Kemper has increased the excess of its loss reinsurance program for this year by a third.
The rise, from $225m to $300m, comes from what the insurer says is the ‘increased size of business’. The current program covers losses at 95% of $300m in excess of than $50m.
Wrote the insurer in its earnings presentation: “Limits align with our risk appetite and minimises our cost of capital.”
The increase in reinsurance excess comes a few days after Kemper reported a net loss of $105.8m for Q4 2021.
That quarter, said Joseph P. Lacher, president, CEO, and chairman in a statement, was ‘another challenging’ one. Lacher was appointed chairman in May.
He added: “The pandemic-driven environmental challenges the industry has experienced in the last couple of quarters intensified further in the fourth quarter, impacting results in each of our businesses. That said, we closed the year making significant progress on corrective measures that will become visible in the coming quarters.”
Lacher maintained that he was proud of his team and in how the organisation had responded to challenging times.
He went on: “We remain focused on managing through these circumstances, and our team will continue to deliver on our promises and provide attractive, long-term intrinsic value for our shareholders.”
Kemper did report that despite recording a net loss, total revenues in Q4 2021 had increased by 7% to $1,493.9m. This was, the company said, driven by $149.9 million of higher Specialty P&C earned premiums, partially offset by a $50.9 million decrease attributable to the change in fair value of equity and convertible securities.
In a statement, it added: “Specialty P&C earned premiums increased due primarily to the acquisition of AAC and growth in existing portfolio. Net investment income increased $5.7 million to $108.4 million in the fourth quarter of 2021 compared to the fourth quarter of 2020 due primarily to higher levels of investments and rate on Company-Owned Life Insurance. Net realized investment gains were $21.7 million in the fourth quarter of 2021, compared to a net loss of $0.1 million in the fourth quarter of 2020.”
