Kemper (KMPR) 3 May 222022 Q1 Earnings call transcript

Company Profile

Participants

Karen Guerra	VP, IR
Joe Lacher	President, CEO, and Chairman
Jim McKinney	EVP and CFO
Duane Sanders	EVP and President, Property & Casualty Division
Greg Peters	Raymond James
Matt Carletti	JMP Securities
Paul Newsome	Piper Sandler
Brian Meredith	UBS
Andrew Kligerman	Credit Suisse

Call transcript

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Operator

Good afternoon, ladies and gentlemen and welcome to the Kemper’s First Quarter 2022 Earnings Conference Call. My name is Sam and I will be your coordinator today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at the time.

As a reminder, this conference call is being recorded for replay purposes. to Vice host President like Karen today’s now Kemper’s Guerra, of would introduce for your call, I Investor Relations. Ms. begin. may you Guerra,

Karen Guerra

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

make a our Q&A will call then few We provide opening a context first open remarks around session. for and to quarter results the

During the and closed Form issued presentation our Executive our Kemper’s Vice supplement will interactive President published and earnings and financial release today, be we and Officer. call, our markets presenters joined Chief earnings XX-Q. by the Boschelli, of portion John Investment our After

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

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

materially future also financial and actual may these COVID-XX condition may Our These statements. statements be differ the results by impacted from pandemic.

additional accordance reconciled rules. earnings to the measures to to earnings measures on release. financial meaningful afternoon’s that our with information we non-GAAP are they our in This well and non-GAAP risks supplement, forward-looking our refer where presentation, believe In all required these and SEC quarter GAAP release, we financial first earnings For have defined investors. and also financial XXXX may as statements, please impact as Form XX-K discussion includes

unless section website, documents over stated. references You otherwise to call on All these period Joe. I the to the of comparative can corresponding now will the of XXXX find turn our Investors will be kemper.com. each

Joe Lacher

improvement are to in Good The actions reported that prior reopening the our us. joining past pandemic-related marked quarter. Karen. have the showed has industry Earlier performance thank profit the and beginning afternoon, implemented results over offset you, today faced we've a from Thank everyone the challenges year. restoration you for we

While work we to the to return the target focused targets. addressing do by the We actions and return our have our still encouraged we and are impact committed results, to to long-term on pressures us having ongoing are financial our business profitability. remain environmental to

Looking to continues insurance the page four, face industry environmental to headwinds.

of and price index [ph] a on disproportionate imbalances. For had at is this index supply through insurers. Many high consumer example, sub impact auto the the demand XX-year have components running of

we've In prices. we've car environment. While, acceleration seen an truck increases, aggregate, there and and inflationary auto believe we body such some in medical will prolonged moderation be used other as a and areas, price expenses, care witnessed repair

correspond loss-ticks, and positions, reserve Our actions improvement prospective this and profit assessment. with current

Our book profit for restoration of three activity past rate points quarters. initiatives the auto actions. our over both rate filing included over XX% encompass of and on Rate non-rate XX

to levels. an life the the our our negatively quarter. incremental contributed overcoming to products anticipate ratio in for and our quarter ratio continue environment quarter-over-quarter persistency results be segment's we In continue the demand point and by headwinds. profit excess and cost. pandemic strong combined we XX improvements. actions, These surpass The to responses, inflationary sequential last activities and the impacted pre-pandemic along filing segment, combine continued improvement you see combined with financial rate Our health related improvement other benefit underlying When projections our initiatives market we provided above the

sheet ongoing the remains profitability mortality We as improve challenges, strong. materially expect balance to Despite normalizes. our

the activities. raised results of attractive affinity rates progress encouraged and at to our refinance support we've quarter. billion over liquidity. ongoing by made have restoration our We notes in initiatives capital and improvement the the summary, quarter $X.X additional this successfully We this profit I'm In

stakeholders, Jim for more for remain operating strength source discuss and are of results call well-positioned over to to a long-term detail. to now our profitable continue in We our turn growth. the I'll

Jim McKinney

Joe. you, Thank

Let's page to turn five.

provide our highlights few to Here offer a performance. we into insight

For we the per results impacting profit adjusted operating of most generated an diluted diluted previously of consolidated share, the and quarter, loss significant net a item net loss The per $X.XX our $X.XX share. is return challenges facing improvement and at home Until life target we progress will auto be environmental mentioned our quarter. this to industry. good projects and make on insurance focus restoration profitability, the actions

$X.X goal attractive Turning rate, structure support The of to offerings the We've continue strength XXXX. successfully working executed raise these notes insurance On senior achieved to September outline to liquidity our volatility, during due our six, and even objectives, debt by our heightened seven, refinance concerns. highlight our risk the of with market was capital initiatives, entities the billion additional sheet. inflation be business we the transactions and of these quarter. geopolitical driven diversify page capital We healthy maintain Infinity and page we historically balance at well-capitalized. a balance to

with in page the of investment heightened quarter, construction flexibility changes, these market our several we These to billion. risk the to took reduce our volatility. eight. effects additional for Net the philosophy. steadfast actions the remain portfolio. income increase portfolio liquidity in Despite In Turning $XXX combat quarter provide we actions and was us

are financial actions be match And sectors company's call financial In performance the to over environmental various turn the we the risk I'll on our time assets to and we take. although to to will we continue we P&C factors, now targets. will provide to continues where buy buildings us be details Duane by to return and taking segments. over our quarterly to we closing, that remain confident corrective our compensated capital the believe have for pressured We allocate

Duane Sanders

Thank good the be driven continue levels. you, Jim Overall, by everyone. miles XXXX and trends businesses to impacted P&C afternoon, exceeding

specification our Additionally, capabilities significant and headwinds, proper driven incremental loss offset by than pricing more these severity restoration inflation. pressure activities these challenges. was Despite

Rate approximately offset levels. than XXXX is adjusted and below X% more activities XX% non-rate mixed roughly severity trend. year-over-year Our frequency

the page XX and of points to activities. delivered to nine, compared with ratio The commitment Specialty restoration focus combined decrease P&C. benefited underlying to fourth our Moving business we'll quarter. from begin We an

taken state improvement nearly into profit meaningful rate adequacy of actions to in California. earning Throughout we book, outside benefit every near believe our balance across the are we entire expect from have we rate We year, the book. the of

X% further to of in the XX% or pressures. In our continued We're on non-rate filing X% file activities actions additional roughly Key environmental addition, additional of rate X% an the will planning book for book. an include of for second quarter. offset

continues some and achieved claim we financial competitive key growth, of due continued strong successful to objectives. force operational execution. distribution our targets. intimate our our business Further, and pricing our knowledge deployment financial of XX% our of being vehicle in aligned commercial up those exceed and year-over-year, our the our Notably, and were underwriting customers, topline Finally, our with to policies advantages, sophistication,

segment, let's Now, to XX the turn to page points. decrease also underlying preferred Shifting ratio auto combined of preferred XX. sequential the experienced

book. for Looking the rate first XX% the roughly the at additional preferred filed on our chart, of on upper an auto during quarter, of XX% right, we

in XX% We the will on of rate book with acceleration continue our of additional an second this quarter. X%

to the of core to states We Joe. long-term now on are with profitable continuing delivering reposition to focus intention this call I'll turn growth. book back the

Joe Lacher

Thank you, Duane.

and XX, highlight we products. to face segment in-force on were higher the Health premiums demand to value turned page due new policies Life our our we the by strong earned persistency business As both consumer & and sales of increased encouraged for

in of should based benefit COVID over mortality note, to Foundation, the We're achieving the Scholars life, impacts The of optimistic costs we next five college and February, in As subside, the of students initiative. Program. diverse we're Kemper award revert community supporting that the mortality On XXX efforts partnership next separate generation a our need about impact high Kemper announced the normalized this levels. scholarships program years. to with through

to this closing In As continued results noted, related to employees their improvement significant a our all and of the take resulted to support. the our I'd pandemic and for exceptional contributions in created quarter. challenges. actions to our thank conclusion, like moment reopening

are not yet. done We

will We address as as and approach to target environmental the profitability to continue pressures business diligent our quickly return possible.

unlikely linear, call questions. quarter to improvement. we the now over for path is steady a to turn we continuing believe I'll be operator sequential progress the to on were While

Operator

you. Thank

Peters will the Q&A begin Raymond now James. Greg [Operator open. your is We of Greg, session. line from Instructions] first question comes Our

Greg Peters

good Hey, everyone. afternoon, Great.

outside -- of nearing So, to California, I was that that are I listening made, of to your comment prepared for Duane the you comments on was which a adequacy. rate focusing and wanted moment

some underlying what So, at in quarter, your like that's Or what just you terms us combined that targeted give levels? ROE ratio in that does of of that? running mean first by look meant perspective the does the ex-California

Jim McKinney

McKinney. Jim is this Greg, so Yes,

step perspective generally if way a don't of kind but we earn to that think to we life as through of XX% the cycle, about know follow of you As kind that take we XX% to guidance, highlight to back, ratio kind macro expect combined ROE. a of the provide the we

and today, we And can seasonality those helps. you you and that the somewhere both the might to little, quarter more policies, to averages pricing where those XX%. -- kind to you a of you're Hopefully, Understanding of So, XX%, of one achieve those the totals would if have. we between we could in could would of XX%, might there's that XX% then XX% XX%, other that we're outside, that books at think periods, think when books be to objectives. kind business you about sometimes back in, about renewal with a think new come like looking from be might relative have kind -- that

Greg Peters

a rate provide progress guess your you're where an adequacy? there's an data guess to give with us us. market, only little in and you with can you bit. that being are on update I -- rate California much -- understand I Yes, market it update to relates largest your as I so I going

Joe Lacher

to helps I four that. there been would trying sort you're one in estimated a that talking Duane's tell back most all on maybe something. structured relative on Florida or say latitude date X.X%, in adjustments in made and nearing all this X non-rate an right I for -- meaningful say actually rate we'll of has good reach continues what it and environments. so or about they're activities. tag the of We've if new it's four rate when rate programs fronts. communicate rate that feel we department the to for significant a we're in where to we and is taken non-rate we bit. adequacy, in making get making and and -- is we bit. on is programs progress get opportunity from those we're different. folks the four rate have those rather might We different programs, mean was those are little comment those when of of communicate different on we're further process. within to they there's amount a -- you typically Texas There to progressing activities is a all Yes, we in Greg have file the those Q&A particular bit that enforced up book don't or in think in let's we California, is be we've that Jim What impact on where say, given improved combined of forth, make the taking than to is of results point with We've trying little actions When businesses, a a We're at end anticipated top of we're have blend taken have part show the what's for but the where the adding where progress no non-rate to a point little team programs, abilities sort of the of of month now, we on the the updates say, that starting come we full And is, in, earned that about -- and have if the meant different to that, Joe, filed the you of going to forward, renewal the where a renewal adequacy, to the

Greg Peters

and clarification they're on non-rate I policies, helping, a And bit going little appreciate that. given can That's because that a -- one talk the I actions, exactly And I -- clearly on that? big what about thought just was renewals. of the guess, you that's so, have policies chunk and year on the

your the with you On policy form switching renewals, existing a year the for you policy sticking are customers? six-month traditional form? to one Are

Joe Lacher

So, level. might I'm that going as to adjust things. of non-rate we a a XX broadly effectively where no. some to decision precise and means in we the From have question think done rate tier an at yes/no some something we're or and price underwriting, or rate, was take where -- perspective, that for is and our something not We are rate cases, most competitive adequacy might drops which doing example other you, an within putting a in it say change for we'll less a that and is six, something you're In might think answer the tiers two, have there state, try example. level level, we to might examples. going qualified a are single of it's taken a a best of or I every underwriting at examples. now because it's and cases, program We've higher a different variety all now -- is They're In pricing criteria. and have they're lowest these tier a all tier, that's

be that level ineligible. Something might our in highest was rate now

that In the most a just in underwriting of stance might where we're payment. cash are states down to the certain sense, the we something the the take most billing to -- through The where certain we flow say it of month a plans, we're case where is adjusting least the one we have might that's likely because In do cases, dynamic, might things -- want business we now liberal on. or the other we have So, that moves most non-renewing going XXX% payment, liberal reduces go to cases, that's that are customers exposures. conservative other take effectively and taken it fewer the down in result ability tiers. we

cases, or we've we reduced not compensation and terminate that. be agent In that either agents individual might -- that individual might should agency we're taking that that might agent. you we're the driving other override Sometimes to restrict relationship assume we we're all writing or programs, reducing modifying

to changes base So, and in and lowered some that. we've also We've move liability-only. we've full coverage done where restricted commissions cases, made

coverages As a I think coverage liable liability-only include of most we're after physical bodily injury you to accident. are where coverage third-party aware, damage and an

towards lot driving of of related all those related. damage, losses so coverages. plus a right shifting lot that's our of lines the are liability-only, metal And inflation a first-party coverage are has to we since of through metal the reduce now By coverage that

cases, cells, answer. So, we're that some six-month we changes we've the right the not And but But right months providing shifted from mix board, across the it's policies. sporadically underneath. the think XX always where that to for in doing

of what some we're -- Greg, and all that in for? might types looking all them Is the and it's doing scratching again regulatory of medicine I it get edge that on So, needed activities. it, I mix you highlight but the much depending a were on know others spot. of to said depending parts those get them In it of how is might of is environment geographies,

Greg Peters

presentation, we quarter for was chart looking but think progress the and forward excellent you But XX. it. anyways, quarter, registered that Well, I I in the it visual was what that's to progress had to looking the thought on number was in I illustrative that first realized you others for. the -- in quarter's chart, the of for thanks I put one I other results. detail. have have wanted last questions, out queue. was the That detail. slide would way that can there's like I point that a just to slip that was second exactly I maybe seeing

Joe Lacher

and were why to It's rate of to combination has XXX% has up helpful, there's we quarter, is the try the with improvement. I'm specifics and is it it sure happy last and it's earned non-rate believe the combined confused can to tied the rate in if But sequential not XX-point what the on it showed albeit last We we not it's whether back back. getting of move there's What We're bring basis you that clearly that the we're XX. activity, expect helpful. in standalone in chart if earned we're ourselves we saw bring you the is you trend, -- the tell clearly chart that if a to process. non-linear fashion. earned are surpassed future, I trends, go loss -- And wrestled foreseeable that the we exceeding earned a in getting the part rate rate of to the non-rate closer just which And and that slide and important part back forecasting benefits forward inflation.

Greg Peters

impact, Got chart. it. non-rate versus about reflected that your is in rate not having an Well, non-rate, both comment the

So, anyways, thanks for your time.

Operator

The next question Matt, is line Matt of line open. Carletti Thank you, Greg. of comes your the JMP. from

Matt Carletti

months, least that it'd so the and kind your from basis ROE of through knowing or what non-California rate adequate be year, the another adequate kind assume at on and Good thanks. then at those, target of, the or earned over one this. Joe, probably we part through next the of level that meet book. expect strokes, of misinterpreting levels about basis and being of you in be earns Greg's now, on know business, afternoon. year talk I'm the asset to broad today kind to very you'd a written on I of, But reasonable you point. the way, rate implies follow-up questions, earned all today, XX a wanted so as that book get in just expect your book to Hey, earning non-California new high part Said that when hurdles

Joe Lacher

may perform little periods let a and that renewals tag vintage. clarify about think business In a team Matt me bit would bit. you you and would would question, again, a worse typically expect than we of time, this, Great new normal

If book but time. you'd of be wrote season's in new. you expect aggregate would on you off, and be first you your about wrote renewals took good over you a better And series new the in get that XXXX, if period, you the but feel as and put improves the the hurdle lifetime less might than business business it, actually that it might entire it just that in that the of new cohort, rate, would over

of a trying you rate communicate calendar vintages to What month that combined will it the looking target mix book today, or put So, on the and calendar that, business the that we a rate that's our all this the vintage put we're on the renewals. we're basis. last are almost a the on that believe year, getting near life vintages, increases new the before impacts. on be On at you've non-rate put on over putting the renewals of is year in of business new year simultaneously and the we adequacy basis, near have that new year we business impact we the got the

result you of So or on each -- policy a at -- results seeing you're basis things year difficult, impact. on laying think calendar That's a to the year, guys vintage and or of our a these basis when we we think not we I'm earned other. the quarter be trying are and looking top calendar but it

it and intrinsic more get little It's And calendar that's so underlying because I why exactly an model says doesn't after. you're it perspective, think to comment is us related important the we're the we things will feeling adding where calendar to vintage translate were from that are still value years. and trying the to the over impact what making year at There's how a those still piece the that a on several point states about next renewing. we're we're earned perform good the catch-up and little it for business a of a

we whatever business put last where November wanted was, us to hindsight it As it on last we new might have would an example, be. not tell been the

to needs to couple Did exactly of I confused it did be. where rate more, needs And I helped? so it a get changes

Matt Carletti

for -- I And helpful, That's very other from I'm second like level away high then as a portfolio. relates down and that's helped. my very that shift the was -- underwriting No, very helpful. though, investment going in question to

me slide like XXX yield, kind looks next So, what's the maybe money you investment yields of, I new And of, kind rate numbers for net with kind for Jim. bps rolling that what's investment there? -- year, and think of then new some of, should the into kind -- of the there, up does portfolio annualized gap how this about are over see it's see on I today the kind a we of with year-over-year, can how compared to X.X%, so -- reinvestment? book help

Jim McKinney

No. question. Great

a ways couple of look So, it's I both and important. bit think there's little but a to at actually they're nuanced, this

life about thing first spread a specially The is remember business, to -- make our to is inside right. business,

What looking So, us component at that that if are look generally to a I little yields yield is things through we're today that is for inside period you and at increase of right the vintages or that is about rate enhanced we're and a yields, building over crediting at us. we're are where really going income it expanding tell decrease. that essentially it's would higher better, constant the for whether bit how you or just highlights much a is the while

and that period year, quoting going I'm so an long will up something though to that, time, to over play you Now, over see jump it's just the you're of million or see extremely going out $XX million. million next like coming numbers, $XX might see or like you $XX $X -- even million, like won't not

seeing a to I perspective, changes, the some a the way environment P&C our what time then going of at. is that slow just shorter, equal here of businesses, little interest forward, And a where a think you that kind kind there amount. created that's that over the whenever roughly near future, of kind period which as of till hopefully seeing from come from -- of, and be kind long here kind is saying even incrementally value That's increases better. things yield might you're things to in is go we're not of in the So, you're steady off a of just keep duration these where you're have though but perspective, bit little rate inside

Matt Carletti

Great. Thank both color Thanks. you for the on helpful. questions. Very

Operator

Thank you, Matt.

of is from Newsome Sandler. your is question Next line Paul, Paul Piper open.

Paul Newsome

corollary you it I on afternoon. we for increases that I obviously, would And California? be, say your Thank prospectively is match view And little inflation, outside you Good guess claims your views topic? is about of sort on call. the to whatever that to ask perspective on the you of of book further expect to what's rate bit your a inflation. moderates, fair wanted should you've but had, hopefully, think in a that the that bump

Jim McKinney

again, I Paul. tag at know, great question. This is I team Jim, think we'll

kind of some to generally things XX trend, we've say of severity, if either seen points, kind has and about anywhere year-over-year think on were that line come business I So, the of through. XX depending of speaking, between,

that While where quarter-over-quarter. couple it big big sequential points it confusion, actually really of on it's to and -- number, seems a like that within a was essentially is number avoid of a a is

you've of think that's see little I moderation. bit a important started because to

quarter. kind year saw we Now, spike and the moderation last fourth little third further quarter, then in that you the a said, in saw of

and backdrop fall sequential be still decreasing. inflation, in it's I there's it XX of to the like the does the going seven But time, XX, five sequential bit if like can of quickly. But of say down point more there's at the where to gains at to and little a kind quarter feel going some things we pace to it moderation, this come over not on going don't the quite incremental change be gains to you the were say, was there while will. in that year, from, same environment for that these that feels So, up last has it's here, it think inflation,

rate inflation made The perspective. is doesn't yes, we that change what and elements the and much trend secondary very component here, going after this they that slowing are from comments about in a I least the highlight continue of will stopping, to quarter-over-quarter future changes. continue to that point work quarter some The are expectations or of to we're price our to would that for time bit driving and just it because seems not sequential in quarter underlying to it point, appear little stopping is at the inflation at be terms are be

Duane Sanders

This is Duane.

the need more, getting more take and the those the get, we'll trying where ultimately rate depending our target In shoot what to more we'll inflation to to take rate of towards --we'll we profitability. -- us mean, we're I we going terms of for to component, combination non-rate continue feel we we'll on And If activity, the like accordingly. need is be. respond to

Paul Newsome

but what And a a retention or have what market retention, think going there's then in market. a the happen as customer an of rate, folks of general. wondering question, lot my with perspective, we the other obviously, of I lot of shopping, could second in change lot might higher rate, lot higher low on rate awful take we taken environments Usually, was sense. in we Make think you

on thoughts your what a what's So, might we see retention from perspective?

Duane Sanders

Yes, comment, forward-looking it's a it's generally, of maybe asking you're I market. a but think, the I'll -- make question and a ours, little Paul broad about

necessarily touch quoting an What they policies. agents down a to underwriting, it but in trying rates, midterm people up In retention or a moving and payment, towards those certain it a XXX% would being aren't increasing, process. you tightening describe in as so are market And might might winds see hard finding way shopping have I underwriting may lot did broadly. they've profit increasing their a example, as people aren't cases, restricted kind and quote of of new the what carriers changed is, different somebody I'll So, environment, business is their criteria way, before. because move that up they're most broadly or in actions, have times have make move improvement can't necessarily that to goes where this what you be some harder moving

get eventually So, in new I while, retention frequently makes starts because moving market's hardening, and a little reduction they to drop, business. a see are. again, hard. That where to there's adequacy, a then believe about aren't an get dynamic availability bit business adequate and retention the feel where feel in and it willing more would the not switching, other of to you rate customers side But good the as on they folks little because are that that see they're you will carriers they new to When got where uptick you'll occur rate move. but at for available expect and the change. it's

think a the while for that's market. little I away

Paul Newsome

helpful, you. appreciate Always it. Thank really

Operator

Thank you, Paul.

from Next UBS. question your line of open. Brian is is Brian, Meredith

Brian Meredith

thanks. of Yeas, curious. here. couple kind kind last Did that the fourth assumption does of versus trend your you quarter A just of in them improve? your free decrease just first the outlook, I'm quarter? inflationary

Jim McKinney

obviously, you, to were it change is other non-rate tell we've get in kind we or we -- these of in versus have of we're will trend the what to able bring think on continue obviously where aligned. flowing through any just, looking come that I actions through. and to things And of that's inflationary books appropriately it's Jim. really progress -- I then Relatively, terms sorry, of constant kind No, Brian our kind this rate at make

forward the take with if environment, really anything, that highlighted, that kind put for representing kind really these future favorable the of we you we've real if view think settle up, this forecast holistic what saw the you in reserves some quarter, would all of, QX of think, I to out. we in development modest back, where this about the things XXXX, change way tried additional thought where and we large is

I thought neither think what this fruition in increase from bit in was of just you're out to kind sitting, out. I'm a little of seeing at a coming we real to with kind going stage, trend nor play playing how and line is it really decrease, that substantial least a at right where and

Brian Meredith

about start think "rate those question where my at you're may then the now the off of talking book? to taking a about you I you're second start And Great, the Are I that's you call, or to if actions" helpful. half guess try to "non-underwriting states adequate". is considering point some grow are

Joe Lacher

point. working spot we're to at at and we're another of We it. see at where, a quarter Yes, these things through that certainty Brian, around a really least want get way not their

seen time, in the confident don't to the are, forward be environment question highly about We're inflationary it's other uncertain and and we we've taken, a that, balance we're our lost actions you with our want where an to is we're highly we've I lost picks, in sheet. a anything the of inflationary certain think leave than certain on about numbers what we're pick going basis. I our confident

that all, growth a favorable we're that Jim a can bit, environment's development, view we a for new at point so trend. at on we're consistent gas had You lost described, see stepping watch a of the But not moving we'll bit. little business that where that a

Brian Meredith

a just then Got curious little time the book, on where it's you -- of, kind position book and your to more this you're you. specialty a in here? similar of bit is grow a thinking kind are rate And commercial adequacy also

Jim McKinney

In dynamics Brian, through? remain Again, bring in relates of kind regulatory the our what kind really with the of financial thanks, different of terms in position to differences additional steps, and can play in for that folks, kind retail been a clearly market to commercial environment, So, those availability represents people auto for of strong some been the and kind and as we underwriting market, rate and that able solutions flexibility different it just approvals, commercial exceptionally to market other this you auto -- of and giving little book. those underlying through maintain obviously, a in very into the how able we've of book perspective. trend match from

where availability. we're things, And match those so continue able we to maintain to that

we'll things able we where outside in we'll us a grow that to have once point come states And same And side, with strong position, the largely and develop our and to a commercial we with there, and will think here we're California. policy to, lot again, at in up we're how some see adequacy, there -- California. continue really pricing do provide closer we'll see that how rate access. that continue You'll that the then time, do on match,

Joe Lacher

I roughly and add XX% that, Brian, to out XX%. CV running just But question, combined, a to PIF at the Jim, mean, we're its growing

it's we're the pretty like gas on shape good So, there. we're pretty good. already That's -- we're in -- already

Brian Meredith

the one now, little your competition a to nine six you last are Got it, bit of you one. of by you you. but kind Got ahead months, months? about landscape alluded do briefly talk quick And right you. Maybe months, three competitive think just then

Jim McKinney

different in say to hard It's Brian. spots,

We're year. different it They're think I because year this what the terms we see watch what lot going we carriers ago, their different we were And are seeing starting that's look in to running on they're tightening things a say didn't quarters that be watch high recognizing who I prior to way perhaps last great. competitive described. metrics, saying on are in having We're see can when and we most of was broadly raters rate relative cases, They've read the development, is or the some quarters loss to who in of competitive couple tightened. think are. market three at and that recognize to what reserve see most got markets. what environments, and things in ratios fit seeing Starting big up a we of now. they the two only behind -- We're returns doesn't, comparative positions last we it.

the depends non-standard describe usually are on it and some you competitor, of spotting -- players -- how bigger seeing pieces. we're So, are

slower companies and catching of Some smaller, are it. are just now non-standard the

through, filings, in that Our they'd I review, to their they market they and starting annual we're when when were their they speculation stat some before maybe actuarial think doing of see different was went seeing that were responses. than temperature maybe a see

So, this. been ahead I of we've think

we earlier. issue saw think I the

change are I it quarter. up the that was and and results And point caused result you wasn't watching trend a look applied. it trend. sense if a they what suggested is point my tick it were playing of XX improvement Results impact. up. forward and the I of sequential -- seeing think trying of think I a see view is medicine answered different was and It think their view medicine to was that's your folks And was what the catch as versus digest needed of we just question loss they're at trend, first

Brian Meredith

you. Makes Thank sense.

Operator

Brian. you, Thank

Kligerman proceed. from Suisse. Credit Next Andrew please is question Andrew, of

Andrew Kligerman

lot Hey, the of lot. A detail prior thanks Q&A. good a on

And over just on I'll much us in from So, Could actions to action? combined you do ratios? those. ask book the some this these time you how a follow-ups non-rate of benefit give benefited expect non-rate book how much sense the of from quarter improved

Joe Lacher

we'll Andrew, the asked I'm it try not going that, to answer So, answer way to exactly you to and I'm help. it trying

said slower, a state described it more. needed we as I we've state whole What which and thought didn't unquote, have have the of where action, non-rate to All described geography, not last a might and that didn't might every profitable XX it, and also is state, every much going points half experienced varies from we used some move, come a where between of was the third likely improvement they policy, activities. It vintage non-rate book some of by because one we've some rate, to Again, that because rate through book was in it need need a of been highly activity in from XX or or it extent gotten but somewhere but we non-rate benefiting quote has mean and it. rate believe doesn't the need impacted, might the be was level is profit quarter, every policies the it. had has we

a the now a will half solve on entire come for entire that's different. given and to that in the or time book be comment At from will periods, non-rate. problem, total So, third number

earned the will the now -- little You'll right is place. rate at rate a bit actions of higher take it and impact probably little -- wane the some a

you the which a my to measure quarterly you not do. role I'm what But trying to can't to I'm quarterly be of total, elusive, but with can different what help sense for. in a I trying components you be looking get So, really do we is might forward, model

Andrew Kligerman

That helped was sorry, were you That following me I'm good. triangulate. on.

Jim McKinney

a I trends back, align probably take, can were to model step I to I about Jim. might might that. on Joe think largely you're is improvement get then if a perspective. take be that trying to match the And you a the might from a What above said, what little actions bit the we like is can the this to that Andrew, little underwriting a what about earned way I out for because When as a some just add how out think continued rate we reasonable bit or see maybe going I improvement, with was just of Yes, it? about to we think -- you what severity in of might think proxy

little the a something, in get that a might a you answer. changes differences reasonable But little or Now, environment of bit bit a of some materially there'll forward understanding or be might trying more this or kind something here of, could there about in think an to if be between what are path to to like starting place, if appropriate get look to our returning how of you of profitability. walk you levels does different

Andrew Kligerman

triangulate. helped then I Definitely it ask me a different question And has to think way. a

you little Brian asked I rate first for of rate book, quarter. mentioned little was commented and I bit in then about new think maybe asking on to that the the you I -- about the differently, another the adequacy getting guess XX%, a then using on the guess write of rate additional rate and call shows balance business, on a XX% then XX% X% the saw on the I slide you quarter,

you increase? point continues much to needing cost increase Aside where won't from at you be other if loss a California, are rate than

Joe Lacher

to of -- I'll you're filed chart right back page nine that got looking couple corner, you've on and there's you a both So, point and think -- in at effective. top things, the I

comments not talking to on there's comments same at get I'm will you're giving sure you is are filed, perhaps effective and not adequacy depending long-term one each So, rate do I think, in Texas, of a both intentionally we've we ourselves and case, or each which about specific quoting, also to so again, made make a I'm we're look in the talking many -- of What them. about times of piece. state, that Florida the

increase a trying thought to we general cover I'm or on were a seeing statement. were to adequacy rates either vintage, more we rate inflation, we need we if make to then now be at it the So, the underwriting. business receptive we inflation in by long-term to the priced new need underwriting If matching thought state would we that be to write. is results off what and rates the those, we would tightening raising and and better we warranted If the economically it, adjust restricting could we

the would higher So, we'll couldn't we prices thought rate that inflation could was execute rate look we we we If Jim's rate to we quickly and than as and get perspective. a underwriting. earlier, a tighten moving the as at point could from that set, get to

a was time So, more volatile pricing we're than and Brian of comment collectively we're Part a going continues to matched. my to to and get bit to to. try volatile the to those used be it of the adjust valve

made until stabilize our like very to this period a and we're it's going more before at growing, talking So, were but a we've to we certain we we're of we committed have adequacy. point the feel think to to making it's when covered. emphasize bit trying But target rate we're bit we're long-term inflation less a rate I before get bias or shift. adequacy, growth that on we've again, to we've got that's nuanced bit it a near a about very that higher answer, is long-term achieving little on a rate, profitability And got sure we're got bias Duane and and

Andrew Kligerman

based you XXX, How last just the was capital of there the bolstered much quarter-over-quarter improved -- a ratio XXX that? capital capital from then insurance risk one mechanics underwriting was entity? could you downstream the one, to make sense. color Makes loss, And on how give despite the if to little

Jim McKinney

question. Good this is Jim. so Yes,

about when think on something to to last us I going that you think I capital I'm quarter. orient again, us, and said

components and line of think have then we investment change one Holdco, risk $XXX about great the holding then flexibility another, as system together, or to strength, within got to because capacity fundamentally flexibility there opposed a our we see. focusing metric we've as capital additional You the a dividend like great perspective, change that have ability have we how really that of kind to the over just company both have the of source whole of plumbing at also works and million on got -- from you would risk the subsidiaries. And other allocations, levels see we can weighted asset would we that in levels assets

investment, the those took the we pressure away is. not inside we which if And you think I which the rating walk of thereafter, capital to other I trying or term and really thrive future, do or So, we're And any actions the of to to from different continue remain to are perspective, changed through going is I is anticipating bunch even like well-positioned I'm think raise or activities capital going be to very that that to about are something appropriate some then and there And of environment expectations it. in medium to should our to And going were the -- we this assuming point bit a of strong. risk aren't no to that flexibility quarter, you're subsidiaries it, navigate to near-term we're but elements really other credit there. that of did a are drive put each type have little that. where portfolio financial are also both down that think that

Joe Lacher

one or account, to using grossly to safe the a that Jim sort be into the we're get just and and add of that just statement, take of wrong point inside looked RBC it. misunderstanding you've that, to and answer. -- sophistication at Just the to got Jim, it's plumbing if marker how the That's place number, P&C you you'd you're going

Jim McKinney

Yes, that's said. well

Andrew Kligerman

Got it.

Joe Lacher

in of terms I and your think we've are so-- at, question plans the where we're hopefully, answered what

Andrew Kligerman

you. Thank Definitely.

Operator

no at for any Andrew. time. time, no back this And to There you, further Instructions] this questions there team Thank additional hand like at management over [Operator are questions waiting I'd to remarks. call are closing the waiting the so

Joe Lacher

you, joining Thank Thanks for operator. us. everybody

profitable I progress think committed ratios, continue going very I'll positioned comments are that into to underlying anticipate before in basis, and that by my forward profitability a closed going again target for I combined with to and reiterate growth. our just we're get encouraged that's long-term improvement strong the hitting and on

for quarter. thank look interest to time So, your forward talking next your and you and again

Operator

participation. all That conference earnings first quarter XXXX concludes Kemper call. the your Thank you for

may You disconnect your lines. now

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