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), and ROE of 10.8% (adjusted ROE 16.7%).

• Specialty P&C segment delivered strong profitable growth, with sequential policy-in-force (PIF) growth of 4.5% and improved combined ratios; Life segment continued to generate stable returns.

• Book value per share increased to $43.30, up 11% from year-end 2023; adjusted book value per share rose to $27.88.

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

• Hard market conditions and increased consumer shopping are driving profitable growth, especially in auto.

Financial highlights

• Net income of $73.7M; adjusted consolidated net operating income was $105.0M ($1.62 per diluted share); net income per share was $1.14.

• Specialty P&C earned premiums were $919M, up 3.3% year-over-year; PIF grew 4.5% sequentially; net premiums written grew 28% year-over-year.

• Net investment income reached $111.1M; pre-tax equivalent annualized book yield was 4.8%.

• Catastrophe losses for the quarter were $16M, with $11M in windup preferred P&C; catastrophe losses and related LAE for Q3 2024 were $16.4M, down from $47.3M in Q3 2023.

• Combined ratio for Specialty P&C improved to 91.7% from 109.9% year-over-year; underlying combined ratio at 91.3%.

Outlook and guidance

• Expect continued PIF and earned premium growth in specialty auto, with combined ratio projected to remain below 96% and migrate into the 93–95% range over the next four to five quarters.

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

• Anticipate ongoing growth in California, Florida, and Texas, with smaller markets accelerating in 2025.

• Hard market conditions expected to persist into next year, supporting further profitable expansion.

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