Kemper (KMPR) Q3 2024 earnings summary

Executive summary

• Net income of $73.7M ($1.14/share) in Q3 2024, reversing a $146.3M loss in Q3 2023, with adjusted consolidated net operating income of $105.0M ($1.62/share).

• ROE reached 10.8% and adjusted ROE 16.7% for the quarter, with book value per share rising to $43.30 and adjusted book value per share to $27.88.

• Specialty P&C segment delivered strong profitable growth, with sequential PIF growth of 4.5% and underlying combined ratio of 91.3%.

• Life segment delivered stable operating results and strong returns, with adjusted net operating income of $15.0M.

• Strengthened capital and liquidity positions, with parent company liquidity at $1.3B at quarter end.

Financial highlights

• Net income of $73.7M; adjusted consolidated net operating income of $105.0M; net investment income reached $111.1M with a pre-tax equivalent annualized book yield of 4.8%.

• Q3 2024 net income per share was $1.14 (basic), adjusted net operating income per share was $1.62 (diluted).

• Book value per share increased to $43.30; adjusted book value per share rose to $27.88.

• Catastrophe losses for the quarter totaled $16M, with $11M in non-core/preferred P&C and $3.6M in specialty P&C.

• Total revenues for Q3 2024 were $1,178.9M, down 1.7% year-over-year due to the exit of Preferred Insurance business.

Outlook and guidance

• Expect continued PIF and earned premium growth in specialty auto, with combined ratio remaining below 96% over the next 3–5 quarters.

• Plan to retire $450M of senior notes due February 2025, supporting balance sheet strength.

• Net investment income expected to run at $105–$107M per quarter.

• Focus on long-term profitable growth and maintaining strong capital and liquidity positions.

• Management expects continued improvement in Specialty P&C profitability, driven by rate increases and lower claim frequency.