KMPR - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Christine Patrick

Thank you, operator. Good afternoon, everyone and welcome to Kemper's discussion of our First Quarter 2020 Results. This afternoon, you'll hear from Joe Lacher, Kemper's President and Chief Executive Officer; Jim McKinney, Kemper's Executive Vice President and Chief Financial Officer; and Duane Sanders, Kemper's Executive Vice President and the Property & Casualty Division President.

We'll make a few opening remarks to provide context around our first quarter results and then open up the call for a question-and-answer session.

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

this first issued supplement quarter XX-Q. closed and earnings and market our published earnings the afternoon, our we release Form After presentation, financial

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

condition. and discussion operations are the Harbor Reform not the of Act limited Our the XXXX. and These Securities outlook the Safe may to statements provisions contain within its today statements of meaning Private of of financial future Litigation results forward-looking include, company's but

may the COVID-XX include statements pandemic. the These related to also impacts

actual condition Our may materially from future differ results and financial these statements.

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

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

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

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

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

otherwise these All references unless of each our corresponding at Investors be website on kemper.com. of XXXX will made comparative period, the stated. documents find the to section can You

the COVID-XX Kemper due to apologize at to enacted disjointed would I our that location. are not understanding our the practices in question-and-answer distancing cause the like from crisis, in participants Finally, to and our in call same social section We advance response to for ask call may listeners. of times. the note that feel This

turn over Joe. will to now call the I

Joe Lacher

Good Christine. joining everyone for us you, today. and Thank thanks afternoon,

on a our illness, usual I'd recognize the for minutes discussion, to that beginning is Before have toll impacted let's taking first working compassion take those and thoughts unusual our this few to frontlines. death, times. express these the whether pandemic the unemployment human acknowledge and through; and individuals been families like or

move I and challenge has way stakeholders. of the to we the the I'm COVID-XX focused the very employees. our of of supporting our on circumstances all continue dynamic the acknowledge of proud well-being crisis, risen to efforts team through our As want of to X,XXX the

ways I'd highlight X, page On the of a is like few responding current Kemper to the to situation.

protect Our the our to first safety crisis, doing well availability health those who help is of for the might flatten our as phase be families. early focus and health the care as it. the on to of the this and employees In part their priority curve partners, and continues need customers, systems

We distancing acted to quickly social practices. engage

levels. meet XX% normal remotely, to at working continuing have of employees our the We needs customers our nearly while service of

our and healthy. For employees office, everyone to in social safe the keep maintaining appropriate we're distancing

the extending employee towards crisis. Kemper who announced instituted April program a Life for their strain. due and We May periods experiencing financial for any our of XX% credit business policyholders commission grace for forced to sales agent, our suspend we're are and a premium temporarily We've stabilization customers new our auto to

types food organizations the needs urgent a support and million issues focused company our enable supporting commitment $X recently communities medical same our COVID-XX support to meet a including also to at all our by announced we the our organizations stakeholders. employees customers, the personnel. meet of crisis. strong We're maintain We're and are frontline security to to business the to of communities, proud providing continue work. execution and time, on to grow assistance critical created The and These needs of focus extraordinary doing on effective

top-line XXXX. Now grew Overall, X XXXX in quarterly line to in crisis COVID-XX experienced to with and the page X% turn appear our in continuing first This to rates is the throughout unique January of February impact the quarter the in before earned March. let's premiums discuss a results. with experienced we quarter we growth started solid growth

earnings per unrealized or gains share, net $X.XX operating income million rolling tangible a of $XX four quarter quarter or share. We on excluding net adjusted $XXX XX%. generated consolidated was were equity First million return per $X.XX

generate Our the ability of and return business to level our the this through environment cycle. that performance and of model to downs a strength speaks ups of through

Our top-line broad saw specialty business all growth driven XX%, growth geographies. of by across

in were of of opportunities We the resulting competitor. ratio an and at exit to XX%. Florida growth expansion top-line margins geographic maintain able Continued as attractive from a new combined adjusted business solid with enhanced underlying

our segment this in continued of quarter underwriting improved as from book actions preferred earnest. results our Operating repositioning insurance and the

size level results. this financials. the we we are said, Given quarter's the refine and and the of volatility in pleased efforts a modest products progress offer, quarterly of we enhance to with higher continue business expect That to reflected in

flows provide In financial continues backdrop current welcome standpoint, and diversifying to grow earnings Health these environment, the & cash continue a From Sternberg, we the of breadth quarter help organization. will another given segment the delivered & and businesses. solid to Health the of within to of new depth the Erich as Life thoughtfully to division's us our Erich's segment, experience Life President.

to let's Now financial turn Kemper's strength.

stable for few uncertain organization Kemper we developed has past one a of and in that the into Over strong a years, like times the currently stakeholders security face. is source our

and ratings actions call. This of rating the and holding to I'm quarter pleased BBB. financial on our A that the positive S&P performance. I quarter senior during key be A.M. rating rating to that debt by Fitch agencies We continue our follows for fourth recognized improved Best the noted company's upgraded strength our to earnings

no with low investment ratio debt-to-capital maturities, near-term significant strong, contingent XX%, of diversified balance sheet capital committed SIFIs. a as a is classified portfolio and Our institutions by debt

X, to the we million remaining after-tax the Kemper amount the the $XXX April redemption equates shares quarter. in of of hybrid this judgment, repurchased roughly both we XXXX with conjunction the which issued in and Through This of stock. balance the received notes of net CSC

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

Jim McKinney

Joe continues like Thank and afternoon the good the and Joe's my first comments, the I'd echo call. sympathy been for take individuals and that to you, have express human acknowledging everyone to families many this pandemic to on affected. toll

with the $XXX in Page quarter for results to the million $XX on Turning was year. income Net million the X. prior compared

of Excluding decline impacted consolidated adjusted value the in purchase fair securities, grew by the of and this net sell-off. driven to income were heavily impact Net market global by the $XXX convertible accounting, million. quarter equity result financial

we X, including the received balance Page we the of sources million as remaining judgment. of isolate $XX volatility, of satisfaction key CSC On the

Our perform results. with our results well demonstrate is to and strong continues business in solid financial that the quarter

strive greater maintain ongoing two of this a moment focus challenging Turning take test. we time, sustain and to remind our risk target like capital sufficient Big to picture to liquidity, of individuals on to X. using I'd the to management. risk Page In ratings

liquidity credit uphold and versus clear, much referenced manage the to to solvency, ratings levels framework more be capital here target risk. To are a conservative

XXX-year one The stimulation our in annual liquidity ensure operations first entity stress and a of the an sufficient needs test through to is event. the to capital has meet

The the market second stress simulation through life operational This stress range approach are challenges, is regulatory the to include stress a of a through and capture our liquidity challenging capital needs ensure a including economic X-in-XX Federal an Reserve strong assessment X-in-XXX helps setbacks, XX-year catastrophes one uncertainties events, Like and liability in events, the intended over periods. company event. we is test, that broad of and the

Joe improved S&P on, our outlook months past Best. capabilities focus the Kemper As have from risk and been AM ratings strengthening over years upgrades our in and on recognized Fitch through from few management recent and an touched the franchise

that points, those reviewing sheet. With of balance I financial to our key reference start the of data by highlight would some points like the strength

costs. liquidity, have we in of multiples our $XXX million fixed First, over many

Second, attractive and entities, capital our cash quarter, volatile flow through flow periods. is cash In designed item economic debt It final a is model XX% operating the maturities. by positive is diversified our A stack. ratio to strong insurance produce no near-term of was our of highlighted $XX million. capitalization debt-to-capital

significant with flexibility. financial Our is balance strong sheet

quarter. recent important $XXX stock. Kemper of repurchased the to our April these occurred during $XXX million is we repurchases X, note stock repurchases. An item of million first Through

the with the XXXX. of As in redemption the and notes his the hybrid shares this to the amount mentioned in equates amount issued conjunction Joe roughly CSC payment of in comments, after-tax

auto to were uncertainty that those When continue proceeds And growth momentum to see our and expected judgment could we we tremendous issued timing CSC growth. specialty there from around fund and business. help the amount the of shares, this the was and seeing in

the repurchase With shares. for our was to shareholders thing hand, felt these we right do in the proceeds to long-term

We to issuance did so price. at an XX% discount

have We any not repurchased X. shares April since

repurchase roughly August on XXXX. We $XXX million million share from our authorization have $XXX remaining

expanded repurchase in Board roughly This capacity. authorization million, quarter, this $XXX million $XXX by the providing

our capabilities is, long-term to do capacity plans we we we to what shares, below value believe repurchase if the intrinsic near-term shareholders. this significantly the While value trades capture not additional and for Kemper have company's have

Turning and and of share, X. book again per the of value which I the track deployment metrics efficiency value intrinsic capital return Page creation. closely on to tangible cash decisions generation, some highlight including to reveal together want capital tangible our we equity

per compared In was unrealized fourth with value the quarter. gains quarter, the tangible book excluding flat share,

four mark-to-market unrealized returns Solid equity with remain impacts of our operating performance XX%. quarter gains was tangible strong said, volatility. rolling by excluding market return an from That industry-leading offset on

our made in Page core this our COLI made presentation we portfolio to $XX change grew In to allocations on first XXXX grow. XX. portfolio million, the have net quarter, is income the first over This a investment including We Net charts income on Turning page. reflected investment investments historical to our as in from quarter basis to continues of we increased slightly began the a of investment this result class. the as the income. investment

market X%. investment volatility, a result of given movements. the to discussion this The portfolio the we transparency our was would believe provide peers, to our largely expand portfolio. be decrease our current of additional global declined quarter's helpful book many to it Similar to into annualized The of market yield

portfolio XX as the on categories fixed offers that COVID-XX. of income areas detail our exposed to energy, leisure. these identified retail, the most and transportation We've are Page impact of more economic

X% and diversified concentrated is well It can in slide, to of you is investment-grade our the total less than sectors exposure our above see As these investment portfolio. assets. from

Turning XX. Page to

asset different across our more on and of You detail relatively investment types a portfolio. portfolio. investment-grade of see It diversified is below income portion small can fixed at our X% is our overall

the rated XX detail rated CLO highly in invested gives with on higher. or more Page A majority our portfolio The of assets is XX% exposure.

Finally diversified generation. It alternative the Page our on we focus alternative portfolio credit funds. current of is on income strategies, equity primary The XX and largest components private down of break holdings. private our is across focused hedge

Similar source this to of environment. portion reporting market of portfolio of to stakeholders a bleed for positioned a will This this XX% has through this well we our be roughly lag. results. are next a In disruption quarter's quarter's others, closing, investment global strength into means that

that, discuss the our of call to Duane with the I'll segments. over P&C turn results to And

Duane Sanders

everyone. Thank afternoon, you, Jim, good and

Specialty segment segment another premiums XX% from million Specialty increased Segment the by the highlighted in-force of earned $XX increase prior million, Page income Policies on quarter. with excluding the of an car. was of The growth. quarter net XX. of sale begin was XX% classic year's strong of driven Let's by $XXX

in we you As across all the see significant the experience can of the geographies. top strong right continue to on chart growth slide,

Florida X% XX% in in and expansion Texas and Our trailing in our growth was states. XX-month XX% California,

As in further previously us. a been noted, of was competitor. has growth Florida the exit It market a for quarter amplified robust the by

as and months stay-at-home first orders implemented. of results. robust the our related was the quarter in to in with crisis were rate recent March growth COVID-XX slowed two in This line the Growth

million the response have miles XX% $XXX our resulting in and customers we to fewer frequency. our to the May reflecting April crisis, a decline of roughly and credit premiums, auto towards driven part their As provided totaling

as client XX%. growth adjusted with in We quarter margins, ratio an at of experience continue to the underlying attractive

the in three items. by losses were quarter, the impacted During segment

with First, of our in growth. increased head staff support this we anticipation count to business, volumes new of increased planned claim

normalize to throughout this expect year. the We

related changes changing impacts car Second, around and values, development to other recognized loss in we This a used in includes environment. severity due things, changes in values the repair salvage the among macroeconomic cost.

quarters to growth tailwinds, Lastly, situation segment a but strong. for have past legal few remained PIP. items. has Specialty over near-term intact, long-term the recognized Florida the item experienced some created we The we watch related COVID-XX The outlook the are

preferred ratio the income XX. the an of of combined have auto $XX to in of Segment the segment underlying of profit Turning increased in first ratio Segment lower page quarter insurance with and for million an was array $X combined due home in resulted XX% with broad the segment books taken XX% with XXXX. million to income underlying activity. loss on our a of quarter that improvement actions overall compared income

of remain to continue preferred our we volatile relative make strides targets, expect a of the reaching book, results insurance for period While profitability given time. to size towards segment the we

Joe. I'll now back turn to the call

Joe Lacher

Duane. you, Thank

million, the first Health reflects produced net in investment pressure pretax $XX couple results global page economic of Life of XX. income the a quarter, items. In our onetime segment markets, income to and impacting Turning which on &

on a million Life and through a agent stabilization In the our the of and provide benefits focus impact businesses P&C the in continue as our offset as from diversification commission estimate. combination from refinement to premiums X%, sales platform was quarter, growing value efficiency. increased Earned CEI the strategic there COVID-XX. was $X capital reflecting This by enhanced disruption result new the of employee a

too key will minutes impacted page, to the the that like crisis and It's potential XX to business last long spend Turning of walking I'd how the determine been a our COVID-XX to pandemic. few still through by have outcome. areas early

We will months. coming in more the learn

written stay-at-home Turning the miles to the put shopping behavior significantly of in March. business actions our in a had the end quarter have in Specialty the Preferred This in been credit a place in premium auto adverse place an segments and on in offset were The May. second decrease towards decreased half first policyholders driven impact the resulted of somewhat our for and as has an severity. reflected COVID-XX drop a put frequency. increase frequency in in with auto by decrease restrictions has accident We April in XX% new

market expect lower amount existing dynamics where in debt and in to increases significant fee driven segment. is it place, expanding in in modest There's Kemper and ratio fragmented. the Given pressure opportunity bad of our reasonable premium by currently and geographies competition both expense Growth volumes. specialty is auto for remain a prospects

and this a tailwind, less We growth continue to believe make this environment the provides around certain. near-term social although timing current economic

this Turning late crisis, resumption business. changes sales of to book. and COVID-related communicate to meaningful suspended our the We temporarily to the on Life no business in we quarter. new our expected in gradual the in morbidity At March mortality expectations with have second point information a

this is through and Kemper closing, to strong In environment with perform position. liquidity well a capital positioned

capital. ratio highlighted sheet and balance a no a low have maturities near-term debt-to-capital committed We significant contingent by debt

and In flow financial addition, the diversification mix added cash provides of our strong flexibility. underwriting businesses

source an our it here our stakeholders act crisis of our they in when the the Insurance crisis. our a as is COVID-XX I'm we essential to for We're to the situations. function and on through strength continue proud to serve deliver to have ability most. customers promise customers need all

now, to I'll turn back your operator the And take call to the questions.

Operator

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

Greg Peters

COVID the slide walking we can Joe, afternoon. good go to through considerations. where you're XX, just back Hey,

specialty credits or First auto, are mechanics will auto through spread give color the that some of all, auto the the on auto or going And just specialty can through across it you us and preferred financials? of walk please? how us flow commercial be XX% further to

Joe Lacher

anticipate that the a lines impacts. it and for will accounting to premium through credit Greg. this it go Happy We as Sure.

auto auto appropriate preferred lines and commercial specialty auto, the were So, auto.

And premium get individual guidance the have was what Again, a it we states some that premium. we number Now, items. cases may is particular but -- that -- to may that states most have from a that a we okay. get has return we that filed If they the have state expect. bit, to we these acknowledged file objection little as move in

Greg Peters

the at the acquisition is changing look guess cost won't it's that's ordinary ordinary or loss another correct? this ratios just I numerator way change, So to

Joe Lacher

return month of have premium is of been a expect the we month of and that in that would May, What it's the for April the so month. premium charged

we You still will We'll still not get get We're the losses through. the get a that result. the commissions, expenses. commissions as reducing

provided if So will to of you're help change. you to about will get number historically Greg, correct it ratios you the in we've the premium normalization. past the that change and information cause kind think to

kind my age, accounting the teed we similar did certainly items to up – and to with of that, to haven't try While as of elements out will is all we give pieces. firm this those other continue at you things what guess we purchase

of you've So a appropriately normalized assess kind business. can the got view that and

Greg Peters

Got it. Thanks for that. color. Thanks for the

said in also agents. minute on spend you You that? that doing a your something you're your prepared Can remarks life for

Joe Lacher

Sure. In life we employee our agents. have business,

those complex imagine, program new collecting as where and are can business, premiums they a folks. a It's in there's and combination business you a fairly measurements for they're well. As compensation of retention

sales So and together, in those since we all March under from new for starting perspective. stabilization by cases them late business some commission And a suspended significant drop there, causes product of that things programs. we compensation put in a differences there's in timing some nuances go

of never smaller down have a way this came of might running done with done perspective of before and we've it period things business time, country had agents. do some We've for sort to we of hurricane But a again. new past wide. shut that through We and group from a a that groups in through the if we're geography agents there

Greg Peters

Got it.

know across can sales. color. maybe comment pressure add and that working – current your did and pivot So hearing tie some or on color there's April on how maybe initial And I just that how the additional are We're you provide on But May new board it. some trends the you comments retention? sales provide to through let's trends. new additional business with in

Joe Lacher

perspective seen industry think end way – worked business slowdown were We everybody the I home. tail staying Folks its new has out In shopping to calls. or for cars. other have were They starting March. Sure. focused April. It those of a their the at with dealing on from sales in things. saw service as were agents issues. weren't own virtually at a may figure deal been to cases, into we new commented, with of not They They ready many how

we've April through different shopping. May, to a seeing see geographies miles pick operational people Agents and As into starting economy we're little We're adjusted more back gotten to start have more up. engage capabilities. in the in bit their driven,

So increase a starting that to in we're shopping. see gradual

period, thought look retentions. to operate largely modest brought we've time nothing would that to worth changes in again, I an note was as them attention similarly at During quarter. expect second seen but the retention, that, have I around And we

Greg Peters

adjusted? adjusted right. you us there page specialty the please? upward to to as some My seeing we're combined trends where I'm going slide why on an – in there stabilize? underlying last will focus the the give us What color your the walk through – question auto ratio. on is Can that last on going Got personal of be what's expected bottom Is the trend which line presentation it. is in And XX. and All the slide

Joe Lacher

had you're to of or is about page is see helpful think Happy this going is, What XX think you're to at What get combined XX points XX XX to of in last there and quarter to supplement. a or accounting related favorable and you're what pages to about going through basis also to And year's basis it's Greg. last just X.X. quarter XX then to purchase the when quarter, relation was ratio. also looking I on – points, it this minus there development of is

more in one point others. level. The really a a little a things makes element one-time service that's that change rolling you're through the development that from that those a just XX in of bit nature seeing So and bigger basically is little basis confusing bit elements change is

unfavorable. for make bit for way training business throughout resulted that to at in the what you If wanted passenger of related of kind of the that we year And outcome had This and Duane best for the to mentioned. unfavorable our favorable as sure point That underlying year the last the – ahead what three in again, combined year that's private year auto throughout we little versus you year coming plan of one other the been and as, inside volumes businesses last shareholders. things look with that department through we overall continue you've the be a the is remainder get by got you've saw to and would was elements. of for got a some have for we for would driven growth all normalize our we primarily – that pressure be We we thought a the get as there year. experiencing way quarter, bit – change claims the where will to had that little of development. best A&O be have to had ratio growth and new would of total that us the well That's what prepared

in item than kind I about maybe Again, being of looking totality going that, less will point-ish think X.X that of where you're at normalize. would across.

related that in out had to essentially there. some environmental an are elements You picks. One was our other factor

mentioned we Duane on, As with environment. salvage this value in conjunction the that total in losses saw

our estimates through from that. part that quarter. was saw a And the in the elements of used refine car we assumptions and was or recoverability, that. what our terms drivers. That other demand prudent, had in at of thought one market, stage tremendous it bigger this We thought likely You've obviously slowdown roll to you was enhance this the around

would to it that interpretation. going legal and a change case some of Duane Then a Again, prior a had of the other mentioned affecting as that item, one-time the was, related in year. really there Florida there part item that development his through be comments was again, out kind and PIP as

seeing In about that pick summary, I'd stabilizing it. I how inside what that number. good a about financials XX.X% us you're think annual that our you're would looking should think that be around at that. is That's

we'll year's looking numbers update Now, growth point. anything underlying would from the But I'd are year-over-year, our that I'd of XX.X% be have the don't environment which coming kind prior that again, see total I through. good Certainly, kind difference brings. doing other and at, what were if over doing be in XX.X% feel the one-point the pretty we that of a our about giving and both comparison, assumptions

Greg Peters

Excellent. Thanks else answers. asks someone for the I'll questions. let

Joe Lacher

reading for the Appendix. Thanks

Operator

go comes our Please And question ahead. JMP. Carletti from Matt next with

Matt Carletti

afternoon. Hey, thanks. Good

So, just the about coming back just question on is the Greg $XXX just and on April million clarification two a questions. One first May.

see financials? line a it just of in how in auto both presented Is we'll -- is lines? come that the spread the bottom see across the out written we'll that So earned quarter and

Joe Lacher

There other That's areas how are won't and an and it in that a perspective to few confirming from a type expect Matt I be sure financials. expense state that it be item. presented the making we're where

and You've get be can what this Either way others. rational what's has both from in been of in sure obviously to business. number that of called you perspective other will it's effectively that out how diversity can a tell seen make you handled for so a terms normalized practice we'll a so happening

developing. said I think the is Joe could for starting come but it were would premium. be research that we've in coming there's I out that Sure, assumption it But that's place right I is if were case. would with the call again if that on and are modeling different of in if We expenses? something that that today. it done But through the the if that's we And given kind still starting, the items

Jim McKinney

and through the in go quarter. would both it And written earned

Matt Carletti

not takes could you debt insurance Perfect. hoping the walk about My back in specialty collect go and was we much to you anybody little Joe about to your for How how holding premium upfront? to, cash question, that expense. credit just guess, comment a of Right. you puts think cancel might on might the be terms the How I kind you guessing and slide little into mandates in guys I manage kind more further commissioner versus should go versus just non-payment. us much and XX be how I more auto think bit and and how that? preferred a of help where other Wonderful. you you on pay Anything we go? can us comments wanted maybe through I'm some bad as might it specifically there of should of particularly just about

Joe Lacher

Sure. And sort plans I'll carriers. billing most in and preferred with have order go are of consistent we reverse From preferred perspective, on a that those. processes generally

bad of X% be -- some so. be or go. debt risk often billing We to occur very there through low on a folks periods might somebody will The find don't expect folks the often typically where regular down there that business. to you as There's a do process or grace to will large equity. we payments, out have make credit While a is of period to greater basis running tend allow of that's percentage pay a level billing who are

expect very not a would large we change. And

We expect by large more specialty who sensitive. some the like but of very but auto or maybe typically characterized credit not basis change change, of customers preferred something price not customers a it's or Inside more XX business that ton. a are inside challenged that is that, points environment,

to recognizing in this equity than pandemic more out more are to responsive our inside difficulty to we if are occur, that and we have because responding and business That cause to rule, in try of carriers of letting encouraged financial auto will that traditionally periods customers, general not a be As they to business. some states having credit would happen, us avoid grace work allowing the be have or and crisis of difficult times to extend nature are appropriately. the we specialty economic required

be bad that we a to group population run as worthy debt would expect less and credit through tends result. As more to a

Matt Carletti

get to in or think after normal? the as think and follow-on expense back you about question. whether guys that's this we the of what on accrual a that next down some higher it's it on it put quarter, that Whatever with just year better amount to long this you And that what Okay. you the quarter to as for is might for should more was goes or then for as level as the is we the -- forward, we and up as provision ratio things have see come the quarter just beyond a think quarter time quarter we an of of we'll is it live this go will impact

Joe Lacher

Being actually extended. the write-off more Yes. than that -- accountants we good we've Matt, premium can't credit

you all have we is the in in do quarter. the So quarter what can

So of up to occurs. the in for were full it degree where we would that getting some quarter, debt expect the in bad out only it quarters the our not we equity, we it would impact see knowing second did we occur to that provisions ramp but to was expect and

we'll it and are window see debt time. all or of really for looking and If move on equity a are If XX-day debt responsive. our practice this quarter extended very you'll bad second and the that that the then and in being to be asking time in period, some we're bad back see time-sensitive beyond we executing to go up we for normal might grace periods window those that have of XX-day states a period

to going in some we'll answer it see and is a short there. you're bit the the I little in normal go second. first long fourth. bad quarter third to imagine back of And would see The you'll more levels debt the in spike So answer

Matt Carletti

luck. best and you Thank helpful. of Very Right.

Joe Lacher

it, Appreciate you. Matt. Thank

Operator

And our Please Paul comes next with Newsome Sandler. go question Piper from ahead.

Paul Newsome

are got Greg your three to standard and Matt in and is frequency Nice about and my I experience see if of have business there safe the preferred those you or the difference commercial March the afternoon. guys between much differences questions. books really bit Good only talk of classes could But whether the was non-standard healthy. one you really little business a most auto? amongst left

Joe Lacher

greater a the decline frequencies frequency preferred decline of auto. in Through businesses. in saw did March all than Yes. saw we We non-standard in we

all those somewhere I They in between fell in again significant more think two. but were commercial preferred. significant cases in

Paul Newsome

a Great. Have Appreciate it. Thanks guys. day. great

Joe Lacher

Paul. Thanks Terrific.

Operator

next Seth go And UBS. Rosenberg comes Please question from from ahead. our

Seth Rosenberg

Thanks. about that do But guess benefit carrier tailwind ahead guys. were here. up acquire? likewise mentioned you or that, more you of is of still have the a one Florida much from sense in And business is of and us you kind looking questions been answered have my thinking that pick behind to the think business, now? And how I of from kind I there that to for Hey, able most able

Joe Lacher

Seth. You cut out bit This the on was tiny a Windhaven question Florida?

Seth Rosenberg

see How is some behind to much to benefit still you And business sort Yes. now there able that think or of pick up? of there? do you that were us, is

Joe Lacher

again go somewhere probably been I some somewhere and think because that there's still just folks move they're non-renewed have would us and the in the but more it around where to bulk behind marketplace, had kicking uninsured. of were those

expect its but the April bulk bulk would the more We we has a of it the through through time running snake. way an drew eggs period, of see might bit little system. the the worked So,

Seth Rosenberg

Got you.

Joe Lacher

And just to business a and exact good perspective a quarter. at have hard it's shot hard a quarter. sort new volume exactly tell wacky little was it in what had a it's it was We might of what Things normal the impact got telling its was. got to on if you tell from --

Seth Rosenberg

expansion an your just kind is that should geographic there of in we there, of your work of this impact? about the your your point? anything you guess at various ability and thinking given COVID Understandable. on to Is terms states I on maybe be changed with regulators sort there there thinking topline about of sort perspective strategy, thinking Have expansion?

Joe Lacher

activities. processes. is different in we're No, no impact seeing will or of a Those in with at I'm general as on their at regulators just all rates Yes. No -- all business a appetite states slowdown geographies. us our on our item environment where reemerge. a all only read, there's new will relationship impact and impact of The restart have all slightly view at just sure of it's change and thought market

expansion were in ultimately is will core still states we've clear. all of to the our we of when our not a and Florida, got cases growing all health normal So, Texas, think environment California, just But us at down of tailwind just in back states in sort a get business while. that for slower behind that We slow is think this there. the It's entire rate. We the a little them.

Seth Rosenberg

it. Got

on guess, us in what's Could of lot what's you personal going or think so what's in auto then there? guess going to help -- trend. you're attributed I a that Is had seeing lines a you I maybe the a And salvage of to there? of settle commercial I to more in with but shifting favorable development something on context gave from good you sustainability what we've the on Q others think heard propensity liability about Okay. you

Joe Lacher

would the difference I a real that's than improvement position se driven there's than being there. in this things give we mean expectations had other that some three we've number -- winding been think we're and per or trend I there's overall we've no But the There's at two to Seth frequency reality look yes, by more is flowing an you practices degree. up development it certain favorable but you line a just some -- a No, that's here come underwriting book. our other from years, idea last business really just other both of that to favorable over-picked if not for claims through the in. The market

Joe Lacher

at Yes, look when it's commercial you a of vehicle book smaller business.

been those, there's some from reserves had tiny a you the when more and try little volatile We've development seen bit a just time just there. on that it development to gets pressure. the periods perspective. So, favorable We've where pick

spot us come favorability actuaries As to trouble they hesitant want generally to because most know are see it. of through quick and prove knows really and a little they're quickly to react

out a So, works little way slower. that just its

who get more to they're on making likely working but claims knows always we're better. to anybody any get estimate, time spent again our And best worse than are they

that itself slows a So, bit. just little

course normal stuff. just the it's So, ordinary

Seth Rosenberg

also -- there's how roll you give just next about Any and probably remarks one. Sure. Got quarter. to on XQ? quickly thinking kind that I the last guys it. can you you lag be in through mentioned some Make still think should as report of Jim we to sense. And size for us your last

Jim McKinney

hard pick kind It's of a combination bit up to market being that. fully performance. some equity of little It's going to end

look as and little at XXXX equities If Russell the might think a that a bit you use you about proxy. a

that markets, credit And will as proxy. can to private you debt think give hard you a a tell. I the high-yield a that use It's For range. little

may I think position we're to in cases. economic equities some In others, unusual potential alternative we a other relative favorable see in conditions. certain

I I that. those going through think those between there. to pretty it's much little indexes. be see I specific until there's come And you to wishy-washy I that give we don't to very data hesitate on sometimes to things. that. more performance I the answer data a going But to to mean given close the hard just actually it's going be disconnect actually have industry-like So, in, a be a to have think -- I specific we're

Seth Rosenberg

color. helpful Thank That's Sure. you.

Operator

Patrick turn the to this conclude to will over for And remarks. our Instructions] closing back like conference Christine I'd question-and-answer any [Operator session.

Joe Lacher

We Lacher. today. Joe your Thank attention is and Thanks. healthy. this for appreciate all you it time and stay Again

Operator

has concluded. now Thank attending for you presentation. today's conference The

disconnect. You may now

Kemper (KMPR) 9 May 202020 Q1 Earnings call transcript