Slide 1: Second Quarter 2024 Earnings
Second Quarter 2024 Earnings August 5, 2024 Earnings Call Presentation – 2Q 2024
Slide 2: Preliminary Matters
Preliminary Matters Cautionary Statements Regarding Forward-Looking Information This presentation may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform A
Slide 3: Leading Insurer Empowering Specialty and Underserved Markets
Leading Insurer Empowering Specialty and Underserved Markets Enabled by a dynamic, diverse and innovative team who act like owners Delivering appropriate and affordable insurance and financial solutions Specialty auto insurance1 for Life insurance2 for underserved markets; Latino, low/moderate incom
Slide 4: Second Quarter 2024 Summary
Second Quarter 2024 Summary Specialty P&C underwriting profit further improved; sequential quarterly PIF grew 4.6% Achieved return on equity within low double digit target range • ROE of 11.5% and Adjusted ROE1 of 17.6% Shareholder • Net Income attributable to Kemper Corporation of $75.4 million or
Slide 5: Second Quarter 2024 Financial Summary
Second Quarter 2024 Financial Summary Delivered fifth consecutive quarter of underlying business improvement Quarter Ended ($ in millions, except per share amounts) Jun 30, 2024 Jun 30, 2023 Net Income (Loss) Per Diluted Share attributable to Kemper Corporation $1.16 $(1.52) Adj. Consolidated Net Op
Slide 6: Well-Capitalized Insurance Subsidiaries
Well-Capitalized Insurance Subsidiaries Continued access to significant sources of liquidity Parent Company Liquidity Risk-Based Capital Ratios¹ HoldCo Cash & Investments Life2 Borrowings Available P&C (ex. AACC) Under Credit Agreement & from Subs $1,433 $1,336 (%) $1,148 $1,124 ($ in millions) $867
Slide 7: Diversified Investment Portfolio with Consistent Returns
Diversified Investment Portfolio with Consistent Returns Net Investment Income1 Highlights $106 $107 $105 • High-quality portfolio provides consistent $93 ($ in millions) $100 $9 $10 $7 net investment income; 71% of fixed income $1 portfolio rated A or higher • 4.6% pre-tax equivalent (PTE) annualiz
Slide 8: Specialty Property & Casualty Insurance Segment
Specialty Property & Casualty Insurance Segment Underlying combined ratio1 improved 4 pts sequentially and PIF grew 4.6% sequentially Highlights Cumulative PPA Rate Activity Since 2Q’212 • Underlying Combined Ratio improved 4.0 pts sequentially to 89.6% Filed Rate ~59% ~58% Written Rate ~53% – PPA e
Slide 9: Specialty Auto – Policies In Force Metrics Continue to Improve
Specialty Auto – Policies In Force Metrics Continue to Improve New business expansion led to sequential quarter PIF increase Commentary Sequential Quarter PIF Change • During periods of significant change, sequential quarter PIF variance provides more insight into new business trends • Sequential qu
Slide 10: Life Insurance Segment
Life Insurance Segment Business fundamentals remain stable Highlights • Modest inflationary pressure continues to impact low-to-moderate income consumers – However, new business production and persistency are slightly favorable to prior year • Mortality in line with pre-pandemic experience • Quarter
Slide 11: Key Takeaways
Key Takeaways Specialty P&C • Sequential underlying results improved for the fifth consecutive quarter • Strong 2Q’24 underwriting profit with underlying combined ratio of 89.6% • PIF increased 4.6% from 1Q’24 • Expect low single digit sequential quarter PIF growth for remainder of 2024 Life • Under
Slide 12: Appendix
Appendix Earnings Call Presentation – 2Q 2024 12
Slide 13: CRE Exposure Predominately High-Quality Fixed Maturities
CRE Exposure Predominately High-Quality Fixed Maturities Commercial real estate exposure represents ~8% of total investment portfolio $688 Million Commercial Real Estate Exposure ($ in millions) Fixed Maturities1 30% Other Investments 70% Fixed Maturities & Alternatives Average Rating AA Asset Class
Slide 14: CRE Portfolio Consists of Diversified Underlying Property Types
CRE Portfolio Consists of Diversified Underlying Property Types Office exposure represents ~2% of total investment portfolio $688 Million Commercial Real Estate Exposure Breakdown Diverse Property Type Mix1 % % Total Type $(M) CRE Portfolio Multifamily $245 36% 2.8% Office $188 27% 2.2% Retail $63 9
Slide 15: 2024 Reinsurance Program
2024 Reinsurance Program Renewed Catastrophe XoL Reinsurance Catastrophe Reinsurance Program Highlights Catastrophe Excess of Loss Program (XOL): 5% co-participation 3-Year Term 1-Year Term Placed 1/1/22 Placed 1/1/24 • Program consists of two towers: Layer 2: – 3-year term placed in 2022: $100M xs
Slide 16: Auto Inflation Pressures Remain Elevated
Auto Inflation Pressures Remain Elevated Pace of increase continues to moderate Price Indices (Indexed to Q4’18) 160 150 140 136 130 132 123 120 116 110 100 90 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 2022 2023 2024 Bodywork Used Car & Truck Medical Care Core
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Consolidated Net Operating Income (Loss) is an after-tax, non-GAAP financial measure and is computed by excluding from Net Income (Loss) attributable to Kemper Corporation the after-tax impact of: (i) Change in Fair Value of Equity and Convertible Securities; (ii
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures Return on Adjusted Shareholders’ Equity is a calculation that uses a non-GAAP financial measure. It is calculated by dividing the period’s net income attributable to Kemper Corporation by the average shareholders’ equity excluding net unrealized gains and losses on fixed
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Consolidated Net Operating Income (Loss) attributable to Kemper Corporation Three Months Ended ($ in millions) Jun 30, 2024 Jun 30, 2023 Net Income (Loss) attributable to Kemper Corporation $75.4 $(97.1) Less Net (Loss) Income From: Change in Fair Value of Equi
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures Return on Adjusted Shareholders’ Equity Three Months Ended ($ in millions) Jun 30, 2024 Jun 30, 2023 Annualized Net Income (Loss) attributable to Kemper Corporation $301.6 $(388.4) Average Shareholders’ Equity1 $2,630.5 $2,579.6 Less: Average Net Unrealized Gains and Lo
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Book Value Per Share As of ($ and shares in millions except per share amounts) Jun 30, 2024 Jun 30, 2023 Kemper Corporation Shareholders’ Equity $2,671.2 $2,512.2 Less: Net Unrealized Gains and Losses on Fixed Maturities 685.9 640.5 Less: Change in Discount Rat
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures Underlying Combined Ratio Three Months Ended 2Q’24 1Q’24 4Q'23 3Q'23 2Q'23 Specialty P&C Insurance Combined Ratio as Reported 90.7% 94.8% 98.5% 109.9% 106.5% Current Year Catastrophe Losses and LAE Ratio (1.2) (0.5) (0.3) (0.7) (1.9) Prior Years Non-Catastrophe Losses and