KMPR - Earnings call transcript Q4 2019

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Operator

Good afternoon, ladies and gentlemen, and welcome to Kemper’s Fourth Quarter 2019 Earnings Conference Call. My name is Sean and I will be your coordinator today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, the conference call is being recorded for replay purposes.

to Vice host President like Christine today’s now Kemper’s Patrick, of would introduce for your call, I Investor Relations. Ms. begin. may you Patrick,

Christine Patrick

Casualty Thank the McKinney, XXXX and Executive everyone, President. of afternoon, Kemper’s Financial President Division hear you, Officer; to Executive Lacher, Property Vice Sean. discussion Officer; Vice President Chief Kemper’s Chief Jim from and Joe Kemper’s our Executive This President Duane results. welcome quarter & Sanders, and and afternoon, Kemper’s you’ll fourth Good and

We’ll full then provide a quarter the make remarks around context to for a few year opening our fourth question-and-answer call open and session. and results, up

Mark During & our Kemper’s Green, presenters Vice the President John Health call, and Boschelli, of Executive by interactive the will Vice Division be and Chief President. Kemper’s and portion Executive Life joined President Officer; Investment

close and release about financial our markets on the our the presentation published We SEC our this Form intend afternoon, issued and quarter to XX. file earnings with supplement. we earnings After XX-K February fourth or

You section kemper.com. of can our the Investors on at website, these documents find

Our contain may forward-looking discussion statements. today

differ may materially these statements. results actual Our from

earnings For as our refer fourth as XXXX XX-K, relying potential well associated release. XXXX forward-looking to statements, Form quarter risks information on on please our with

Acquisition. the measures results, Kemper to is discussion I reported One for Infinity are such is clearly afternoon’s would again our that measure important the understand including like includes This It non-GAAP meaningful acquisition also Adjusted overall. financial As that believe to we to investors. impact to has highlight

Infinity’s purchase underlying the include our the our as-reported results performance the and in historical the not visible. include organic Since the trends expressed current impact of combined interest an investors easily don’t to acquisition businesses. the of closing information prior also accounting, are understanding have However, of financials underlying

financials includes provide meaningful Infinity of provide removes periods insight information accounting performance and prior to acquisition. adjusted also businesses, combined year-over-year we of to of historical acquisition display purchase effort view a the easily comparison. underlying the impact more the the as closing into our for an In This for to

financial supplement, measures required, to have release, we the rules. and the our where In earnings in reconciled presentation accordance non-GAAP SEC all and with financial GAAP, defined

the each kemper.com. website our of these can of documents on find Investors section You at

to all references period, corresponding XXXX comparative Finally, will be otherwise the stated. unless

turn now over call I’ll the to Joe.

Joseph Lacher

afternoon, my Christine. X comments start thanks of you, Thank presentation. us I’ll Good everyone, today. referencing joining Page and our for

recent Before our few I’d developments. like on review we to results, touch a

success recognized our debt well We’re and senior performance, pleased as the recently financial X Infinity the from and management acquisition. our strength Fitch our strong to upgraded capabilities outlook rating. our A- have reaffirmed as revised agencies of the improved Kemper while BBB; company for AM positive to Best and holding the risk stable rating capitalization to A rating ratings key

per or Last of we $X.XX our demonstration announced another week, dividend. is X% the business over share the of increase previous model. increase quarter’s the The strength

of Director In week Gerry our XX. addition, that a elected we as Laderman Board Directors effective last has announced February

experience His and grow. as Financial an current of be and Airlines. Board complements Vice the will the currently to serves Officer as financial and President Gerry United Chief to continue company expertise we Executive our asset

working forward Kemper to looks with entire Our them. team

measure a both ratio, financial Now, financial our of portfolio get discussion talking non-financial when performance. turn doesn’t We We just the but range and wish wide the of the results. questions to about our utilize let’s a operate to I combined tell as be we the how success Specialty investors, simple evaluate to a Often of full businesses. that company. story. could to it as metrics of

to few and a there and operating income overall we is that highlight manage metrics business use and I’ll net Obviously, growth. mind, our measure in this With success.

generation give intrinsic indication value time. cash book tangible in overall of and equity the of our performance value, over on a growth increasing business long-term this, good Beyond is return and how tangible

some metrics more few Jim of moments. these on in will a comment

discuss million adjusting on a the share Let’s some quarter which for on and of acquisition $X.XX net $XXX Infinity, per translates $XXX respectively. specifics or this a fourth income million basis was quarter. to $X.XX The

Growth excluding book return XX%. unrealized value in gains tangible we on gains And per equity was tangible share XX%. generated of unrealized excluding

of to Our and ability model. the level business of strength and to our generate this return business speaks performance

of growth driven combined quarter. Recently, by profitability of a important and agree, premiums to XX% this generally the Standard ratio segment for as all and Preferred which increasingly reported remains in competitive, we’ve heard is Earned strong, our XX% we Specialty while segments. Auto it’s know, described top-line the and exclusively Personal almost

Auto and from concentrated Specialty on insulated markets. nationally level market in is Standard the is and of less therefore competition Preferred somewhat we the The seen escalating focus

better increasing We our advantage. through are competition outperforming our cost our by needs and understanding customers’

We’re producing ratio. industry-leading growth and exceptional an combined

Our remain growth prospects strong.

this significantly expect focused we to segments faster population the customer We’re and than geographies U.S. growing on that focus continue. are and

to competitive our using Auto an store our This will, We’re opportunity, advantages additional enter new enhance is growth to further tailwind you prospects. geographies. if new Specialty

To Specialty have Auto. summarize, we significant competitive in advantages

very new Auto customer We’re than these Specialty are X future. are prospects geographies. uniquely foreseeable growing The faster the and positions in advantages for competitive segments growth the us in expand allowing and our attractive us to that in dynamics combination concentrated overall for geographies market the of

further in provide his Duane commentary on the will detail aforementioned.

work We results our Insurance towards improving segment. continue to in Preferred

our performance, and few past many changes of years, business introduced the to offer. results our of products enhance we’ve the turnaround operating the volatility we The improve continues. reduce Over this

cash to of overall stable delivered segment Health business. the valuable flow and & benefits diversification Life quarter strong earnings, Our another

in to our to I’ll more detail. that, Jim discuss over consolidated call the financial turn With results

James McKinney

call. income year $X Joe. afternoon to Good quarter. the was fourth prior $XXX everyone the on quarter Net you, million Thank for versus in the million

Excluding the net million. to purchase of consolidated adjusted impact grew $XXX income accounting,

Health our impacted This estimate, positively which business. & of benefit million was from Life a quarter after-tax was refinement CEI our $X to

double year. $XXX net the quarter, income the than the prior million For million more in was $XXX

accounting, outperformance Auto our Specialty $XXX net XX% is to segment consolidated by Excluding Life measures and grew & income the purchase The our the adjusted of segment. results Health in of in consistent increase million. the both primarily driven impact continued

On in the our Page operating performance these of increased a sources for basis. underlying sources volatility isolate has Adjusting year-over-year earnings. X, on we our of volatility, key

to Turning investment Page X% XXXX over the X. Total net $XX of income quarter fourth million. increased to

prior income owned compared the Our life corporate investments in line in year. through or $X.X $X.X million contributed insurance COLI with the million other

the is view year-over-year return book basis annualized And at continue a this was flat on to $XXX by asset we in assets of the We The X.X%. COLI quarter, attractive profile. having investment during increased million. our risk class portfolio yield

Page Moving to X.

are points We’re a value touched relative share, of that these not to per on. that business Together, handful return book and value turning capital These equity, point tangible deployment limited performance metrics growth closely. averages. to to Joe efficiency cash on market our and of a There reveal track tangible changes. include, we generation intrinsic the but are decisions

year, returns X%. and industry tangible per unrealized share on These unrealized XX%. the market in earned gains grew was value Return leading was represent excluding average with growth. gains above XX%, premiums tangible For book growth equity excluding

operating present X. Page upper hand parent the activities. from and Looking cash we flow In company corners, left liquidity and at lower

capital operating of present sub-XX% we leverage in million, a financial risk-based right cash a sheet greater of ratio, strong and balance capital flexibility side, have debt-to-capital $XXX position low $XXX our On we flow With and and strength ratios. the cost a liquidity, and substantial than million capital.

targets. Page and initial XX, we’re pleased revised we’ve report that On to exceeded our

financial review will we As the last targets the be we the with such, time this Infinity transaction. announced

business the Going combination operations further in benefits to forward, growth. additional invested will of profitable and in drive pricing be

written and million, more To and $XXX respectively, than earned target. $XXX above summarize, premiums are million

our target million. which of enhancement $XX is and above includes Our revised $XX million total savings synergies, yield cost to

many operating accretion of quarters have Duane a and We significant have Joe Infinity on has value customers. clearly strategic talked over the XX%. had about positive acquisition this the success. and earnings impact has our been for

As has above been homerun metrics companies’ this shareholders. for both a the financial also highlight,

strong are needs. to shareholders our closing, positioned to and well meet customer continue value growth In we to to deliver intrinsic

call to now Duane discuss segments. I’ll of turn the our results that, With to P&C over the

Duane Sanders

Thank you, Jim, and afternoon, everyone. good

another be of segment opportunity XX%. The growth XX. premiums strong as expense an underlying segment expense earned million and up to ratio ratio income profitably begin from to adjusted the the $XX agent of quarter’s million, can premium PIF on within with in reflected of increase relationships. combined acceleration by an expand delivered seen increasing in highlighted quarter $XXX commission Segment the Specialty of returns. XX% Let’s on Page benefit growth. reflects company as this prior and seized quarter impressive and Specialty A The portion this capture the year

that XX% of are and earned increased months line in quarter. in increased segment opportunities and year, full the of X% hand an have right underlying the existing the adjusted combined above population. of we reported million, side to you’ll advantage Infinity, prior of the of For Policies take $XXX continue average of upper geographies the for an ratio both XX%. rate force Adjusting with and as income X the target acquisition the overall number chart expanding third premiums segments growth the geographies. that year in the U.S. in and we on to Referring page, the growth note market

premium population past year. In accelerated has growth growth written over to the the also our in we Texas, the state, California, exceeds In well grew largest excess premiums rate. and growth X% state’s population significantly of rate. XX%, Florida That

grow almost has small, population. market. outside industry form to Also factors Hispanic of to expect market Specialty the to segment worth significant performance. tailwinds growth continue on of These operating set and a noting, and Hispanic X drive to population overall remains share our our we of significant that at focus times is our U.S. California a expected leading combined accelerating. the a is The Although, rate growth that

of XX. was ago Preferred Page the the Segment segment underlying ratio $X to combined an ratio combined $XX year XX% XX% of XX% underlying quarter income for quarter. with in on million of the with Turning an versus – million income

ratio an an was million million year, combined underlying versus XXXX. For ratio in million segment the of income full of income underlying million $XX with $XX $XX $XX of with combined

due favorable deteriorated Segment development. points. underlying ratio by fewer to in income increased X.X cat combined prior The losses year

new business this repositioning losses large by of in on is New short-term through track, quarter and early York of and broad business Prime largely were non-cat financial elevated results fourth hindered home. the XXXX Texas the While

in pressure. to its The market reinsurance. seen Turning pricing has challenges

and pleased X, inconsequential terms. rate tower an catastrophe significant no that renewed coverage with our and to January we changes are We reinsurance on aggregate increase

not our positioning where goals. this to be segment in strides profitability we want preferred volatility reach make we earnings While reducing in to we business, are continue and the to

back the Jim. call turn now I’ll to

James McKinney

you, Thank Duane.

our Life Turning to on & XX. Page results Health

of premiums. million a some $XX quarter, the year. history adjustments. for a distinct fourth results income $XX million This the of and In benefited For grew produced X%. long discrete year of premiums from earned declining change from full the segment CEI full income is The XXXX,

We’re P&C of Life significant to our to enhance to about organization, business grow optimistic the strategic the the The from diversification combination value capital ability core segment benefits the success of is further to profitably. this provide efficiency. and continue

to for that, call With back turn closing Joe I’ll remarks. the

Joseph Lacher

the ongoing they our Jim. delivering our Kemper value have the of and Thanks, efforts shareholders customers, what overall. employees ownership organization do I’d for of and The that to the team. employees, passion like our to our thank is outstanding entire

the the questions. your operator turn I’ll back call to to take Now,

Operator

you. Thank

Raymond come question-and-answer from [Operator first now will Please today will go James. session. ahead. begin We with Instructions] the Greg Peters Our question

Greg Peters

Good questions afternoon. you. couple of A for

going at more on growth the was all there you XX, growth helpful. of color be and in some of struck and about we’re the Texas, any it’s by California, perspective Florida about states So there. other looking or outside I including competitors challenges some I just on particular? substantial in Can region, comments states how your hearing expansion reporting give and us was some obviously, First because Slide Florida by would

Joseph Lacher

when will off modest we Yeah, more What sort go coming you individual perspective a tag-team expansion And tell little of a very states. base, little percentage Duane ask becomes so look Duane on they’re obviously overall large. at and that growth states, a those I’ll I’d to into I premium is bit, Greg.

thoughtfully other from us let we that point very cost We’re we could that We could in thought from our had for provided product good the existing geographies those would where we perspective. buffer we geographies. a that pricing a finding the that are states thought believe sufficient knowledge those and apply a and geographies we advantages a us enter starting

So them. we feel great about

meaningful carrier like in of new particular, Inside of had is couple was Access that we saw similar Florida problems with down Windhaven, environment. the their business one into some ago. a chunk There who heard pushing market, years competitive much and a and actually in out shut we challenges of there, the has

more because we And, and a great the aggressive been about candidly, have there. we’ve we good marketplace, little in and bit got a we we it competitive results feel think advantage

some being weight or may folks some moved market. in with hearing the be feeling you So our folks

Duane Sanders

of and gotten accordingly. in the strong in a Florida I time. But some than Yeah, some that, I We’ve other and we’ve has going – Greg, a been there on. fairly our on color spaces advantage understanding these I of in in competition we’ve add Duane. a that agree, of additional to mentioned, particular to for I’d lot this is got offering kind it. been by what’s of position where period we’ve of take don’t as these been don’t And, able slips know do Joe of states or

we’re also got in we’re we like of got, continuing states, what take where continue to got that. and push we’ve other we’ve feel growth where advantage and opportunity we presence, places on a And we’ve to some

the the reasons, we’re pretty for obvious the Texas we’re where we going. Florida good are and this, feeling where we’re about So watching particular and but

Greg Peters

I Excellent to Page a about combined and I appendix, about think the the there. Just prepared Thank comments, the XX XX? trends for you you wanted this bit Can answer. underlying the just color the spend to talked pivot ratio. I Page little a in in know in minute.

to example, the called a for think hit I for basis XXX agent point onetime expenses out, situation. relationship you

look about I results look Can give thinking fourth us – the quarter idea XXXX? quarter, year-over-year at for this an the to of I you comparison, how if to the should how relative as be I

James McKinney

Greg, great question.

forecast by of essentially metrics me trying about some what look would when Let think of of what start maybe to and us. our others the that top the full-year way, to loss kind the model saying, off side, results or at about are an you you’re would think be expense starting you might point to might this on, annual out for that similar pick, triangulating be I

the And look example, a little for see for If result fourth the for right, volatility the from third and last loss quarter bit year give [KA] perspective. quarter pick down. a for year is, our we business net similar see you I’ll and quarter of the an the while a pick, a [ph] quarter of at you that came loss from perspective,

business. basically in no change So, numbers there, same what’s those are of through terms the from perspective that a going loss

In this bit great both market to a of terms we a little of some the some further expenses, quarter. and relationships Windhaven some to opportunity quarter cement opportunity and a take advantage with agents with of last had others

else in might but drivers happy kind acquire. you with that. answer a Really questions other little risk much be profitable you not you position, what any potentially a characteristics have with cement And inside point quarter And on is saw saw being of the very to continue to associated this relationships. us we and very could us those opportunistic good to, good that

Greg Peters

the let’s better Well, still An But type or quarters of opportunities a clear. that and couple expense that to transaction? I averages. use for anticipating XX.X% ratio is be of in quarter the much that to new the lead rate, industry look onetime are as was an ratio run expense of expense elevated at the ratio like should truly fourth this next than going – that nature sort

James McKinney

we’re the essentially in nature. might is we year. necessarily that that like I are No, in it way or And position describe – if no, that out it would think that. Or opportunities that, right throughout there try might capture as the come to that I the onetime about

will benefit period. in be The of that had essentially the XXXX

little additions, see through help kind that effectively the rollout will So those essentially this rolling which a bit. benefit the moderate you you previous see necessarily, will in expense for quarter of which in don’t but quarters,

second mix. change a seeing little in The is that you’re Greg, of a bit element,

how expense and little operate You margins But states ratios. a ratios loss in be you’ve different really good underlying for where of got might terms bit just see those. switch or commission ratios, of a

a little change there. bit you of So mixed that’s see

basis overall, shifts a that a might a XX, and might to little and the the bit of of and going bit talked mix X.XX But XX kind again, to think has Those about. here of as strong You to a kind another benefits about XX, forward. margin point there. really the as, points we point are having ebb going themselves, it and opportunities about present think relates a in lot great of that of X.X there commissions very flow it things kind momentum I little

Joseph Lacher

a The it pointed the mix. And I add, out. thing XX, I’d you at little what clearly I was bit, if know sad agree I you’re XXX% looking Greg. Jim about can Page think with when I

about picking quarter – you number those the of of of the expense some and full part some You’re a towards that it’s Jim pointing pieces fourth think in Part get the modeling But then was Look was on you you reason a year. entry much we pointed more year development quarter And to the little a of number, more of that might clear about the low. might little third the where piece the of some when that’s going full cause reason at bit issues. loss were due forward. year number. thinking

Greg Peters

and I’ll of Can pivot Can environment – moment. us the of Property guess, well obviously you’re the like? makes given question, Casualty. sense with you’ve That had to, you sense. presentation. capitalized back – a I you it. give looks success Infinity and and and Got the M&A give XX just your final what at The Slide us Can very it’s

Joseph Lacher

time, to productive. career, We it’s anything, my same the and happens because happens, it’s Greg, somebody go eat. comments to not – what any I to out wanted never somebody, I answer there on see all have college like just give wanted just we the with I because – specific go dating really it when wanted

Greg Peters

Thanks enough. Fair for your Okay. answers.

James McKinney

Hey, Greg, us right. made whole, to something but add it if one you’ve that to as say relates the could would that. business the many this I collective better, about think just We for of a as us benefit to times, and group, have heard maybe the it M&A, be element

We are we’ve provides got bigger organic for got opportunities scale, that us. pressure to being sake the us good There’s not are striving nothing great to growth need be of really We’ve bigger. for that or behind to do something. pushes

So from that to continue growth front, to us the allowing balance strong It’s to we’ve that those really invest in opportunities. it’s great sheet. organic capture

both things, We’re on like if focused an capital capture and balance sense shareholders makes execute. our think, able and advantage or generation to that. can we’ve, that the capabilities to And that other that demonstrated for be customers those that opportunities, sheet along can Infinity we liquidity we we the great to going for be or to and to sides’ continue I something come of were sure making the take have

same decisions, that. good for We to in with and build is we with competitive to results really we’re us going we’re deliver continue our if and that at in we’re serve to that position what sustainable we else and making make point foremost doing to we But we’re great grow the both advantages off of happens, start think, good But better shareholders our for and customers allow customers of that now doing. concern a great. and otherwise, in first our organically. shareholders that And our and right each can bias what time, have something we in sure that’s build customers businesses

Greg Peters

you. it. Got Thank

Operator

come question Sandler. with from go ahead. next Piper Our Paul Please will Newsome

Paul Newsome

that about there or there about I to more Good Or afternoon. that ask market quarter. move levers the standard around? are could Congratulations talk you you change wanted combined a ratio turn the segment. you beneficial on Preferred to Do it… think little a bit the would market need more

Joseph Lacher

question. your that. missed were about the we Paul, first first know, trouble of after and I hearing the it little sentence part I was having a Preferred,

Paul Newsome

ask standard about in there or into wanted the need a ratio the if to – better move as you I apology. if there potentially to could profitability My to change some a talk underlying forward if position improving you other you there? the market levers XXXX, look preferred but combined

Joseph Lacher

So in the to your something enough question do marketplace? have do levers we need we was, ourselves? Or change

Paul Newsome

That’s exactly right.

Joseph Lacher

it, we’re Okay. And apologize. on your our side, just something It’s Paul, struggling with I doing probably because line. you’re

on there. business, have We this relative sure I’m it’s business to us modest doing the the helps a there’s a we’ve opportunities to population capability strengthen think, we a for claim our for segment work challenge space. which that works clearly we’re our that inside us lot about is, creates So anyway, have specialized of talked of of before. Yeah, Specialty us competitors. end. team of sized couple is we and our There some Auto, in of claim actually has bigger the The on Preferred of and inside environment a a that. limits A business higher

as limits, pressure the us we’re the will and some growing us certain helps spreading coverages, Literally of Specialty inside pieces just strength in we’re organization on that, lower the the actually similarly business. benefits will of our business We the expense the analytics, get out. actually building which fixed overall. benefit get lift that the that of help benefits some side, Auto reduce we from But provide metal some for costs

being reasons that the are why those So of portfolio are helping part business.

So opportunities there. we see

you What in who what got on of, capabilities. a proud and thoughtful pricing, ago, fairly team, volatility. management there years volatility more back X one important ago, if of agency business. years lot We ways, in is think and We’ve earnings to lot underwriting, are cat very the a tackling, blocking of that notice was saw that X basic many I a up business, is working we’re things in

the you buy treaty. top-line, then, immediately premium of When takes and some an that, actually and underlying out goes tax. business, that margin aggregate away we puts pressure and doesn’t the in the combined it buy improvement ratio, margins the on to improved used underlying include that We the combined because premium catastrophe of ratio

an combined be to ratio underlying appears that pressure. So

of spent business. reduced of inside that the got, it and earnings took we the All benefits way that we dramatically volatility

a all at miss benefit it to So risk is looking it’s if of combined feel that plus huge you’re is the underlying ratio, shareholders, to and return reward easy we a big inside business. it’s but

we It New We the there bit think, had march of on and We a continue growth we last little rolled challenge out, have challenges in few new in little months. particular, underlying in that We So the can to loss Prime some XX ratio. business a business York, forward. a had products. inside Texas had and of in had rolled generated temperature out the pricing. and a our

It running run We it hotter new expect there. penalty normally through was the business to than should.

improve. it the stopped XX we’re months it, we’re to with identified the confident take book was it causing roll it’s and take But the it. that renewals. got that things applying shut It’s have it’s one way would way got got definitely normally through work there. irritated the new through renewals. a off to that but with business on was It’s to we’ve the problem, its medication like that’s book through surprising the that we fix causing – and it’s will entirely highly that to product, the but to were measure internally it, going us the stopped, the new We it that seen problem its a the not work little But

Paul Newsome

deal That That sense. – increases? to it’s of all about your Obviously, what quarter. I’m all inflation you seems second lines, about be respect helpful data you be to broadly in seems short-tail the make businesses the with My the is talk to sure to the claims seeing biggest topic are severity. Could the would folks but various severity be not question just point us. for

Joseph Lacher

seeing lines shorter talk topic. are some way in us that? as of what’s And about, them we of I but a that cause cause of bit things up have exact raised to do of business. Paul, know, We a Yeah, a people the little have just would don’t not tail the

a in have general. limits meaningfully We lower profile

a perhaps, economic little customers, to wherewithal. Our less tend have

if not they fact perhaps, targets. So I’m same are in that’s sure the the not case.

– just different seeing modest we’re in We’re spots. inflation

But property, in note. really – or front and every important we’re would worthy we have look for It’s collision our that as again, piece. would to put you to not everybody it’s we forefront. it, consciously It’s because towards else sub-lines, nothing it’s something line of across every hear have talking of watching auto called or out it, raised about that whether and comprehensive [BI] said, we push [ph], the and of but we hand

Paul Newsome

you appreciate Thank Right. very much. I it.

Operator

[Operator Instructions] go with Please ahead. from UBS. will Our next come Seth question Rosenberg

Seth Rosenberg

Hey, thanks guys, and congrats on quarter. the

bit? of in size to the circle you should non-standard to around nature something back thinking guess, Windhaven that could Is wanted pick-up auto. the we you premiums, quick Just Yes, a numbers that for couple in quarters? thinking Access, the a given benefit of comments that and back on when I about from it be was maybe relatively little of next kind

Duane Sanders

this is Yeah, Duane.

November So about actions the timeframe. it similarly, taking last I late year, started really place think, thinking you’re

So action to was started to X, on off continue come volume policies. part in. It had their to terms in a call come – a the think, we in. There of by get will February where seeing they I

XX XX find watch it, thinking as at then it, days, start I would we’re it way think, I it. that we’ll responsive be would and you’re the to continue can. marketplace being to and about and But So its correct. most And it business yeah, manage as quarters X next X then over into to, to the say, way days, the will will we

Seth Rosenberg

someone in landscape are I give Got – absence they you. more standpoint, Great. against having change the yourselves a that state. Florida? benchmarked does The strategic think, And does there, competitive then them from the you that that probably of in

Duane Sanders

specifically? your Yeah, about question, our is Windhaven Seth,

Seth Rosenberg

absence give them of market, does more Florida? that in in Yeah, to I mean, power the that pricing over time you

Duane Sanders

of with Windhaven I we geographies, level there’s with is they in think a a for chase we’re might the have had they Access everybody. found Florida, sort California, across disciplined doing, to found were competitiveness. of we in terms reasonable little was and them. we’ve in pool seen been what of What most what spoiling And to not you in irrational what be

Some that a folks temperature. case, going we But to perhaps little give rationally that. more chased environment, a still it’s think, and they’re it’s fact bit in just may have to have the fix a competitive. was may them of If that competitive them,

nice were And our we we opportunity that enough out, perspective, so a like is out disciplined. we the for growing themselves were feeling think becoming candidly taking we and them doing increasingly job taking from an competitive and our were at them business attractive margins, or very

Seth Rosenberg

Got it. major the then, next in there no of like conversely, reinsurance are just changes aware the you That’s program? you treaty a so for Could cost the should any highlight year. we of And if are looks changes. be helpful. is It there change and renewed there

Duane Sanders

Yeah, happy fire terms the cost major kind our slide change that basically program. and there of note. nice material to. overly think business through covered inside and but appendix thing of also Life not of see year in in of overall other note volatility, will to to contents is our treaty, there, in channel that marginally it’s in the further the No distribution that’s than that to the again, real Health dampen add thing One kind you’ll very aggregate that. a We & is this that nothing

Seth Rosenberg

going otherwise just season, you’ve one could have to Life worse you flu season flu from normal if get I is this or on on what is the maybe is than think usually be or expect? one. Based then, when so Okay, great. if impact seen the side, And better XQ I a far, there

Duane Sanders

to X in We a that basis. the volatility we tell one you quarter. first was love quarter would usually I had X the It’s the not Seth see always only rolling quarter first.

So see so the we in second. the flu sometimes first, the before, the may – late sometimes sometimes it it sometimes into it’s rolls a season, it’s

is it there bit where So slides. terms little of in of noise a

calling minor suggests out seeing but a of that normally not what We’re anything with extraordinarily anything telegraph. to we’d that we if expect; now anything, out be sort right elevation, pattern nothing of

Seth Rosenberg

Got it.

quarter. Okay, thanks. Congrats on the

Duane Sanders

Seth. Thanks,

Operator

Gary Ransom from & come with will Partners. question go Dowling next Our Instructions] Please ahead. [Operator

Gary Ransom

Good with whether are fraud? in I’m business, are you some of afternoon. trends, Specialty to you [if on low people your Is you between the of think correlation that retentions there’s any insurance low it’s I’m aspects just curious economic bit – what any whether unemployment anything longer? a keeping [ph] interested it on have unemployment] detect topic. say their And different whether little

James McKinney

that underneath. is it you, more people causes when talked more have Gary, are or disposable and unemployment correlations getting driven declining has roads, the give economic are on there��s more more there there we I’ll an frequency. see usually there lot, jobs, they miles income, certain of some we’ve The about in and that I’m the Yeah, see people example a trends you to a uptick –

Gary Ransom

Right.

James McKinney

underlying where know it. see. So that’s of see I there we example components good are a we other that

our and in into of and be processes, ourselves there Some our settlement underwriting a sure is – that little working pricing that think There keeping our the that comfortable feel effective because to marketplace. more them number more see we see. I’m I more helps is us in we a claim we than

customers. for And being serving edge and a opportunities perhaps exploring to give job more doing we’re us that more how insight, and looking underwrite about we thoughtful better and of business. constantly our our price and that at

Duane Sanders

relevant add, our this a One stage at kind at least thing in standpoint, I of might journey. of from just Gary,

quarter the row playing, seeing to second bigger I are of of the some in the growth influence think macro a think earned we had if you what incremental additional is, kind or to increasing relative on last just premiums, as look decisions at PIF again say. macro the of I they’re you’re and and than that quarter, of right elements probably that actions business, making end-outcomes a our the way kind we’re a the now and for

and Now what look of headed. you probably to that stage, at case, where but the having are that’s we better we’re are won’t headed, you competitive our to I give indication indication probably to then better a we’re get the standpoint. of be at doing always going a think I think a what And successes this – from where that want we’re

Joseph Lacher

now XXX% data give Yeah, to the and was Right talking of trying the more which that’s bit depends a what try of cover. you, that we things with and agree on you’re Jim. it with to little Duane one I about.

markets next be expand in of the measure newer to years. and ability markets be going our effective the to the few to we’re is a in Our over in better effectiveness

us be question was the better If it overall. your think of But business, your about a more generally whole more started. you think I book applied to I way to kind that answering was way may of

Gary Ransom

Thank Okay, for very that’s much fair. that. you

in Preferred had on only whether of strategy? I just you the thing had update whole the success about anything to in there strategy leading homeowners Just Is the say business. other was more that any

Joseph Lacher

we by next very to Yeah, a the or learning going be we’re get effective running the to to and that handle to how of things got forward. to the where the series what of We’ve you’re doing. we do able that a and going something about see we’re going strong Gary, It’s have quarter where we’re point in we’re what end more still year, meaningful hypothesis But terms numbers hopeful, of continue, two. how time we’re back marching in doing project, we’re of testing about we’re stuff it. we’ll to through the not work view

Gary Ransom

then. Fair enough. Thank very you much

Operator

conclude any to like back question-and-answer session. remarks. I will to closing for over This now the would turn conference Mr. Lacher today’s

Joseph Lacher

you and on interest your Kemper. time everyone operator, and in next you, we Thank for with to forward quarter. call talking today, look And the thanks

Operator

Thank now you. and attending today’s you you now Thank The disconnect. concluded. for has may conference presentation

Kemper (KMPR) 10 Feb 202019 Q4 Earnings call transcript