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Kemper posts slight rise in Q2 net income

4th August 2020 - Author: Charlie Wood

Kemper Corporation has reported a net income of $126.1 million for the second quarter of 2020, a slight increase from $122.1 million in the prior year quarter.

Kemper-Auto-LogoTotal revenues for the second quarter decreased $44.5 million to $1,230.9 million, driven by $7 million of lower Specialty P&C earned premiums and a $21.2 million decrease in other income, offset by a $46.1 million increase attributable to the change in fair value of equity and convertible securities.

Adjusted consolidated net operating income was $79.2 million, for the second quarter, compared to $91.5 million for the second quarter of 2019.

Specialty P&C earned premiums decreased due primarily to premium credits issued to policyholders during the second quarter.

Net investment income decreased $28.2 million to $67.8 million in the second quarter due primarily to a lower rate of return from alternative investments, lower yields on fixed income securities, and higher investment expenses.

The Life & Health Insurance segment reported net operating income of $16.1 million for the second quarter of 2020, compared to $13.3 million in the second quarter of 2019.

“We had a strong quarter and successfully delivered profitable growth in an uncertain economic environment,” said Joseph P. Lacher, Jr., President and CEO.

“Despite the challenges of the pandemic, our results in the quarter included gains in net income and earnings per share.

“This was highlighted by continued strong performance and industry-leading growth in our Specialty Auto business, where we generated approximately $68 million of earnings and maintained solid margins.”

“Though a reduction in consumer shopping activity and other pandemic-related activities impacted new business sales, we achieved significant policy growth for the business and enhanced franchise value,” added Lacher.

“The value of our diversified model enabled us to generate strong returns over the quarter with a rolling four-quarter return on tangible equity, excluding unrealized gains, of 19%.

“The positive investments and enhancements we’ve made across our businesses have resulted in significantly improved earnings and stable cash flows through both favorable as well as challenged economic environments.

“Additionally, the model provides meaningful capital efficiency. Together with strong execution, these advantages enable us to consistently generate attractive returns for our shareholders. Our results highlight all the benefits of this model.”

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