Slide 1: First Quarter 2018 Earnings
First Quarter 2018 Earnings April 30, 2018
Slide 2: Preliminary Matters: Cautionary Statements Regarding Forward-Looking Information
Preliminary Matters Cautionary Statements Regarding Forward-Looking Information This communication may contain or incorporate by reference statements or information that are, include or are based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities
Slide 3: Preliminary Matters: Additional Information Regarding the Transaction
Preliminary Matters Additional Information Regarding the Transaction and Where to Find It This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication relates to the proposed merger transac
Slide 4: Kemper Is a Leading Multi-Line Insurer
Kemper Is a Leading Multi-Line Insurer • Multi-line national insurance company Key Metrics – Provide specialty auto and preferred personal insurance (auto, home & umbrella) Market Cap (4/26/18) $3.1 Billion – Provide basic life, accident & health products Debt-to-Capital Ratio 22.3% – Founded in 199
Slide 5: Create Long-Term Shareholder Value
Create Long-Term Shareholder Value Diversified sources of earnings; Sustainable competitive Growing returns Strong capital/liquidity advantages and build and book value per positions; core capabilities share over time Disciplined approach to capital mgmt Strategic focus: Consumer-related businesses
Slide 6: Taking the Next Step on Kemper's Journey to Unlock Embedded Value
Taking the Next Step on Kemper’s Journey to Unlock Embedded Value Continued Progress on Specialty Auto Strategic Plan Acquisition of Infinity Accelerates Momentum • Combines two leading brands in specialty auto Phase 1 Phase 2 Phase 3 insurance Work / Effort • Increases scale in specialty auto and a
Slide 7: First Quarter 2018 Highlights
First Quarter 2018 Highlights • Net Income increased from a loss of $0.3 million to a profit of $53.8 million resulting in EPS of $(0.01) and $1.02, respectively • Adj Consolidated Net Operating EPS increased from a loss of $0.08 to a profit of $1.10 1Q18 • Earned Premiums increased $46 million, or
Slide 8: First Quarter 2018 Highlights – Strong Results
First Quarter 2018 Highlights – Strong Results Three Months Ended (Dollars in millions, except per share amounts) Mar. 31, Mar. 31, Variance 2018 2017 Net Income (Loss) $ 53.8 $ (0.3) $ 54.1 Net Income (Loss) Per Share - Diluted $ 1.02 $ (0.01) $ 1.03 Adj. Consolidated Net Operating Income (Loss) Pe
Slide 9: Improving Underlying Operating Performance
Improving Underlying Operating Performance Three Months Ended Dollars per Unrestricted Share - Diluted Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31, Variance 2018 2017 2017 2017 2017 QoQ Income (Loss) from Continuing Operations $ 1.02 $ 0.69 $ 0.92 $ 0.71 $ (0.01) 1.03 Investment Related (Gains)/Loss
Slide 10: Stable and Predictable Life & Health Earnings
Stable and Predictable Life & Health Earnings (MM) Revenues Revenues $206 $208 $211 $211 $208 • Comparing 1Q18 to 1Q17, earned $53 $55 $56 $58 $53 premiums grew at a modest pace, primarily due to growth in A&H premiums • Net investment income remained $153 $153 $155 $153 $155 relatively unchanged co
Slide 11: Profitably Growing Nonstandard Auto
Profitably Growing Nonstandard Auto (MM) Earned Premiums Revenues • Business continues to expand market share in core geographies $266 • Comparing 1Q18 to 1Q17, earned $234 $247 $258 $216 premiums increased $40 million, or 23 percent, driven by higher volume and, to a lesser extent, premium rate inc
Slide 12: Preferred Lines Showing Improvement
Preferred Lines Showing Improvement (MM) $181 Earned Premiums by Line $177 Preferred Auto $184 $184 $182 • U/L CR improved 4.3 percentage points over $11 $11 $11 $10 $10 1Q17 $66 $67 $67 $65 $62 • Preferred auto improving; still below targets • Continued focus on profitability with claims, $104 $106
Slide 13: Consistent Portfolio Returns: High Quality, Moderate Risk
Consistent Portfolio Returns: High Quality, Moderate Risk Strong Performance Despite Low Rates Overview • Investment portfolio produced a pre-tax (MM) $82 $77 $86 $83 $79 equivalent annualized book yield of 5.0 $15 $17 $13 $11 percent in 1Q18 compared to 5.4 percent $9 in 1Q17 • Alternative investme
Slide 14: Strong Current Capital Position with Ample Liquidity
Strong Current Capital Position with Ample Liquidity Strong Parent Company Liquidity Risk-Based Capital Ratios (MM) (%) $734 $741 Life & Health Legacy P&C¹ $684 $582 $569 $404 $400 $385 $385 $385 415 335 430 $341 330 310 $330 $299 375 290 360 $197 $184 2014 2015 2016 2017 1Q18 Borrowings available u
Slide 15: Kemper
KEMPER
Slide 16: Appendix
Appendix
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures Underlying Operating Performance is a non-GAAP financial measure that is computed by excluding from the Diluted Income (Loss) from Continuing Operations Per Unrestricted Share the after-tax per unrestricted share impact of 1) income (loss) from change in fair value of equ
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Consolidated Net Operating Income (Loss) is an after-tax, non-GAAP financial measure computed by excluding from Income (Loss) from Continuing Operations the after-tax impact of 1) income (loss) from change in fair value of equity securities, 2) net realized gains
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures Diluted Adjusted Consolidated Net Operating Income (Loss) Per Unrestricted Share is a non-GAAP financial measure computed by dividing Adjusted Consolidated Net Operating Income (Loss) attributed to unrestricted shares by the weighted-average unrestricted shares and equiva
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures Underlying Combined Ratio is a non-GAAP financial measure that is computed by excluding the current year catastrophe and LAE ratio and the prior-year reserve development ratio (both non-catastrophe and catastrophes) from the combined ratio. The most directly comparable GA
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures Underlying Combined Ratio - Continued For the Three Months Ended 1Q17 2Q17 3Q17 4Q17 1Q18 Preferred Personal Automobile Underlying Combined Ratio 104.6% 103.1% 99.3% 104.3% 100.3% Current Year Catastrophe Loss and LAE Ratio 4.5% 3.7% 2.6% (0.1%) 0.6% Prior Years Non-Catas