Kemper Corporation has reported a net income of $51.4 million for the fourth quarter of 2023, compared to a net loss of $53.3 million for the fourth quarter of 2022.
Total revenues for Q4’23 decreased $187.4 million, or 13.6 percent, to $1,187.2 million, compared to the fourth quarter of 2022, mostly driven by $116.0 million of reduced Specialty P&C earned premiums due to continued lower new business writings, partially offset by higher average earned premium per exposure from rate increases.
The decrease in total revenues was also driven by $58.6 million of lower Life earned premiums mostly due to the disposition of Kemper Health that was completed in December 2022, and the annual review and update of assumptions under LDTI for deferred profit liability.
The Adjusted Consolidated Net Operating Income was $50.5 million for the fourth quarter of 2023, compared to Adjusted Consolidated Net Operating Loss of $23.5 million for Q4’22.
Additionally, the Specialty Property and Casualty Insurance segment reported adjusted net operating income of $45.3 million for Q4’23, compared to an adjusted net operating loss of $35.1 million in Q4’22. Results increased due primarily to an improvement in the Underlying Combined Ratio1 and the absence of adverse prior year loss and LAE development.
The segment’s Underlying Combined Ratio was 98.2 percent compared to 107.8 percent in the fourth quarter of 2022. The improvement was primarily driven by higher average earned premiums per exposure resulting from rate increases and lower underlying claim frequency.
The Life Insurance segment reported net operating income of $15.0 million for Q4’23, compared to a net operating income of $23.0 million in Q4’22. The decrease in adjusted net operating income was primarily due to lower Net Investment Income driven by lower returns from equity method limited liability investments and lower income from company-owned life insurance.
“I’m pleased we closed 2023 with a return to profitability and we are clearly on the path to return to target margins in 2024,” said Joseph P. Lacher, Jr., President, CEO and Chairman.
“The benefits from our planned profit actions have generated improvement in our Specialty P&C underlying combined ratio for three consecutive quarters. The strategic initiatives we completed during the quarter exceeded expectations, significantly increasing liquidity and strengthening our low-cost operating platform.”
“With these solid results, we are transitioning to the next phase of our journey and are focused on a thoughtful balance between continued improvement in underwriting profitability and new business generation to optimise long-term profitable growth.”
Total Shareholders’ Equity at year-end 2023 was $2,505.2 million, a decrease of $165.4 million, or 6 percent, since year-end 2022 primarily driven by the net loss for the year, partially offset by a decrease in net unrealised losses on our fixed income portfolio.
Kemper and its direct non-insurance subsidiaries ended the year with cash and investments of $464.5 million, and $393.0 million of available borrowing capacity under the revolving credit agreement.
On October 31, 2023, the company announced that its Board of Directors declared a quarterly dividend of $0.31 per share, or $20.2 million. The dividend was paid on November 30, 2023, to its shareholders of record as of November 14, 2023.
