and LAE Ratio | | 71.3 | % | | 75.9 | % | | 74.2 | % | | 75.1 | % | | 73.5 | % |
| Incurred Expense Ratio | | 25.8 |
| | 27.0 |
| | 26.9 |
| | 26.7 |
| | 26.5 |
|
| Underlying Combined Ratio | | 97.1 | % | | 102.9 | % | | 101.1 | % | | 101.8 | % | | 100.0 | % |
| Non-GAAP Measure Reconciliation | | | | | | | | | | |
| Underlying Combined Ratio | | 97.1 | % | | 102.9 | % | | 101.1 | % | | 101.8 | % | | 100.0 | % |
| Current Year Catastrophe Losses and LAE Ratio | | 2.5 |
| | 12.8 |
| | 2.9 |
| | 13.8 |
| | 2.9 |
|
| Prior Years Non-catastrophe Losses and LAE Ratio | | (3.4 | ) | | (0.4 | ) | | (2.5 | ) | | (0.7 | ) | | (1.5 | ) |
| Prior Years Catastrophe Losses and LAE Ratio | | (0.4 | ) | | (0.1 | ) | | (0.5 | ) | | (1.1 | ) | | (0.1 | ) |
| Combined Ratio as Reported | | 95.8 | % | | 115.2 | % | | 101.0 | % | | 113.8 | % | | 101.3 | % |
| | | | | | | | | | | |
1 Includes the results of operations of the Kemper Preferred, Kemper Specialty and Kemper Direct segments. | | | | |
2 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. |
Kemper Corporation Kemper Preferred (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Results of Operations | | | | | | | | | | |
| Net Premiums Written | | $ | 205.8 |
| | $ | 213.8 |
| | $ | 237.9 |
| | $ | 233.0 |
| | $ | 207.0 |
|
| Earned Premiums: | | | | | | | | | | |
| Automobile | | $ | 127.1 |
| | $ | 130.4 |
| | $ | 130.5 |
| | $ | 128.0 |
| | $ | 126.6 |
|
| Homeowners | | 78.2 |
| | 79.1 |
| | 78.4 |
| | 76.3 |
| | 74.7 |
|
| Other Personal | | 13.9 |
| | 14.0 |
| | 14.0 |
| | 13.7 |
| | 13.7 |
|
| Total Earned Premiums | | 219.2 |
| | 223.5 |
| | 222.9 |
| | 218.0 |
| | 215.0 |
|
| Net Investment Income | | 15.0 |
| | 11.4 |
| | 10.8 |
| | 11.9 |
| | 10.9 |
|
| Other Income | | 0.1 |
| | 0.1 |
| | 0.1 |
| | 0.1 |
| | 0.1 |
|
| Total Revenues | | 234.3 |
| | 235.0 |
| | 233.8 |
| | 230.0 |
| | 226.0 |
|
| Incurred Losses and LAE related to: | | | | | | | | | | |
| Current Year: | | | | | | | | | | |
| Non-catastrophe Losses and LAE | | 147.9 |
| | 159.6 |
| | 154.0 |
| | 149.8 |
| | 145.0 |
|
| Catastrophe Losses and LAE | | 7.0 |
| | 42.7 |
| | 9.4 |
| | 44.8 |
| | 8.5 |
|
| Prior Years: | | | | | | | | | | |
| Non-catastrophe Losses and LAE | | (6.8 | ) | | 4.5 |
| | (0.8 | ) | | (1.7 | ) | | (0.6 | ) |
| Catastrophe Losses and LAE | | (1.4 | ) | | (0.2 | ) | | (1.6 | ) | | (4.1 | ) | | (0.3 | ) |
| Total Incurred Losses and LAE | | 146.7 |
| | 206.6 |
| | 161.0 |
| | 188.8 |
| | 152.6 |
|
| Insurance Expenses | | 61.2 |
| | 60.8 |
| | 62.4 |
| | 60.3 |
| | 60.3 |
|
| Operating Profit (Loss) | | 26.4 |
| | (32.4 | ) | | 10.4 |
| | (19.1 | ) | | 13.1 |
|
| Income Tax Benefit (Expense) | | (7.6 | ) | | 12.7 |
| | (2.0 | ) | | 8.8 |
| | (2.7 | ) |
| Segment Net Operating Income (Loss) | | $ | 18.8 |
| | $ | (19.7 | ) | | $ | 8.4 |
| | $ | (10.3 | ) | | $ | 10.4 |
|
| Ratios Based On Earned Premiums | | | | | | | | | | |
| Current Year Non-catastrophe Losses and LAE Ratio | | 67.4 | % | | 71.4 | % | | 69.1 | % | | 68.7 | % | | 67.4 | % |
| Current Year Catastrophe Losses and LAE Ratio | | 3.2 |
| | 19.1 |
| | 4.2 |
| | 20.6 |
| | 4.0 |
|
| Prior Years Non-catastrophe Losses and LAE Ratio | | (3.1 | ) | | 2.0 |
| | (0.4 | ) | | (0.8 | ) | | (0.3 | ) |
| Prior Years Catastrophe Losses and LAE Ratio | | (0.6 | ) | | (0.1 | ) | | (0.7 | ) | | (1.9 | ) | | (0.1 | ) |
| Total Incurred Loss and LAE Ratio | | 66.9 |
| | 92.4 |
| | 72.2 |
| | 86.6 |
| | 71.0 |
|
| Incurred Expense Ratio | | 27.9 |
| | 27.2 |
| | 28.0 |
| | 27.7 |
| | 28.0 |
|
| Combined Ratio | | 94.8 | % | | 119.6 | % | | 100.2 | % | | 114.3 | % | | 99.0 | % |
Underlying Combined Ratio 1 | | | | | | | | | | |
| Current Year Non-catastrophe Losses and LAE Ratio | | 67.4 | % | | 71.4 | % | | 69.1 | % | | 68.7 | % | | 67.4 | % |
| Incurred Expense Ratio | | 27.9 |
| | 27.2 |
| | 28.0 |
| | 27.7 |
| | 28.0 |
|
| Underlying Combined Ratio | | 95.3 | % | | 98.6 | % | | 97.1 | % | | 96.4 | % | | 95.4 | % |
| Non-GAAP Measure Reconciliation | | | | | | | | | | |
| Underlying Combined Ratio | | 95.3 | % | | 98.6 | % | | 97.1 | % | | 96.4 | % | | 95.4 | % |
| Current Year Catastrophe Losses and LAE Ratio | | 3.2 |
| | 19.1 |
| | 4.2 |
| | 20.6 |
| | 4.0 |
|
| Prior Years Non-catastrophe Losses and LAE Ratio | | (3.1 | ) | | 2.0 |
| | (0.4 | ) | | (0.8 | ) | | (0.3 | ) |
| Prior Years Catastrophe Losses and LAE Ratio | | (0.6 | ) | | (0.1 | ) | | (0.7 | ) | | (1.9 | ) | | (0.1 | ) |
| Combined Ratio as Reported | | 94.8 | % | | 119.6 | % | | 100.2 | % | | 114.3 | % | | 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. |
Kemper Corporation Kemper Preferred Insurance Reserves (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Mar 31, 2013 | | Dec 31, 2012 | | Sep 30, 2012 | | Jun 30, 2012 | | Mar 31, 2012 |
| Insurance Reserves: | | | | | | | | | | |
| Automobile | | $ | 281.0 |
| | $ | 287.6 |
| | $ | 274.2 |
| | $ | 272.3 |
| | $ | 273.2 |
|
| Homeowners | | 120.5 |
| | 123.7 |
| | 116.0 |
| | 124.0 |
| | 106.6 |
|
| Other Personal | | 41.7 |
| | 41.0 |
| | 38.5 |
| | 38.4 |
| | 36.0 |
|
| Insurance Reserves | | $ | 443.2 |
| | $ | 452.3 |
| | $ | 428.7 |
| | $ | 434.7 |
| | $ | 415.8 |
|
| Insurance Reserves: | | | | | | | | | | |
| Loss Reserves: | | | | | | | | | | |
| Case | | $ | 279.9 |
| | $ | 284.7 |
| | $ | 267.0 |
| | $ | 265.6 |
| | $ | 260.3 |
|
| Incurred but Not Reported | | 102.5 |
| | 105.5 |
| | 100.0 |
| | 107.0 |
| | 92.7 |
|
| Total Loss Reserves | | 382.4 |
| | 390.2 |
| | 367.0 |
| | 372.6 |
| | 353.0 |
|
| LAE Reserves | | 60.8 |
| | 62.1 |
| | 61.7 |
| | 62.1 |
| | 62.8 |
|
| Insurance Reserves | | $ | 443.2 |
| | $ | 452.3 |
| | $ | 428.7 |
| | $ | 434.7 |
| | $ | 415.8 |
|
Kemper Corporation Kemper Specialty (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Results of Operations | | | | | | | | | | |
| Net Premiums Written | | $ | 108.4 |
| | $ | 94.9 |
| | $ | 103.9 |
| | $ | 98.6 |
| | $ | 117.7 |
|
| Earned Premiums: | | | | | | | | | | |
| Personal Automobile | | $ | 87.1 |
| | $ | 90.7 |
| | $ | 92.9 |
| | $ | 96.1 |
| | $ | 96.6 |
|
| Commercial Automobile | | 12.1 |
| | 11.8 |
| | 11.0 |
| | 10.5 |
| | 10.2 |
|
| Total Earned Premiums | | 99.2 |
| | 102.5 |
| | 103.9 |
| | 106.6 |
| | 106.8 |
|
| Net Investment Income | | 6.3 |
| | 4.6 |
| | 4.5 |
| | 4.7 |
| | 5.2 |
|
| Other Income | | 0.1 |
| | 0.1 |
| | 0.1 |
| | 0.1 |
| | — |
|
| Total Revenues | | 105.6 |
| | 107.2 |
| | 108.5 |
| | 111.4 |
| | 112.0 |
|
| Incurred Losses and LAE related to: | | | | | | | | | | |
| Current Year: | | | | | | | | | | |
| Non-catastrophe Losses and LAE | | 78.7 |
| | 88.5 |
| | 84.2 |
| | 89.0 |
| | 86.2 |
|
| Catastrophe Losses and LAE | | 1.1 |
| | 0.1 |
| | 0.9 |
| | 3.7 |
| | 0.1 |
|
| Prior Years: | | | | | | | | | | |
| Non-catastrophe Losses and LAE | | 0.6 |
| | 0.1 |
| | (2.9 | ) | | 1.4 |
| | (1.0 | ) |
| Catastrophe Losses and LAE | | 0.1 |
| | — |
| | — |
| | — |
| | 0.1 |
|
| Total Incurred Losses and LAE | | 80.5 |
| | 88.7 |
| | 82.2 |
| | 94.1 |
| | 85.4 |
|
| Insurance Expenses | | 20.9 |
| | 23.8 |
| | 23.1 |
| | 22.9 |
| | 21.7 |
|
| Operating Profit (Loss) | | 4.2 |
| | (5.3 | ) | | 3.2 |
| | (5.6 | ) | | 4.9 |
|
| Income Tax Benefit (Expense) | | (0.7 | ) | | 2.5 |
| | (0.5 | ) | | 2.8 |
| | (0.8 | ) |
| Segment Net Operating Income (Loss) | | $ | 3.5 |
| | $ | (2.8 | ) | | $ | 2.7 |
| | $ | (2.8 | ) | | $ | 4.1 |
|
| Ratios Based On Earned Premiums | | | | | | | | | | |
| Current Year Non-catastrophe Losses and LAE Ratio | | 79.3 | % | | 86.3 | % | | 81.0 | % | | 83.5 | % | | 80.7 | % |
| Current Year Catastrophe Losses and LAE Ratio | | 1.1 |
| | 0.1 |
| | 0.9 |
| | 3.5 |
| | 0.1 |
|
| Prior Years Non-catastrophe Losses and LAE Ratio | | 0.6 |
| | 0.1 |
| | (2.8 | ) | | 1.3 |
| | (0.9 | ) |
| Prior Years Catastrophe Losses and LAE Ratio | | 0.1 |
| | — |
| | — |
| | — |
| | 0.1 |
|
| Total Incurred Loss and LAE Ratio | | 81.1 |
| | 86.5 |
| | 79.1 |
| | 88.3 |
| | 80.0 |
|
| Incurred Expense Ratio | | 21.1 |
| | 23.2 |
| | 22.2 |
| | 21.5 |
| | 20.3 |
|
| Combined Ratio | | 102.2 | % | | 109.7 | % | | 101.3 | % | | 109.8 | % | | 100.3 | % |
Underlying Combined Ratio 1 | | | | | | | | | | |
| Current Year Non-catastrophe Losses and LAE Ratio | | 79.3 | % | | 86.3 | % | | 81.0 | % | | 83.5 | % | | 80.7 | % |
| Incurred Expense Ratio | | 21.1 |
| | 23.2 |
| | 22.2 |
| | 21.5 |
| | 20.3 |
|
| Underlying Combined Ratio | | 100.4 | % | | 109.5 | % | | 103.2 | % | | 105.0 | % | | 101.0 | % |
| Non-GAAP Measure Reconciliation | | | | | | | | | | |
| Underlying Combined Ratio | | 100.4 | % | | 109.5 | % | | 103.2 | % | | 105.0 | % | | 101.0 | % |
| Current Year Catastrophe Losses and LAE Ratio | | 1.1 |
| | 0.1 |
| | 0.9 |
| | 3.5 |
| | 0.1 |
|
| Prior Years Non-catastrophe Losses and LAE Ratio | | 0.6 |
| | 0.1 |
| | (2.8 | ) | | 1.3 |
| | (0.9 | ) |
| Prior Years Catastrophe Losses and LAE Ratio | | 0.1 |
| | — |
| | — |
| | — |
| | 0.1 |
|
| Combined Ratio as Reported | | 102.2 | % | | 109.7 | % | | 101.3 | % | | 109.8 | % | | 100.3 | % |
| | | | | | | | | | | |
1Underlying 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. |
Kemper Corporation Kemper Specialty Insurance Reserves (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Mar 31, 2013 | | Dec 31, 2012 | | Sep 30, 2012 | | Jun 30, 2012 | | Mar 31, 2012 |
| Insurance Reserves: | | | | | | | | | | |
| Personal Automobile | | $ | 159.1 |
| | $ | 164.8 |
| | $ | 167.4 |
| | $ | 171.6 |
| | $ | 165.2 |
|
| Commercial Automobile | | 44.6 |
| | 43.9 |
| | 40.8 |
| | 43.2 |
| | 46.7 |
|
| Other | | 7.0 |
| | 7.2 |
| | 7.4 |
| | 7.5 |
| | 7.6 |
|
| Insurance Reserves | | $ | 210.7 |
| | $ | 215.9 |
| | $ | 215.6 |
| | $ | 222.3 |
| | $ | 219.5 |
|
| Insurance Reserves: | | | | | | | | | | |
| Loss Reserves: | | | | | | | | | | |
| Case | | $ | 126.0 |
| | $ | 130.9 |
| | $ | 132.7 |
| | $ | 134.7 |
| | $ | 131.0 |
|
| Incurred but Not Reported | | 48.7 |
| | 48.3 |
| | 45.6 |
| | 47.3 |
| | 47.2 |
|
| Total Loss Reserves | | 174.7 |
| | 179.2 |
| | 178.3 |
| | 182.0 |
| | 178.2 |
|
| LAE Reserves | | 36.0 |
| | 36.7 |
| | 37.3 |
| | 40.3 |
| | 41.3 |
|
| Insurance Reserves | | $ | 210.7 |
| | $ | 215.9 |
| | $ | 215.6 |
| | $ | 222.3 |
| | $ | 219.5 |
|
Kemper Corporation Kemper Direct (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Results of Operations | | | | | | | | | | |
| Net premiums written | | $ | 31.2 |
| | $ | 31.8 |
| | $ | 35.9 |
| | $ | 35.7 |
| | $ | 43.9 |
|
| Earned Premiums: | | | | | | | | | | |
| Automobile | | $ | 31.5 |
| | $ | 34.4 |
| | $ | 37.9 |
| | $ | 41.5 |
| | $ | 44.5 |
|
| Homeowners | | 2.2 |
| | 2.3 |
| | 2.4 |
| | 2.4 |
| | 2.4 |
|
| Other Personal | | — |
| | 0.1 |
| | — |
| | — |
| | 0.1 |
|
| Total Earned Premiums | | 33.7 |
| | 36.8 |
| | 40.3 |
| | 43.9 |
| | 47.0 |
|
| Net Investment Income | | 3.8 |
| | 3.2 |
| | 3.4 |
| | 3.7 |
| | 3.6 |
|
| Total Revenues | | 37.5 |
| | 40.0 |
| | 43.7 |
| | 47.6 |
| | 50.6 |
|
| Incurred Losses and LAE related to: | | | | | | | | | | |
| Current Year: | | | | | | | | | | |
| Non-catastrophe Losses and LAE | | 24.5 |
| | 27.5 |
| | 33.8 |
| | 37.9 |
| | 39.8 |
|
| Catastrophe Losses and LAE | | 0.6 |
| | 3.5 |
| | 0.4 |
| | 2.3 |
| | 2.1 |
|
| Prior Years: | | | | | | | | | | |
| Non-catastrophe Losses and LAE | | (5.8 | ) | | (6.2 | ) | | (5.3 | ) | | (2.1 | ) | | (3.9 | ) |
| Catastrophe Losses and LAE | | (0.2 | ) | | (0.1 | ) | | (0.1 | ) | | (0.1 | ) | | — |
|
| Total Incurred Losses and LAE | | 19.1 |
| | 24.7 |
| | 28.8 |
| | 38.0 |
| | 38.0 |
|
| Insurance Expenses | | 8.8 |
| | 13.2 |
| | 13.3 |
| | 15.1 |
| | 15.6 |
|
| Operating Profit (Loss) | | 9.6 |
| | 2.1 |
| | 1.6 |
| | (5.5 | ) | | (3.0 | ) |
| Income Tax Benefit (Expense) | | (2.9 | ) | | (0.3 | ) | | (0.1 | ) | | 2.6 |
| | 1.7 |
|
| Segment Net Operating Income (Loss) | | $ | 6.7 |
| | $ | 1.8 |
| | $ | 1.5 |
| | $ | (2.9 | ) | | $ | (1.3 | ) |
| Ratios Based On Earned Premiums | | | | | | | | | | |
| Current Year Non-catastrophe Losses and LAE Ratio | | 72.7 | % | | 74.7 | % | | 83.9 | % | | 86.4 | % | | 84.7 | % |
| Current Year Catastrophe Losses and LAE Ratio | | 1.8 |
| | 9.5 |
| | 1.0 |
| | 5.2 |
| | 4.5 |
|
| Prior Years Non-catastrophe Losses and LAE Ratio | | (17.2 | ) | | (16.8 | ) | | (13.2 | ) | | (4.8 | ) | | (8.3 | ) |
| Prior Years Catastrophe Losses and LAE Ratio | | (0.6 | ) | | (0.3 | ) | | (0.2 | ) | | (0.2 | ) | | — |
|
| Total Incurred Loss and LAE Ratio | | 56.7 |
| | 67.1 |
| | 71.5 |
| | 86.6 |
| | 80.9 |
|
| Incurred Expense Ratio | | 26.1 |
| | 35.9 |
| | 33.0 |
| | 34.4 |
| | 33.2 |
|
| Combined Ratio | | 82.8 | % | | 103.0 | % | | 104.5 | % | | 121.0 | % | | 114.1 | % |
Underlying Combined Ratio 1 | | | | | | | | | | |
| Current Year Non-catastrophe Losses and LAE Ratio | | 72.7 | % | | 74.7 | % | | 83.9 | % | | 86.4 | % | | 84.7 | % |
| Incurred Expense Ratio | | 26.1 |
| | 35.9 |
| | 33.0 |
| | 34.4 |
| | 33.2 |
|
| Underlying Combined Ratio | | 98.8 | % | | 110.6 | % | | 116.9 | % | | 120.8 | % | | 117.9 | % |
| Non-GAAP Measure Reconciliation | | | | | | | | | | |
| Underlying Combined Ratio | | 98.8 | % | | 110.6 | % | | 116.9 | % | | 120.8 | % | | 117.9 | % |
| Current Year Catastrophe Losses and LAE Ratio | | 1.8 |
| | 9.5 |
| | 1.0 |
| | 5.2 |
| | 4.5 |
|
| Prior Years Non-catastrophe Losses and LAE Ratio | | (17.2 | ) | | (16.8 | ) | | (13.2 | ) | | (4.8 | ) | | (8.3 | ) |
| Prior Years Catastrophe Losses and LAE Ratio | | (0.6 | ) | | (0.3 | ) | | (0.2 | ) | | (0.2 | ) | | — |
|
| Combined Ratio as Reported | | 82.8 | % | | 103.0 | % | | 104.5 | % | | 121.0 | % | | 114.1 | % |
| | | | | | | | | | | |
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. |
Kemper Corporation Kemper Direct Insurance Reserves (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Mar 31, 2013 | | Dec 31, 2012 | | Sep 30, 2012 | | Jun 30, 2012 | | Mar 31, 2012 |
| Insurance Reserves: | | | | | | | | | | |
| Automobile | | $ | 164.6 |
| | $ | 173.3 |
| | $ | 191.7 |
| | $ | 200.8 |
| | $ | 208.1 |
|
| Homeowners | | 1.9 |
| | 2.7 |
| | 4.3 |
| | 4.9 |
| | 5.1 |
|
| Other Personal | | 1.6 |
| | 1.8 |
| | 2.0 |
| | 2.7 |
| | 2.7 |
|
| Insurance Reserves | | $ | 168.1 |
| | $ | 177.8 |
| | $ | 198.0 |
| | $ | 208.4 |
| | $ | 215.9 |
|
| Insurance Reserves: | | | | | | | | | | |
| Loss Reserves: | | | | | | | | | | |
| Case | | $ | 108.8 |
| | $ | 115.4 |
| | $ | 126.0 |
| | $ | 131.5 |
| | $ | 137.0 |
|
| Incurred but Not Reported | | 39.0 |
| | 39.7 |
| | 46.8 |
| | 50.5 |
| | 51.5 |
|
| Total Loss Reserves | | 147.8 |
| | 155.1 |
| | 172.8 |
| | 182.0 |
| | 188.5 |
|
| LAE Reserves | | 20.3 |
| | 22.7 |
| | 25.2 |
| | 26.4 |
| | 27.4 |
|
| Insurance Reserves | | $ | 168.1 |
| | $ | 177.8 |
| | $ | 198.0 |
| | $ | 208.4 |
| | $ | 215.9 |
|
Kemper Corporation Life and Health Insurance (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Results of Operations | | | | | | | | | | |
| Earned Premiums: | | | | | | | | | | |
| Life | | $ | 97.9 |
| | $ | 97.4 |
| | $ | 98.4 |
| | $ | 99.1 |
| | $ | 98.5 |
|
| Accident and Health | | 40.2 |
| | 41.0 |
| | 41.3 |
| | 41.4 |
| | 41.5 |
|
| Property | | 19.7 |
| | 19.6 |
| | 20.5 |
| | 20.8 |
| | 20.4 |
|
| Total Earned Premiums | | 157.8 |
| | 158.0 |
| | 160.2 |
| | 161.3 |
| | 160.4 |
|
| Net Investment Income | | 53.0 |
| | 50.8 |
| | 48.1 |
| | 49.7 |
| | 55.7 |
|
| Other Income | | — |
| | — |
| | — |
| | — |
| | 0.1 |
|
| Total Revenues | | 210.8 |
| | 208.8 |
| | 208.3 |
| | 211.0 |
| | 216.2 |
|
| Policyholders’ Benefits and Incurred Losses and LAE | | 102.9 |
| | 92.9 |
| | 96.7 |
| | 102.9 |
| | 100.6 |
|
| Insurance Expenses | | 76.0 |
| | 78.2 |
| | 82.2 |
| | 77.8 |
| | 72.6 |
|
| Operating Profit | | 31.9 |
| | 37.7 |
| | 29.4 |
| | 30.3 |
| | 43.0 |
|
| Income Tax Expense | | (10.7 | ) | | (13.4 | ) | | (10.2 | ) | | (10.8 | ) | | (15.2 | ) |
| Segment Net Operating Income | | $ | 21.2 |
| | $ | 24.3 |
| | $ | 19.2 |
| | $ | 19.5 |
| | $ | 27.8 |
|
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | |
| | | Mar 31, 2013 | | Dec 31, 2012 | | Sep 30, 2012 | | Jun 30, 2012 | | Mar 31, 2012 |
| Insurance Reserves: | | | | | | | | | | |
| Future Policyholder Benefits | | $ | 3,119.4 |
| | $ | 3,103.1 |
| | $ | 3,093.4 |
| | $ | 3,078.1 |
| | $ | 3,062.7 |
|
| Incurred Losses and LAE Reserves: | | | | | | | | | | |
| Life | | 35.0 |
| | 36.8 |
| | 34.7 |
| | 30.7 |
| | 32.7 |
|
| Accident and Health | | 20.4 |
| | 21.7 |
| | 21.7 |
| | 21.8 |
| | 22.4 |
|
| Property | | 8.0 |
| | 7.0 |
| | 10.5 |
| | 10.1 |
| | 8.0 |
|
| Total Incurred Losses and LAE Reserves | | 63.4 |
| | 65.5 |
| | 66.9 |
| | 62.6 |
| | 63.1 |
|
| Insurance Reserves | | $ | 3,182.8 |
| | $ | 3,168.6 |
| | $ | 3,160.3 |
| | $ | 3,140.7 |
| | $ | 3,125.8 |
|
Kemper Corporation Details of Investment Performance (Dollars and Shares in Millions, Except Per Share Amounts) |
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Net Investment Income | | | | | | | | | | |
| Interest and Dividends on Fixed Maturities | | $ | 59.1 |
| | $ | 60.4 |
| | $ | 59.7 |
| | $ | 63.8 |
| | $ | 62.2 |
|
| Dividends on Equity Securities | | 8.8 |
| | 7.0 |
| | 7.3 |
| | 6.2 |
| | 5.2 |
|
| Short-term Investments | | — |
| | — |
| | 0.1 |
| | 0.1 |
| | — |
|
| Loans to Policyholders | | 4.9 |
| | 4.9 |
| | 4.7 |
| | 4.6 |
| | 4.7 |
|
| Real Estate | | 7.4 |
| | 7.4 |
| | 7.0 |
| | 6.6 |
| | 6.4 |
|
| Equity Method Limited Liability Investments | | 8.6 |
| | 2.1 |
| | (0.6 | ) | | 1.1 |
| | 6.7 |
|
| Other | | — |
| | 0.1 |
| | (0.1 | ) | | 0.1 |
| | — |
|
| Total Investment Income | | 88.8 |
| | 81.9 |
| | 78.1 |
| | 82.5 |
| | 85.2 |
|
| Investment Expenses: | | | | | | | | | | |
| Real Estate | | 6.3 |
| | 7.3 |
| | 6.4 |
| | 6.1 |
| | 6.3 |
|
| Other Investment Expenses | | 1.7 |
| | 1.7 |
| | 1.3 |
| | 1.2 |
| | 1.5 |
|
| Total Investment Expenses | | 8.0 |
| | 9.0 |
| | 7.7 |
| | 7.3 |
| | 7.8 |
|
| Net Investment Income | | $ | 80.8 |
| | $ | 72.9 |
| | $ | 70.4 |
| | $ | 75.2 |
| | $ | 77.4 |
|
| Net Realized Gains on Sales of Investments | | | | | | | | | | |
| Fixed Maturities: | | | | | | | | | | |
| Gains on Sales | | $ | 25.7 |
| | $ | 1.7 |
| | $ | 50.7 |
| | $ | 4.1 |
| | $ | 0.4 |
|
| Losses on Sales | | — |
| | — |
| | (0.1 | ) | | — |
| | — |
|
| Equity Securities: | | | | | | | | | | |
| Gains on Sales | | 0.4 |
| | 3.6 |
| | 0.1 |
| | 0.5 |
| | 4.1 |
|
| Losses on Sales | | (0.1 | ) | | — |
| | — |
| | (0.2 | ) | | — |
|
| Real Estate: | | | | | | | | | | |
| Gains on Sales | | 0.6 |
| | 0.2 |
| | — |
| | — |
| | — |
|
| Other Investments: | | | | | | | | | | |
| Gains on Sales | | 0.1 |
| | — |
| | — |
| | — |
| | — |
|
| Trading Securities Net Gains (Losses) | | 0.2 |
| | — |
| | 0.2 |
| | (0.3 | ) | | 0.4 |
|
| Net Realized Gains on Sales of Investments | | $ | 26.9 |
| | $ | 5.5 |
| | $ | 50.9 |
| | $ | 4.1 |
| | $ | 4.9 |
|
| Net Impairment Losses Recognized in Earnings | | | | | | | | | | |
| Fixed Maturities | | $ | (1.7 | ) | | $ | (1.5 | ) | | $ | — |
| | $ | (0.4 | ) | | $ | — |
|
| Equity Securities | | (0.2 | ) | | (1.3 | ) | | (0.1 | ) | | — |
| | (0.5 | ) |
| Real Estate | | — |
| | — |
| | (3.1 | ) | | — |
| | — |
|
| Net Impairment Losses Recognized in Earnings | | $ | (1.9 | ) | | $ | (2.8 | ) | | $ | (3.2 | ) | | $ | (0.4 | ) | | $ | (0.5 | ) |
| | | | | | | | | | | |
Kemper Corporation Details of Invested Assets (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | | |
| | | Mar 31, 2013 | | Dec 31, 2012 | | Dec 31, 2011 |
| | | 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 | | $ | 429.1 |
| | 6.6 | % | | $ | 428.9 |
| | 6.6 | % | | $ | 491.7 |
| | 7.9 | % |
| States and Political Subdivisions | | 1,401.8 |
| | 21.5 |
| | 1,401.4 |
| | 21.7 |
| | 1,852.6 |
| | 29.8 |
|
| Canadian Government and Provinces | | 0.6 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Corporate Securities: | | | |
| | | |
| | | |
|
| Bonds and Notes | | 2,979.1 |
| | 45.7 |
| | 2,993.4 |
| | 46.3 |
| | 2,342.3 |
| | 37.6 |
|
| Redeemable Preferred Stocks | | 13.0 |
| | 0.2 |
| | 32.6 |
| | 0.5 |
| | 81.7 |
| | 1.3 |
|
| Mortgage and Asset-backed | | 32.9 |
| | 0.5 |
| | 3.9 |
| | 0.1 |
| | 5.1 |
| | 0.1 |
|
| Subtotal Fixed Maturities Reported at Fair Value | | 4,856.5 |
| | 74.5 |
| | 4,860.2 |
| | 75.2 |
| | 4,773.4 |
| | 76.7 |
|
| Equity Securities Reported at Fair Value: | | | | | | | | | | | | |
| Preferred Stocks | | 95.3 |
| | 1.5 |
| | 100.5 |
| | 1.6 |
| | 107.2 |
| | 1.7 |
|
| Common Stocks | | 159.8 |
| | 2.5 |
| | 154.2 |
| | 2.4 |
| | 130.4 |
| | 2.1 |
|
| Other Equity Interests: | | | | | | | | | | | | |
| Exchange Traded Funds | | 155.1 |
| | 2.4 |
| | 125.9 |
| | 1.9 |
| | 66.6 |
| | 1.1 |
|
| Limited Liability Companies and Limited Partnerships | | 143.9 |
| | 2.2 |
| | 141.3 |
| | 2.2 |
| | 93.1 |
| | 1.5 |
|
| Subtotal Equity Securities Reported at Fair Value | | 554.1 |
| | 8.5 |
| | 521.9 |
| | 8.1 |
| | 397.3 |
| | 6.4 |
|
| Equity Method Limited Liability Investments | | 248.1 |
| | 3.8 |
| | 253.0 |
| | 3.9 |
| | 306.3 |
| | 4.9 |
|
| Short-term Investments at Cost which Approximates Fair Value | | 362.8 |
| | 5.6 |
| | 327.5 |
| | 5.1 |
| | 247.4 |
| | 4.0 |
|
| Other Investments: | | | | | | | | | | | | |
| Loans to Policyholders at Unpaid Principal | | 268.3 |
| | 4.1 |
| | 266.3 |
| | 4.1 |
| | 253.9 |
| | 4.1 |
|
| Real Estate at Depreciated Cost | | 221.3 |
| | 3.4 |
| | 226.2 |
| | 3.5 |
| | 239.4 |
| | 3.8 |
|
| Trading Securities at Fair Value | | 4.6 |
| | 0.1 |
| | 4.5 |
| | 0.1 |
| | 4.4 |
| | 0.1 |
|
| Other | | 0.6 |
| | — |
| | 0.5 |
| | — |
| | 0.6 |
| | — |
|
| Subtotal Other Investments | | 494.8 |
| | 7.6 |
| | 497.5 |
| | 7.7 |
| | 498.3 |
| | 8.0 |
|
| Total Investments | | $ | 6,516.3 |
| | 100.0 | % | | $ | 6,460.1 |
| | 100.0 | % | | $ | 6,222.7 |
| | 100.0 | % |
| S&P Equivalent Rating for Fixed Maturities | | | | | | | | | | | | |
| AAA, AA, A | | $ | 3,359.3 |
| | 69.2 | % | | $ | 3,319.1 |
| | 68.3 | % | | $ | 3,591.8 |
| | 75.2 | % |
| BBB | | 1,185.5 |
| | 24.4 |
| | 1,199.0 |
| | 24.7 |
| | 839.4 |
| | 17.6 |
|
| BB, B | | 121.7 |
| | 2.5 |
| | 158.9 |
| | 3.3 |
| | 197.7 |
| | 4.1 |
|
| CCC or Lower | | 190.0 |
| | 3.9 |
| | 183.2 |
| | 3.8 |
| | 144.5 |
| | 3.0 |
|
| Total Investments in Fixed Maturities | | $ | 4,856.5 |
| | 100.0 | % | | $ | 4,860.2 |
| | 100.0 | % | | $ | 4,773.4 |
| | 100.0 | % |
| Duration (in Years) | | | | | | | | | | | | |
| Total Investments in Fixed Maturities | | 7.1 |
| | | | 7.1 |
| | | | 7.4 |
| | |
| | | | | | | | | | | | | |
1 Sum of percentages for individual lines does not equal subtotals and grand total due to rounding. | | | | | | |
Kemper Corporation Investment Concentration (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | | |
| | | Mar 31, 2013 | | Dec 31, 2012 | | Dec 31, 2011 |
| 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 | | $ | 1,318.0 |
| | 20.2 | % | | $ | 1,371.1 |
| | 21.2 | % | | $ | 1,153.1 |
| | 18.5 | % |
| Finance, Insurance and Real Estate | | 801.5 |
| | 12.3 |
| | 780.8 |
| | 12.1 |
| | 590.4 |
| | 9.5 |
|
| Transportation, Communication and Utilities | | 300.1 |
| | 4.6 |
| | 289.2 |
| | 4.5 |
| | 252.2 |
| | 4.1 |
|
| Services | | 291.4 |
| | 4.5 |
| | 298.6 |
| | 4.6 |
| | 233.8 |
| | 3.8 |
|
| Mining | | 151.5 |
| | 2.3 |
| | 143.4 |
| | 2.2 |
| | 89.6 |
| | 1.4 |
|
| Wholesale Trade | | 69.9 |
| | 1.1 |
| | 57.8 |
| | 0.9 |
| | 41.5 |
| | 0.7 |
|
| Retail Trade | | 65.9 |
| | 1.0 |
| | 66.5 |
| | 1.0 |
| | 50.1 |
| | 0.8 |
|
| Agriculture, Forestry and Fishing | | 19.0 |
| | 0.3 |
| | 19.2 |
| | 0.3 |
| | 17.8 |
| | 0.3 |
|
| Other | | 7.7 |
| | 0.1 |
| | 3.3 |
| | 0.1 |
| | 0.6 |
| | — |
|
| Total Fair Value of Non-governmental Fixed Maturities | | $ | 3,025.0 |
| | 46.4 | % | | $ | 3,029.9 |
| | 46.9 | % | | $ | 2,429.1 |
| | 39.1 | % |
|
| | | | | | | | | |
| | | | | Mar 31, 2013 |
Ten Largest Investment Exposures 1 | | Fair Value | | Percent of Total Investments |
| Fixed Maturities: | | | | |
| States and Political Subdivisions: | | | | |
| Texas | | $ | 84.1 |
| | 1.3 | % |
| Georgia | | 68.3 |
| | 1.0 |
|
| Colorado | | 62.7 |
| | 1.0 |
|
| Washington | | 53.1 |
| | 0.8 |
|
| Maryland | | 51.2 |
| | 0.8 |
|
| Ohio | | 50.8 |
| | 0.8 |
|
| Equity Securities: | | | | |
| iShares® iBoxx $ Investment Grade Corporate Bond Fund | | 100.1 |
| | 1.5 |
|
| Equity Method Limited Liability Investments: | | | | |
| Tennenbaum Opportunities Fund V, LLC | | 72.3 |
| | 1.1 |
|
| Goldman Sachs Vintage Fund IV, L.P. | | 59.6 |
| | 0.9 |
|
| Special Value Opportunities Fund, LLC | | 51.4 |
| | 0.8 |
|
| Total | | $ | 653.6 |
| | 10.0 | % |
| |
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 Held in Trust at March 31, 2013. |
Kemper Corporation Municipal Bond Securities excluding Pre-refunded with U.S. Government Held in Trust (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | | | | | | | |
| | | Mar 31, 2013 |
| | | State General Obligation | | Political Subdivision General Obligation | | Revenue | | Total Fair Value | | Percent of Total Muni Bond1 | | Percent of Total Investments1 |
| Texas | | $ | 42.5 |
| | $ | 14.3 |
| | $ | 27.3 |
| | $ | 84.1 |
| | 7.4 | % | | 1.3 | % |
| Georgia | | 50.2 |
| | 7.2 |
| | 10.9 |
| | 68.3 |
| | 6.0 |
| | 1.0 |
|
| Colorado | | — |
| | 20.9 |
| | 41.8 |
| | 62.7 |
| | 5.5 |
| | 1.0 |
|
| Washington | | 28.4 |
| | 0.3 |
| | 24.4 |
| | 53.1 |
| | 4.7 |
| | 0.8 |
|
| Maryland | | 34.6 |
| | 12.9 |
| | 3.7 |
| | 51.2 |
| | 4.5 |
| | 0.8 |
|
| Ohio | | 16.1 |
| | 5.0 |
| | 29.7 |
| | 50.8 |
| | 4.5 |
| | 0.8 |
|
| Louisiana | | 31.6 |
| | 1.5 |
| | 14.9 |
| | 48.0 |
| | 4.2 |
| | 0.7 |
|
| Wisconsin | | 37.7 |
| | 7.2 |
| | 1.5 |
| | 46.4 |
| | 4.1 |
| | 0.7 |
|
| New York | | 6.6 |
| | — |
| | 33.3 |
| | 39.9 |
| | 3.5 |
| | 0.6 |
|
| Florida | | 34.4 |
| | — |
| | 0.1 |
| | 34.5 |
| | 3.0 |
| | 0.5 |
|
| Oregon | | 30.7 |
| | — |
| | — |
| | 30.7 |
| | 2.7 |
| | 0.5 |
|
| Connecticut | | 24.9 |
| | — |
| | 5.6 |
| | 30.5 |
| | 2.7 |
| | 0.5 |
|
| North Carolina | | 6.4 |
| | 4.0 |
| | 19.8 |
| | 30.2 |
| | 2.7 |
| | 0.5 |
|
| Mississippi | | 25.3 |
| | — |
| | 4.4 |
| | 29.7 |
| | 2.6 |
| | 0.5 |
|
| Delaware | | 18.5 |
| | — |
| | 9.8 |
| | 28.3 |
| | 2.5 |
| | 0.4 |
|
| Indiana | | — |
| | — |
| | 28.2 |
| | 28.2 |
| | 2.5 |
| | 0.4 |
|
| Virginia | | — |
| | 20.2 |
| | 7.3 |
| | 27.5 |
| | 2.4 |
| | 0.4 |
|
| South Carolina | | 23.9 |
| | 3.2 |
| | — |
| | 27.1 |
| | 2.4 |
| | 0.4 |
|
| Nevada | | 23.9 |
| | 1.2 |
| | — |
| | 25.1 |
| | 2.2 |
| | 0.4 |
|
| Utah | | 12.0 |
| | — |
| | 11.2 |
| | 23.2 |
| | 2.0 |
| | 0.4 |
|
| Massachusetts | | — |
| | — |
| | 22.6 |
| | 22.6 |
| | 2.0 |
| | 0.3 |
|
| Arkansas | | 21.9 |
| | — |
| | — |
| | 21.9 |
| | 1.9 |
| | 0.3 |
|
| Pennsylvania | | 12.7 |
| | 7.8 |
| | 0.3 |
| | 20.8 |
| | 1.8 |
| | 0.3 |
|
| New Jersey | | — |
| | — |
| | 20.0 |
| | 20.0 |
| | 1.8 |
| | 0.3 |
|
| Missouri | | — |
| | — |
| | 19.8 |
| | 19.8 |
| | 1.7 |
| | 0.3 |
|
| Iowa | | — |
| | — |
| | 17.9 |
| | 17.9 |
| | 1.6 |
| | 0.3 |
|
| Kentucky | | — |
| | 1.1 |
| | 16.0 |
| | 17.1 |
| | 1.5 |
| | 0.3 |
|
| Hawaii | | 15.9 |
| | — |
| | — |
| | 15.9 |
| | 1.4 |
| | 0.2 |
|
| Tennessee | | 4.5 |
| | 7.9 |
| | 3.5 |
| | 15.9 |
| | 1.4 |
| | 0.2 |
|
| Arizona | | — |
| | 3.1 |
| | 10.3 |
| | 13.4 |
| | 1.2 |
| | 0.2 |
|
| Michigan | | — |
| | — |
| | 12.8 |
| | 12.8 |
| | 1.1 |
| | 0.2 |
|
| Nebraska | | — |
| | 7.4 |
| | 5.4 |
| | 12.8 |
| | 1.1 |
| | 0.2 |
|
| District of Columbia | | — |
| | — |
| | 12.3 |
| | 12.3 |
| | 1.1 |
| | 0.2 |
|
| Oklahoma | | — |
| | — |
| | 11.4 |
| | 11.4 |
| | 1.0 |
| | 0.2 |
|
| California | | 2.2 |
| | — |
| | 9.1 |
| | 11.3 |
| | 1.0 |
| | 0.2 |
|
| Rhode Island | | 10.7 |
| | — |
| | — |
| | 10.7 |
| | 0.9 |
| | 0.2 |
|
| West Virginia | | 9.7 |
| | — |
| | — |
| | 9.7 |
| | 0.9 |
| | 0.1 |
|
| Minnesota | | 1.8 |
| | 4.5 |
| | 2.0 |
| | 8.3 |
| | 0.7 |
| | 0.1 |
|
| All Other States | | 12.7 |
| | 3.4 |
| | 21.8 |
| | 37.9 |
| | 3.3 |
| | 0.6 |
|
Total (1) | | $ | 539.8 |
| | $ | 133.1 |
| | $ | 459.1 |
| | $ | 1,132.0 |
| | 100.0 | % | | 17.4 | % |
| | | | | | | | | | | | | |
1 Sum of percentages for individual lines does not equal total due to rounding. | | | | | | |
Kemper Corporation Investments in Limited Liability Investment Companies and Limited Partnerships (Dollars in Millions) (Unaudited) |
| | | | | | | | | | | | | | | | |
| | | | | Unfunded Commitment | | Reported Value | | Stated Fund |
| | | Asset Class | | Mar 31,
2013 | | Mar 31,
2013 | | Dec 31,
2012 | | End Date |
| Reported as Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings: | | | | | | | | | | |
| Tennenbaum Opportunities Fund V, LLC | | Distressed Debt | | $ | — |
| | $ | 72.3 |
| | $ | 69.9 |
| | 10/10/16 |
| Goldman Sachs Vintage Fund IV, LP | | Secondary Transactions | | 17.1 |
| | 59.6 |
| | 58.9 |
| | 12/31/16 |
| Special Value Opportunities Fund, LLC | | Distressed Debt | | — |
| | 51.4 |
| | 59.4 |
| | 07/13/16 |
| BNY Mezzanine - Alcentra Partners III, LP | | Mezzanine Debt | | 22.3 |
| | 21.9 |
| | 18.9 |
| | 2021-2022 |
| BNY Mezzanine Partners, LP | | Mezzanine Debt | | 0.4 |
| | 9.1 |
| | 9.2 |
| | 04/17/16 |
| Ziegler Meditech Equity Partners, LP | | Growth Equity | | — |
| | 8.6 |
| | 8.9 |
| | 01/31/16 |
| NYLIM Mezzanine Partners II, LP | | Mezzanine Debt | | 4.0 |
| | 8.1 |
| | 10.3 |
| | 07/31/16 |
| Other Funds | | | | 8.3 |
| | 17.1 |
| | 17.5 |
| | Various |
| Total Equity Method Limited Liability Investments | | | | 52.1 |
| | 248.1 |
| | 253.0 |
| | |
| Reported as Other Equity Interests and Reported at Fair Value: | | | | | | | | | | |
| Highbridge Principal Strategies Mezzanine Partners, LP | | Mezzanine Debt | | 2.4 |
| | 20.3 |
| | 22.1 |
| | 01/23/18 |
| Goldman Sachs Vintage Fund V, LP | | Secondary Transactions | | 5.9 |
| | 13.9 |
| | 13.7 |
| | 12/31/18 |
| Highbridge Principal Strategies Credit Opportunities Fund, LP | | Hedge Fund | | — |
| | 11.2 |
| | 11.0 |
| | 12/29/21 |
| GS Mezzanine Partners V, LP | | Mezzanine Debt | | 14.7 |
| | 8.0 |
| | 9.3 |
| | 12/31/21 |
| Other | | | | 74.3 |
| | 90.5 |
| | 85.2 |
| | Various |
| Total Reported as Other Equity Interests and Reported at Fair Value | | | | 97.3 |
| | 143.9 |
| | 141.3 |
| | |
| Total | | | | $ | 149.4 |
| | $ | 392.0 |
| | $ | 394.3 |
| | |
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.
Combined Property and Casualty Operations is a non-GAAP financial measure, which is comprised of the Kemper Preferred, Kemper Specialty and Kemper Direct segments.
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 (Losses) on Sales of Investments, 2) Net Impairment Losses Recognized in Earnings related to investments and 3) other 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 (Losses) 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. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.
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,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Consolidated Net Operating Income (Loss) | | $ | 42.3 |
| | $ | (3.4 | ) | | $ | 24.6 |
| | $ | (0.8 | ) | | $ | 33.4 |
|
| Net Income (Loss) From: | | | | | | | | | | |
| Net Realized Gains on Sales of Investments | | 17.5 |
| | 3.6 |
| | 33.0 |
| | 2.7 |
| | 3.2 |
|
| Net Impairment Losses Recognized in Earnings | | (1.2 | ) | | (1.9 | ) | | (2.0 | ) | | (0.3 | ) | | (0.3 | ) |
| Income (Loss) from Continuing Operations | | $ | 58.6 |
| | $ | (1.7 | ) | | $ | 55.6 |
| | $ | 1.6 |
| | $ | 36.3 |
|
| | | | | | | | | | | |
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 to Income (Loss) from Continuing Operations Per Unrestricted Share is presented below:
|
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| Dollars in Millions (Unaudited) | | Mar 31,
2013 | | Dec 31,
2012 | | Sep 30,
2012 | | Jun 30,
2012 | | Mar 31,
2012 |
| Consolidated Net Operating Income (Loss) Per Unrestricted Share | | $ | 0.72 |
| | $ | (0.06 | ) | | $ | 0.42 |
| | $ | (0.01 | ) | | $ | 0.56 |
|
| Net Income (Loss) Per Unrestricted Share From: | | | | | | | | | | |
| Net Realized Gains on Sales of Investments | | 0.30 |
| | 0.06 |
| | 0.56 |
| | 0.05 |
| | 0.05 |
|
| Net Impairment Losses Recognized in Earnings | | (0.02 | ) | | (0.03 | ) | | (0.03 | ) | | (0.01 | ) | | — |
|
| Income (Loss) from Continuing Operations Per Unrestricted Share | | $ | 1.00 |
| | $ | (0.03 | ) | | $ | 0.95 |
| | $ | 0.03 |
| | $ | 0.61 |
|
| | | | | | | | | | | |
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 Incurred Expense Ratio. The most directly comparable GAAP financial measure is the combined ratio, which uses total incurred losses and LAE, including the impact of catastrophe losses, and loss and LAE reserve development. 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.
